All right, so should you buy a home with solar panels here in Temecula, California? We're gonna talk all about solar. We're gonna talk about the good, the bad, and if it's a good idea for you and your family. Let's go ahead and get into it. Hey, guys. Hey, again, my name is Justin Short. I'm a realtor and team leader with the Short Real Estate Team here at Keller Williams in Temecula, and this video is all about solar panels. Uh, we're gonna talk about solar. We're gonna talk about the pros. We're gonna talk about the cons. I'm gonna give you my experience as a real estate agent in dealing with them, kind of what the good parts are, what the bad parts are, and really give you my advice on what I tell clients, and if it's a good idea to buy a home with solar or not. Uh, but before I can get into all the information, if you are liking real estate videos like this, please do me a favor. Please hit like. Please s- subscribe to the channel.

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All right, so let's go ahead and get into all the info. Again, we're gonna talk about solar. And then I guess I'll just kinda start with, you know, solar panels in general, how common it is. So here in the city of Temecula, and really this is gonna apply to surrounding areas like Murrieta, Menifee, kinda, you know, this whole southwest, you know, Riverside County area, you know, where, where we are. Um, but in this area, solar panels have been, have become more and more common. You know, really over the last decade, each year we're seeing more and more of them. Depending where you live now, you may be used to seeing them, you may not be. If you're in other parts of the country, I know they can be very, very rare, but here in Southern California, when it's so sunny s- you know, so much of the time, solar panels, you know, they're, they're just, they're really proficient, right? We see a lot of them, and it's, there's a lot of reasons for that, there's a lot of sales tactics, but we see more and more of them, and it's gonna some- be something we're gonna see more and more of each and every year. So this is a question that, that comes up, comes up a lot. I would say of houses that we deal with on the, on the resell market side of things, um, you know, so I have clients, you know, buying and selling houses.

Probably 60 to 65% of houses that we deal with on a daily basis have some type of solar panels on them, right? So whether that's a lease, whether that's a purchase, and we'll, we'll kinda, you know, talk about the pros and cons there, and kinda, you know, what's good and, and what's bad. Uh, but it is just something that we, we see more and more. And it's actually in California, new construction homes all now must come with solar panels. It's been that way for a handful of years now. So if you are looking, you know, at anything brand new construction, you will have solar. You're really not gonna have an option. Um, really your options are gonna be just lease or purchase, you know, so how you wanna p- how you wanna pay for it. Um, and we'll, we'll, again, we'll talk a little bit more about that, what's good and what, and what's bad. But s- solar's, solar's here. It's gonna continue to be here, and we're gonna see more and more of it Um, and then as we're going through, through all the info here, I'm gonna say some things. Uh, I'm gonna talk about...

So I'm gonna give you my honest opinion, right? I'm gonna give you my opinion, uh, and these are conversations I have with clients all the time on a very, very regular basis. Uh, some are, you know, pro-solar, and some are anti-solar. You know, there, there's good, there's good and bad to everything. Um, I'll give you the disclaimer that I do, I have solar panels on my house. Uh, we've had a couple homes now that have had solar panels on them. I think solar can be a really good thing, especially if, if it's a house that y- if you're purchasing a house that you're planning to live in for a long period of time, right? And we'll talk about kind of what, what that means and, um, you know, what is, where it can be good, where, where it can be bad. But I do personally have solar panels, so I, I am a believer in solar, especially because my house, we plan to be there for a very long time. Uh, but there's, there's definitely some cons, and so we'll talk a lot about that. Um, and then the, before I get into, you know, some of the details, one thing I do wanna mention is something that's n- newer in the solar world is the idea of a solar battery. Um, this is really something, I think it's really only been in the last three or four years that solar batteries started to be relatively common.

I know they've been around for a long time, but they weren't really... I never, I'd never seen one, right? They weren't really, they didn't really exist in, in people's homes. But solar batteries have been out now for a handful of years, uh, and they are starting to become more and more common. I would say 15%, maybe 10% or so of homes that we deal with that have solar panels also have batteries. Um, the new ones in, in that new c- the new construction homes nowadays do all have, have solar, do all have solar batteries. Um, so they are gonna start to see them become more and more common. And, like, I personally, I do not have a solar battery, uh, but it is something that I'm interested in adding on, um, over, you know, over the next handful of years, I guess whenever the time it- whenever the time's right, whene- whenever we have money to do it, right? Uh, because I do think there are some real pluses to that, but 90% of people in this area that have solar panels do not have a solar battery.

So at least, at least that's my experience. So Cool. All right. So solar panels is something that comes up a lot when w- we're helping clients, helping buyers, right, to go look at homes, and we're looking at homes, and we're talking about pros and cons and good features and bad features about different properties. And a lot of times it comes up to where, hey, the, the client, the, my, my client, my, the home buyer, you know, will say something like, "You know, we really love the idea of having solar panels on our home," right? And there can be good things about having solar panels, and there can be bad things about having solar panels.

So I think kind of the biggest thing I want to point out in, in this video is that solar is not always a great thing, right? It, it can be, and we'll kind of talk about, you know, what, what that looks like. But it can also be kind of a crummy thing and kind of a detriment, and really, it can take away value, you know, to, to your, to a home, to a property i- if, if it's not done right or if it has the wrong, you know, program on it. And w- you know, I'll kind of get into s- some of the weeds on it. But it's not always a great thing. So a lot of times when we have that conversation with clients, it's, "Okay, I understand you like the idea of having solar. It seems like a really good thing, and but these are the, the pros and the cons of it." So When people put solar on their homes, we typically see that happen in three, three ways. So in this area, if, if you don't know, solar panels usually go up on the roof of your home.

If you have a big property, people do sometimes put it out on the land. But that's pretty rare here 'cause we have so many tract homes. But if you have a handful of acres, if you have 10 acres, you know, sometimes people will just put it out there on, on the land, right? Uh, but ty- typically, when they put solar panels on, it's e- one of three ways. Um, either one, you have solar panels that you own and are paid off. Two, solar panels that you own but you have a payment on them, right, you owe a balance on. And then three is some type of a solar lease or solar power purchase agreement. Sometimes you'll ... The PPA term has kinda gone away a little bit. They're kinda, they all tend to be leases nowadays. But, um, that was something that was popular, I don't know, seven, eight years ago. We saw a lot of those, uh, power purchase agreements, or PPAs. So we'll, we'll kinda talk about those three different scenarios.

So, uh, th- scenario number one is the best case scenario for solar. So if you own a home or you want to buy a home and that panel, that home has solar panels on it, and those panels are paid off, so they're ow- owned solar panels, that is a big plus. That definitely adds value. Homes that have a paid-off solar system will definitely sell for more than a home that does not have a paid-off solar system, right? And the reason is, you know, y- you, you own the home. You have pa- solar panels that are up on the roof. Those panels generate electricity. Whatever electricity those panels generate is free electricity for you as a homeowner, right? So it's a big benefit, right? If you're gonna add it onto your home, then you're gonna pay a chunk of money to do that. They're not cheap. Maybe 15,000, maybe 20, maybe 25, maybe \$30,000 for those panels, right? But then you're gonna own them, and whatever electricity they generate is free. So that's a big plus. Um, when you go to sell a property, typically having paid-off solar panels will add, depending on the size of the system, depending on battery, no battery, right?

There's a lot of factors. But typically, home with solar panels paid off are gonna sell for an additional 10 to \$20,000 more than a home that does not have those solar panels. So it r- they do, they add value, right? Um, it's, they are They are valuable, they're worth more on appraisal, and homes will sell more because they have a paid off solar system. Okay? Um, now, so that, that's the best case scenario. That is also the rarest case scenario that we see with solar, at least in this area, right? I know other areas can have different, it might be, might deal with, you know, different, um, different, uh, income levels maybe where, you know, they, people can pay cash for all these, you know, thousands and thousands of dollars. Uh, but this is probably the rarest thing that we see.

I would say probably about 20% or so of the homes that we deal with that have solar panels have paid off solar panels. So, um, that's, it is the rarest that we see. Uh, the second scenario that we see is, to me, it's actually the worst case scenario, where you have solar panels, you own the solar panels, right, but you have a payment on them. And when you, you are selling that home, you want the buyer to assume that payment, right? So this, the, the problem with this is, is a couple things, is one, is when you have solar panels up on the roof, you own them. You also have to take care of any type of maintenance or whatnot. So you're take- you're assuming all of that, right? Um, also, instead of having an electric bill, right, you might not, you might not have an electric bill any longer, but now you have a solar bill. And that solar bill is whatever financing agreement you were able to get with the solar company.

I have seen a wide array of terms that people get with their solar, with the solar company. I've seen, because people just, they're buying on payment, or these homeowners are just buying on payment. So I've seen very high interest rates. I've seen interest rates ranging from 2% up to 10% for solar panels purchases. I've seen, uh- Payments anywhere from \$150 a month up to \$450 a month, right? I've seen systems that are far too large. I've seen solar systems that are far too small. I've s- seen all types of different things. I've seen long-term 10... I've seen 10-year payment agreements. I've seen 20 years. I've seen 30-year payment agreements. And the financing terms,

In my opinion, they can be so unregulated, and there's just such a wide array of terms that people are able to negotiate. And because of the sales tactics that the solar guys use, it's a lot of door to door, it's a lot of cold calling, and they, they're just constantly, you know, just going to the next, next, next, next, next. And they're just, in my opinion, they're just trying to make as much money on those solar packages as possible.

So when people have their own solar panels, and they have all these, these, uh, big, you know, payments and big obligations, it is very difficult for them to pass on those obligations to the new, to the new homeowner. And so if a home has solar panels, and they are owned, but they're financed, and if they're not willing to pay it off as part of the sale, then if they want the buyer to assume that financing, then that will actually take away value from the home. So two homes side by side One has no solar panels, the other has solar panels, but they have a payment attached to it with that's, that's, uh, being financed, right? And if you want that buyer to assume that financing agreement, that home is gonna sell for less. That home is, it's gonna... That, that solar system is now gonna take away value.

So just because that home has solar panels doesn't necessarily mean it's a great thing, right? And especially once you get into the terms on some of these financing agreements, they can be really, really, uh, s- s- sad and, uh, egregious, and ex- and just really expensive. Uh, the, the other thing when, when you're going to buy a home that has solar panels and there is this financing agreement on it, um, then the seller, when they put the solar system on the house, they also most likely got a pretty big tax incentive to do that.

So a lot of times... You know, I think right now that the tax credit's actually expired. Uh, maybe it'll come back again, but for like the last decade, there's been a tax incentive, uh, for people to put solar panels on their home, where you can get a big tax credit for about 20 to 22%. I think at one point it got up to 25% of the, the purchase price of the solar panels. So for example, let's say you put a big solar system on your house. Let's say you buy a \$30,000 solar system. That's, that's very expensive, right? And, you know, part of the sell is, you know, y- they're the pitch when they're, when they're pitching to the homeowner like,

"Hey, you're gonna have these solar panels. You won't have electric bill. This will be your new bill, right? You'll have this financing agreement. And in addition, when at the end of the year, when you file your taxes, you're gonna get, get this tax credit." Let's say it's 20% of the, of your 30,000, right? So that's \$6,000. You're gonna get a \$6,000 tax credit that's gonna come back to you as a refund, right? So that's like a, that's a, that's the pitch, right? That's literally the, the solar pitch. So when they go to... You know, so that, that homeowner at the end of the year, they go to file their taxes. They get the \$6,000 check And w- so now they've, they've used that, right? That money's gone. They've spent it, whatever they did, right? They put it to credit cards, or they went on a vacation or, or just saved it, whatever they did. But when they go to sell that house and that buyer has to assume that agreement, you know, that, that seller's already pocketed the six grand, right? That, that six grand's gone.

They're not giving it to the buyer, right? So you as the buyer too, now you've-- the, the seller's already taken that tax credit and that tax advantage, and you're not getting any of that. So now you as the buyer, you're assuming this high payment. You probably gonna have a high interest rate, probably with crummy terms, and you don't get the tax credit that the other guy got, right? So because of all those reasons, if you buy a home with solar panels that are being financed, then your home is going to sell for less, and really those panels are gonna take away value from the home, okay? Um, and that, that's not the most common either. I would say we see that scenario about twenty percent of the time, you know, when we're dealing with solar. So about twenty percent paid off, twenty percent having some financing agreement like that.

Then the third setup that we see that is most common, so probably sixty percent of the time we see this with solar, is some type of a solar lease, some type of solar lease or power purchase agreement. There's good and bad to this. Um, really at the end of the day, the sale, it like you-- the way I explain it to people is, you know, think about if you're a homeowner and someone comes up to you and says, "Hey, do you wanna put solar on your home?" Like, why would I do that? Why would that be a good idea? Well, the pitch is, "Hey, you currently have an electric bill, right? You have an electric bill through Southern California Edison, that they're a local electric company, and they charge you X per kilowatt of electricity. That-that's how you get billed is, is per kilowatt, right? Well, what you should do, you should get rid of that. Don't pay it. Don't pay the electric company more, and instead we'll do a solar lease. We'll pick solar panels. We'll put 'em up on your roof. Uh, then we'll-- you don't own the panels, right? Solar company will own the panels. They put the panels up on the roof.

Whatever electricity those panels generate, you're gonna buy back, and we're gonna sell it to you at a less dollars per kilowatt, right, at a lesser charge than you would pa- buy from, from Edison, right? So Edison's gonna charge you X, we're gonna charge you Y, and we're gonna save you money, right?" So, and the, as a homeowner, the reason you would do that is you, okay, hey, if I can save money each month, that seems like a good deal to me, right? That, that's like the sell, right? That is, that's why people do solar leases, because they're pitched that they're gonna pay less per month for the electric bill. Instead of paying electric bill, they're gonna pay a solar bill, and they're gonna save money.

They might save twenty dollars a month. They might save forty dollars a month. They might save eighty. They might save a hundred dollars a month, whatever it is, right? But there's some s- that, that's the sell, is they're gonna save money, right? There's pros and cons to that. So if when you go to buy a home, if that home has a solar lease on it, right, and if you can save money, it can also be a good deal for you, right? If you can save, let's call it \$60 a month because you have solar, you know, that can be a, be a really, really good thing. Uh, but it doesn't always necessarily ma- match up like that.

So what I see when I, uh, when I'm dealing with clients is, let's say I own a home, and let's say I have a handful of kids. I work from home. My kids do online schooling. My kids play video games. My kids have iPads and computers, and we're a very high electric s- electricity usage household, right? My w- my wife works from home, all, all these things. So we're, we're very high usage, okay? And then say I do a lease so I can save \$60 a month, um, on my electric bill. Great. Okay. Makes sense. When I go to sell my home Let's say the prospective buyer comes in, and let's say the prospective buyer is a retiree. Let's say they're a retiree that they're, they are gonna be living one person all by themselves. They don't work anymore, and they're not really big on technology and maybe go and, you know, watch a little bit TV at night. Okay? So they are a very low e- electricity us- user. The problem is if I have my solar lease, you know, let's say my solar lease is a pretty big payment.

Let's say it's \$250 a month, right? But I'm saving. But w- the, the home buyer's gonna come in, the retiree, their electric bill might only be \$100 a month on average, right? But to buy my home, they have to assume the solar lease, right? So they're gonna be obligated to take on my big payment, uh, regardless of how much electricity they use. Okay? So that, that's a pretty, that'd be a pretty extreme example. That is something that I see a decent amount of time, right? So when you have a solar lease on, on your home, again, it might save you money, which can be a really good thing, but th- when you go to sell your home, the home buyer, you ha- you have to kinda match up, right? We have to be kinda similar users, or at least the buyer has to be a higher electricity user 'cause they wanna be able to save money and take advantage of that lease. That's, you know, not have it be a hindrance. Um, if the terms on the lease can- are good and fair and, you know, it's not some super high payment and we can match up, uh, solar leases can be a pretty decent thing for a buyer. Um, what I do wanna point out is solar leases do typically not add value to your home.

So two homes side by side, one has a solar lease, one has no solar, the ho- homes should sell for just about s- just about the same price, right? There's no add in value for having a solar lease. So just because a home has solar doesn't mean it's worth more, right? If you have paid-off panels, then yes, there definitely, there is value there. But if there is a lease, you're not, you're not gonna have that. Uh, the other thing to mention with solar leases is, are the tax advantages with solar leases, and the truth is there's, there's really, there's none. Um, so the only time you get those tax advantages are when you purchase the panels, but when you're doing a lease, you don't own the panels, so you, you don't get any of those tax advantages that you do if you purchase the home. So, um, anyways, those are the three ways that we most commonly see solar panels in this area: paid-off solar panels that you own- panels that you own but you've, you're financing and you owe payment on, and the third way is the lease or PPA. Um, so there, there's pros and cons to, to all of them. There- there's pros to most of them, but if you have, if you have a loan on it, I think that's, it, it usually is gonna be a con, at least in the real estate transaction. Um, I'm sure people have reasons that they do it, and there's, we can get into the weeds on that. But when, when I'm dealing with as a real estate agent, usually it just, it's all around just a, just a negative.

All right, so just to kind of, kind of wrap, wrap everything up and give you kind of my opinion and really what, what I recommend to, to my clients and kind of the conversations that we have. So, you know, one, you know, solar can be a really good thing if, especially if you plan to live in the home for a long period of time. And if that is the case, my recommendation would be to have solar panels that you purchase and you own outright, and you're not gonna be assuming a purchase agreement that the seller already has, right? Um, for example,

I told you I have solar on my home. That, that is, that is what we have. We did go out and we bought our, we bought our panels. The reason that we decided to do that is 'cause we plan to be there for the next 20 plus years. I'm sure over time, you know, we, we bought a pretty large system, and I'm sure over time we're gonna, we as a household will use more and more electricity. I'm sure at some point we'll have electric cars and prob- we'll probably all have electric cars eventually, right? I'm sure there'll be just more computers and more lights and more TVs and all these things that'll happen over time. Um, so i- in, like with the cost, so let's say You know, let, let's say the average solar system, let's call it, let's say it's \$20,000. Well, now it might even be a little bit higher than that, but let's say it's \$20,000. Well, if you're gonna buy something for \$20,000 to save on your electric bill, right? Let's say your average electric bill is \$200 a month, it's gonna take a lot of months. It's gonna take a lot, a lot of months for that, for the, for those numbers to equal out. You know, 20 grand versus \$200 a month, right? Like, it's gonna take a long, long, long, long time. So, um, you typically, you know, from all the projections and stuff that I've seen, it takes anywhere from eight plus years for someone to break even when they add solar panels to their house.

So if you're gonna do it just to, you know, just to, just to have solar or just to be green or just decide that's, you know, what you wanna do just for an investment reasons or to add value to your home, I don't think that's the best thing to do. But if you are gonna be there for a long time, I think it can be a good thing. And if you do decide to sell, it will definitely add value if you have paid-off solar systems. Uh, the second thing that I tell, tell, tell my clients is that leases can be okay. They can be a good thing. They can be decent, uh, but it just depends. Those solar leases are definitely not gonna add value, right? They're not... Homes are not... They're not always a great thing. We have to look at some of the terms, kinda s- make sure that we match up with what those, uh, you know, with what the, the system is that's already on there. And I've seen a lot of solar lease systems that have payment escalators as well. So they might have low payments up front, and then each year those payments go up at the most c- I see 3% per year. Some of them are locked in for a long time, but some of them raise up 3, 3% per year.

So, and they're 20-year leases, right? So after p- year one it goes up 3%, after use... year two it goes up 3%. The first three or four years aren't such a big deal. But you start looking at those numbers, and year 15, 16, 17, it looks like a rip-off, right? That payment has about tripled after all that, all that has compounded, so, uh, that can be a big deal. So leases can be okay, but you gotta look at the details and make sure you match up with the, the system that's... You as a household will match up with the system that's already on there. And three, really the biggest thing that I wanna get across, is solar does not always mean good, right? Solar panels are not always a great thing.

Solar panels don't mean it's a, it's a good house. That doesn't necessarily mean they're gonna have low bills, and it doesn't necessarily mean it's gonna be more affordable. They can be, if the system is set up c- correctly, if it was paid for correctly. Um, but you gotta be careful. You gotta make sure you know what you're getting into, and you gotta make sure it's gonna be a good scenario for you and your family. So anyways, hope that's good information. You guys have questions, feel free to reach out. You can call, you can text, you can email. Hopefully talk to you soon. Thanks