Buying or Selling a House with Solar Panels

Buying or Selling a House with Solar Panels?

Buying or Selling a House with Solar Panels?

Perhaps you are in the market to buy or sell a home and ready to assume the benefits of a previously installed PV solar system, here are some tips on how to decide whether the existing system is an asset or a liability.

Should I buy a house with an existing solar system?

  • Is the system owned outright and not subject to a lease or PPA?
  • Was the system installed by a reputable installer who is still in business?
  • Did they use quality solar panels and inverter from companies that are still in business?
  • Is there a copy of the original contract and is the warranty transferrable?

If you can answer yes to all four of the above questions, then the answer is simple; yes, buy the house.

If not, then read on; find out which red flagsto look for and what to expect from the system?

How was the system originally purchased?

  • A system that is owned outright is not subject to any loans or leases and must be assumed at close of escrow – this is the best way to go and poses no “red flags.”
  • A system that was purchased with a PACE loan (Property-Assessed Clean Energy Loan) and must be assumed by the buyer – RED FLAG
  • Use this as leverage in the transaction. Consider if it’s worth a bit more money if the system is unencumbered.
  • See what it will take to have the seller buy thee system outright before the close of escrow.
  • Try to get rid of the PACE loan and do not close escrow unless you fully understand he liabilities you are undertaking. This isn’t necessarily a deal breaker, however, it’s not the best means to finance a PV system.
  • The system was leasedRED FLAG
  • Use this as leverage in the transaction. It’s not necessarily a deal killer, but lease agreements are certainly not in favor of the seller.
  • Is the leasing company still in business? If not, this could be a deal killer.
  • What is the remainder of the contract? Is the buyout fee reasonable (Doubtful)? What level of monitoring is provided and is it still functioning? A common mean the leasing companies use as a crutch to void their production guarantees is the monitoring device has lost connection and the homeowner ignores it.
  • Who do the lease payments go to and do they have a local presence?
  • Are you sending payments to Wall Street or to a regional company who is still answering the phone?
  • Is there a lease escalator and are you aware of the sales tax billed on every payment?
  • If you need service what is the procedure?
  • If you are in the market to put solar panels on your home this is probably not the choice you would make.
  • But it’s already there so… if you would like the house, then determine if the lease is acceptable to assume.
  • Some leases are acceptable in that the cost of power consumption under the lease is still less than what you would pay your local utility company. If this is the case then don’t let it stop you from buying the house of your dreams.
  • The system is a PPA (Power Purchase Agreement)RED FLAG
  • Again… Leverage.
  • Consider the remaining term?
  • Will you use the power delivered?
  • With a PPA you’re paying for it regardless. Be sure that the system is sized right for you.
  • Again, who do the PPA payments go to and do they have a local presence?
    • Are you sending payments to Wall Street or a regional company who is still answering the phones?
    • What is the current rate?
  • Is that tax rate favorable with today’s rate plans?
  • You will most likely be on a “Time- of-Use” (TOU) plan and offsetting the least expensive power sold by the utility.
  • Check closely. Rates can vary and usually contingent upon your utility plan.
    • Escalators? Is there a lease escalator clause that can potentially change the agreement price?
    • Are you aware of any sales tax billed on every payment?
  • What level of monitoring is provided and is it still functioning?
    • At least with a PPA it’s in the companies benefit to maintain the monitoring.
    • But can they bill expected production if you connection drops?
  • If your system needs to be serviced, what is the procedure?
  • If you are in the market to put solar on your home, PPA is not the choice you should make.
    • But it’s already there so… if you like the house, then determine if the cost per kw is acceptable.
    • If the cost of the power under the PPA is still less than what you would pay your local utility, then don’t let it stop you from buying the house of your dreams.
  • Who installed the system? At Palomar Solar & Roofing, we proudly put our name and contact information on the system plaque.
  • Can the home seller tell you who did their installation?
  • Is the installer still in business? What is their reputation?

So many red flags – do I really want solar?

Let’s take a quick moment to remind you of the benefits of solar. First and foremost: It makes sense financially. Investing in a PV Solar System is one of the best investments you can make as a homeowner and if done right, through a reputable company such as Palomar Solar & Roofing, peace of mind and an overflow of benefits will shortly follow. Many believe the primary reason to go solar is for the environment. Here at Palomar, we prefer to look at the financial benefits of solar and if it’s good for the environment, that’s a bonus! 

Do homes with solar systems sell faster?

Simple answer is… “Usually.” Of course if your house has a PACE loan or a lease, you may experience the opposite. What if the panels are facing the street and located in a haphazard manner as to be an eyesore. This is why it is so necessary when choosing your solar company to ensure that you are hiring a company who will be honest about all variables. At Palomar Solar & Roofing, we know that our systems are installed right and take aesthetics as well as proper sizing into consideration. If a system is installed properly, by a reputable contractor with quality components, then yes; your PV system will add value to your home. It will also allow the homebuyer to close escrow with peace of mind rather than pulling out of escrow at the discovery of any “red flags,” due to the previous home owner cutting corners.

What is the value of my solar system?

Did we mention benefits? One of the many benefits following the installation of solar is that it has great potential to increase the value of your home. But keep in mind that value is truly contingent upon the current market and method in which you’ve purchased your PV solar system and it absolutely matters which company has installed your system. The cream of the crop has risen in the solar industry and in our opinion, there are only a few companies who can really offer peace of mind. If you’re buying a home that these companies have installed on, you can feel comfortable knowing that warranties are going to be upheld and at a minimum the job was done right. Do your research on a solar system that was previously installed on a home you have taken interest in. Once you have identified which company has installed the system, research the company and ensure reputability.

At Palomar Solar & Roofing, we provide each system with a full set of documentation; from the contract to the installation plans and warranties. We are proud of our work and our reputation shows it. When looking for your solar installer, know that these intangibles are what make a difference between a system that is an asset to you and your home, versus one that could make selling your hoe an experience you’d rather forget.

Tax Credit for Solar Installation

Does The Residential Solar Power Tax Credit Still Exist?

Over the last few years, the uncertainty of how the government and utilities were going to handle tax credit for new solar systems has caused confusion to the residential marketplace. Are tax credits gone? Are we running out of time? Did I already miss the boat? Luckily, there’s now a defined answers to these questions.

In February of this year, the Bipartisan Budget Act of 2018 reinstated the tax credits available for residential solar customers. The Act outlined a structured, but gradual decrease in the credits over the next three years for systems placed in service on or after January 1, 2006, and on or before December 31, 2021. The breakdown according to Energy.gov1:

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022

In additional to the natural reduction of your electric bills over the next 25 years, adding renewable solar energy will increase the value of your home without directly increasing the property tax assessment from the installation.

Please consult with your accountant regarding your eligibility, and how you can benefit from this tremendous tax credit

Palomar Solar surprises Military families; gives away three solar systems

For the second year in a row Palomar Solar gives away three solar systems to deserving Military families at the
Miramar airshow.

Over the summer military families entered the Palomar Solar Gives back sweepstakes where we promised to give
away a system of up to 24 panels. Three finalists were randomly selected and invited to attend the airshow in our
runway fronting chalet where one of them was going to win a free solar system. One of Last years’ winners was
tasked with pulling the winning entry. When he pulled the winning dog tag out of the bag, all were shocked and
many tears were shed to see all three tags come out of the bag, since we had tied all the dog tags together. Every
system was designed to offset more than 110% of their previous 12 month electricity needs. Combined we
estimate they will save over $350,000 in electricity costs over the next 25 years.

Congratulations to:

Adam Webber – Navy Seal Veteran – system size 4.16kw
John Vojtas ‐ Retired Navy – system size – 5.76kw
Carl Boeck ‐ Air Force Veteran – 2.88kw

Palomar Solar was established in 2009 and is one of Southern California’s premier solar PV installation companies.

Palomar Solar has installed over 50,000 solar panels on homes and business all while maintaining one of the best
reputations in the industry. Notable clients include Waxie Sanitary Supplies and Goodwill San Diego.

If you would like more information please contact Adam Rizzo at (760 715‐2820 or adam.r@palomarsolar.com

Why we are cautioning anyone currently looking to buy SunPower panels. Solar Edge is a hybrid product, when this fails it’s catastrophic.

SunPower and Solar Edge buyer beware

What does Enphase’s recent acquisition of SunPower’s microinverter, Solar Bridge mean for consumers?

For Palomar Solar, it’s great news! It simply validates what we have been saying for the last nine years. There is no question that Enphase is the number one microinverter in the market. Palomar Solar has always believed in Enphase and has been selling it exclusively in the residential market. When Solar Edge came to the market we were not tempted by lower prices like most vendors. It would have been easier for us to just give in and kick Enphase while they were down like everyone else. Instead we stayed the course believing it to be the superior product with a long term vision. After a couple of rough years Enphase has turned another corner and is on the right track to once again regain the number one position. And because of our loyalty through the tough times our relationship with Enphase is stronger than ever which means our customers can expect the absolute best service.

So let’s talk about why we are cautioning anyone currently looking to buy SunPower panels. First of all while we do not sell SunPower it is one of the top panels in the market place along with LG. I’m not saying at all that SunPower is an inferior panel. My caution has to specifically do with their AC module called Equinox (the one that comes with the Solar Bridge microinverter on the back). When this product first came to the market. I thought it would take off. However, they decided to take one of the best microinverter features away which is per panel monitoring. Once I saw this I knew that Enphase would still be a superior option for our customers. Anyone reading this needs to be aware that the market is being flooded with cheap SunPower Equinox offers. SunPower’s new AC module is going to come with Enphase and Solar Bridge will go away which means your warranties and support will to. I’m curious to see if SunPower dealers will offer per panel monitoring or not as this is not a standard offering.

Now let’s talk about Solar Edge. They stormed into the market with very aggressive sales tactics which was a huge red flag for us. While they’ve had some success by under cutting Enphase pricing the truth is finally coming out. Solar Edge is a hybrid product. It’s still a central inverter (big ugly box on the side of your home) that only comes with a 12 year warranty. When this fails it’s catastrophic. Your whole system is down until it’s replaced. We estimate that time to be one to three months. What do you think your electric bills will be in 12 years? Times that by a minimum of three not to mention the headache and now Solar Edge is much more expensive than Enphase which comes with a 25 year parts and labor warranty. And since there is an inverter for each panel it is not catastrophic if one fails. And with a mean time to failure of 300 years this is a rare occasion for Enphase. The other half of Solar Edge is the DC power optimizers which do come with a 25 yr. warranty. Having the optimizers does allow for the ability to monitor each panel. However, 99% of installers do not turn this feature on for their customers as they simply do not want to be held accountable at the panel level. In fact if you are reading this and have a Solar Edge system I would contact your installer and demand they turn it on. I guarantee you that you have at least one dead optimizer and have no clue. Warranty issues are finally catching up with Solar Edge which again is only making the case for Enphase as the superior product that much stronger.

LG Visits Palomar

LG Visits Palomar Solar

We appreciate LG making the time to visit during their recent short trip from South Korea.

While most solar companies tend to sell the “flavor” of the week or year; Palomar Solar has only sold products they believe in and have been for years. As a result we have established solid relationships with some of the top manufacturers in the world. LG and Enphase.

Home and business owners often overlook the importance of doing business with companies who have established these long standing relationships. If we need something they answer the phone and help us which in turns allows us to provide the great service we are known for.

Why Is It Important To Choose A Local Solar Contractor For Your Solar Project?

“A Cautionary Tale”

Just recently we installed a 16 panel solar solution for Cathy M., here in San Diego, who told us a sad story, that unfortunately, happens more frequently than it should.

We installed Cathy M.’s, solar system 4 weeks after she signed her contract, and she received her “Permission To Operate” or (PTO), the same day as her inspection. So Cathy was producing power the same day as her final inspection. Cathy called us that day, surprised she had her authorization from SDG&E to start producing her own power so quickly, since her friend Linda, who had purchased her solar system from Vivant, was still waiting, 4 months later to be able to turn her system ON.

We hear this problem often and we were concerned enough to call Linda to see if we could help. Linda had signed a lease with Vivant for her solar system, the system had been installed for 4 months now and she was very concerned that after multiple phone calls to Vivant she still did not have authorization to start producing her own power. With our assistance, it turns out that Linda’s notification was sent by Vivant, 1 month after her install, but to an in-correct email address.

Linda will now owe SDG&E another 3 months of GRID usage when she receives her annual “True Up” bill from SDG&E for the months her system should have been up and running.

So what can we learn from Linda’s sad situation and how do YOU avoid problems like this?

  • Use “Local” Solar Contractors that have offices that you can drive to and speak with an actual representative, in person, if you have a problem. Not a PO Box, or an 800 number in another State. Here at Palomar Solar we own our building here in Escondido, we maintain normal business hours and have a customer service department, so problems like this don’t occur.
  • Never “lease” your system. In most cases the leasing company keeps YOUR 30% tax credit and your contract is 20 year’s long. Once they have you locked into your contract and the equipment is installed, the customer service evaporates and they simply move on to the next sale. Vivant should have been monitoring Linda’s system and noticed her system was not producing power long before she made the 1st phone call. Why it took multiple phone calls and threats of cancelling the contract to determine that her PTO had not been issued is still a mystery to us. Vivant’s Energy Consultant, that sold Mary the system, should have visited with her after her install and acted on her behalf months ago.
  • Reliable, solar contractors should have your PTO within a week or two depending on the utility company after your final inspection. Here at Palomar Solar, a large majority of our client ‘s have their PTO’s the day of their inspection or within a week at the latest.
  • Trust worthy solar contractor’s will not only offer Per-Panel-System-Monitoring to their client’s, but have a system in place that alerts the solar contractor and the homeowner if a service problem occurs. Here at Palomar Solar we don’t wait to be contacted by the homeowner if a service issue occurs.
  • Reputable solar contractors will visit with you after your system is up and running to review your project, equipment, up-load your monitoring, explain what to expect on your monthly Net Metering Statements and your Annual True-Up Bills.

Do your homework on your solar contractor before you sign any paperwork, choose local companies that value their reputations and insist on a Final Project Review Mtg before you issue your final payment.

George Chamberlin

George Chamberlin and Palomar Solar

Many of you know George Chamberlin as the “Money Guy” in San Diego. George is a renowned financial expert who provides a wealth of financial and business news updates to the Southern California Region through television, radio and even print. He is a true legend with over 30 years of service and counting.

We would also like to introduce to you his awesome, loving wife Terry! In our opinion she is the best kept secret as a phenomenal baker! We will do whatever we can to stay on the Christmas list ha ha.

It has been a true blessing to have our paths cross and to get to know George and Terry. We are humbled to not only call them friends but customers.

Thanks again for your friendship and trust in the Palomar Solar team!

Listen to George’s testimonials


Part 1


Part 2

Solar Panel Batteries

Do you really need a battery along with your solar panels?

In Palomar Solar’s opinion, not yet.

Solar panel batteries seem to be the talk of the solar industry right now. I’m hearing radio ads and seeing infomercials that are incredibly misleading to the consumer.

What many homeowners do not understand is there are only two purposes for purchasing solar panel batteries for your solar system. One is to have power in the event of an outage, and the other is for peak-load shifting (trying to offset the new time-of-use rates).

What do you think your battery is going to power?

Most companies selling solar panel batteries are giving the false impression your whole home is covered in the event of a power outage. This scenario is possible, but only if you scale back your usage accordingly. An average residence uses 30–40kW per day and power consumption is minimal when you are out of the house, and overnight while you are sleeping. So how much power is being used at the busiest times of the day in an average household? Realistically, maybe 10kW per hour.

How long will the solar panel batteries charge last?

It all depends on the size of the battery and what you are trying to power. If you are considering a backup system, your consultant should be asking you “In the event of a power outage what do you want to be able to use?” We typically hear “Everything!” After a little discussion, we end up at “a couple of lights, the TV, computer, and the refrigerator.” Powering your entire home for a significant period of the day could take a room full of solar panel batteries, and that cost would be substantial.

The only way to power your “must-haves” is to isolate those circuits and relocate all essential loads to a new sub panel. This will allow your 10 kWh battery (brands such as LG and Tesla 2 are a nominal 10kWh) to provide back up for an extended period. Of course, if you are committed to go outside and turn off all the breakers to non-essential loads when the power goes out, you could avoid this additional $1,000 expense. The issue I’m seeing is that many companies are not installing the essential loads panel resulting in frustration when their customers are joining their neighbors in the dark after a couple of hours.

Can a battery cope with peak-load shifting?

With the new time-of-use (TOU) rates coming from the power companies, everything you have been conditioned to do needs to be reversed. Off-peak rates (the lowest) are now 9 pm until 4 pm. That’s right! Midday is now when the utility companies want you to use power. Peak rates are between 4 pm and 9 pm, so when you come home from work and do laundry, the dishes, watch TV, etc. you’ll be incurring more cost rather than less.

To combat the TOU rates, we use solar panel batteries to implement peak-load shifting. The battery will charge during the day when the power is less expensive and then in the evening (during peak hours) power will be drawn from the battery. You’ll be using solar power past sunset even though your solar system is no longer producing.

This benefit sounds great, but at today’s battery costs, it makes zero financial sense. In fact, we believe the best-case scenario is that you may recoup your battery investment around year 11 or 12.  Unfortunately, your warranty expires in year 10!

Does a battery purchase make sense?

At Palomar Solar, we believe batteries are only for the early adopters who want the latest and greatest, not those looking at it from an investment standpoint. We think for the majority of solar consumers, waiting another 1-3 years will be worth it.

Solar panel batteries are an exciting idea, but not ready for “prime time.” In a few years, prices will drop significantly, and the technology will become more advanced. When we see a 5-7 year payback, that’s the time to buy.

It’s essential to have an in-depth conversation with your consultant about battery expectations. We are more than happy to install them as long as the expectation is fully understood. Some companies are merely using batteries as another revenue stream, and the sales pitch misleads their customers. Unfortunately, they won’t find that out until the next outage when their battery is drained in less than an hour.

If you are concerned about back up in the event of another outage such as the recent wildfires, we believe a generator makes the most financial sense and provides the reliable backup you are expecting.