As a Realtor, I'm all about adding resale value to a home.  After 29 years in the business, it's just a natural tendency of mine.  I've rejected solar on the basis that it takes too many years to break even on the investment, thus it's not worth it financially. 

I finally allowed a solar salesperson into my home, and he gave us a full presentation.  I have known this young man for many years, and I know him and his family to be honest.  He has been selling solar for 4 years now, so he is experienced at it.  What follows are notes from that presentation.  If you are considering adding solar to your home, be sure to read this article. 

How Solar Works

Your home is connected 24/7/365 to your local power grid.  While you use your electric company's power during the day, your panels collect energy simultaneously.  You sell back the power your panels collect to the utility at night.  This is called "net metering", and it's what reduces your power bill to make solar an option for people.  More about "net metering" later.

The Subject is my home

• 2-story home, approximately 2,930 interior square feet, built in 2016.
• Double-pane windows, heavily insulated, energy star appliances, 15 SEER A/C system
• Average power bill $212/month; average kilowatt hours/month 1,286

The System quoted, plus price

• 28 solar panels (I was not given the tech specs on these panels)
• Cash price: $29,792, less a 26% rebate of $7,746 = 22,046 total cash price
• Financing price: $39,368. 0-down, 125/month for 300 months (25 years).  Based on 1.99% interest with auto pay feature with financing company.  The 26% rebate you receive, which is higher at $10,236, is sent back to the financing company to keep your payment locked in at 125/month for 300 months.

The Sales Pitch

The way this was presented to me was based upon a 25-year life of the solar panels.  The salesperson showed how much money I would spend in electric costs, in consideration of a 3% annual rate hike, plus inflation.  Based on his calculations, my average electric bill without solar panels would be just a bit over $309/month.  After the next 300 months/25 years, this amount adds up to $92,752.

Over the same amount of time, my stream of payments for the solar panels adds up to $39,368.  This shows a hefty savings going solar of $53,384.  I believe that this simple formula is what makes most homeowners fall in love with solar.  But not so fast!  There are other things for savvy solar buyers to consider . . 

What's the catch?  Any hidden fees I'm not told about?

There are several other costs that are not typically disclosed, that WILL lower your savings on a solar investment. 

• When you re-roof your home. Florida roofing structures last between 15 – 20 years at the most.  This means during the life of your solar system you WILL be re-roofing your home.  Also many insurance agencies will not write new policies on homes with roofing structures over 15 years in age.  The price for removing solar panels is between $75-$150 per panel.  The price for re-installing them is the same.  For our subject home, that cost is between $4,200 - $8,400.  I will use a figure of $6,000 to be fair.
  
  
• The monthly "user fee" charged by your electric company. Every home must be connected to the power grid, and you WILL be paying their monthly connection or user fee.  This fee is quoted as somewhere between $10-$14/month.  Using the same 3% rate increase + inflation, I will estimate this user fee as $20/month over the next 300 months, for a total amount of $6,000.
  
  
• Increased cost of home insurance. Among other insurance issues noted later, there will be an increase in the "replacement cost" of your home, based upon the cost of the solar system.  For a $30,000 system this figure is conservatively $350 per year.  Over 25-years, that comes to $8,750.  Of course, this assumes the cost of insurance (overall) will not rise in Florida!  Florida homeowners are laughing right now.
  
  
• Annual Cleaning of panels. One hidden cost I found while researching solar panels is the cost of annual cleanings.  These cleanings help the panels perform as intended, over the course of their life.  I'm finding the cost is between $15-$35 per panel, or an average of $25.  In my example, $25 x 28 panels = $700.  Over 25 years, that comes to $17,500.

So after deducting $38,250, the projected 25-year savings drops to $15,134 over the next 25-years.  This can also be stated as $50.45/month, or $1.66 per day.  I am genuinely shocked by how low these savings really are!

So what if I pay cash?  That seems the thing to do!

If you pay cash for your system using my example, your total expense would be $22,046.  Your average monthly electric bill is $212/month.  If your electric bill is reduced to your user fee of $10/month, your "break even" on your output of cash is 104 months or 9.2 years.  Your additional insurance cost adds $3,150 in 9 years (assuming no insurance rates increases which is unrealistic), adding another 15 months to get to the "break even" point, bringing us to 10 ½ years.  Your annual cleanings are $700/year, which adds another $6,300 and another 29 months.  We're now up to about 13 years to get to your true "break even" point for your solar expense.

How reliable are these figures?

These figures are based on you receiving a "net zero" system, meaning you only are paying your user fee, and your power is 100% covered by your solar panels.  We know people who have invested in solar well over $20,000, and they STILL have electric costs well over their user fees. 

Are there other issues with solar? 

• Are roof warranties voided when panels are installed? Yes and no.  Where they drill through your roof (into trusses) to hold the rail systems that hold your panels, any roof warranty is voided in those areas.  The salesperson said that they provide a "25-year Performance Warranty", which warrants your roof won't leak in these areas.  Keep in mind this warranty is only applicable as long as your solar company stays in business.
  
  
• Will my panels be damaged in wind storms, hail or hurricane events? The most likely answer is no.  The panels are made with tempered glass which is designed to withstand a pretty strong impact.  They are also in rail systems on your roof, which are screwed into your truss system.  Unless your home gets a direct hit from a hurricane or tornado, it's unlikely they will be damaged.
  
  
• What about insuring my home with solar? Will it cost more?  The answer is YES.  I just had an extensive conversation with the Watson Realty Insurance affiliate, Linda Bozica, Vice President of Florida Insurance Concepts, LLC, and these are her comments: "More insurance carriers are covering homes with solar systems.  There is an increased cost on the annual policy, adding replacement costs.  Some carriers will only insure homes with solar panels if the home has a 1 million dollar liability policy, which some insurers do not offer.  Insurance carriers will deny coverage if the utility company is to be added onto the policy as an additional insured.  The homeowner also gives up privacy if this were to happen.  Some (but fewer) companies will not allow "net metering", which is when the homeowner sells energy back to the utility".  Keep in mind that "net metering" is what makes solar viable to the public.
  
  
• Technology changes over the years. Remember when computers cost over $3,000 and were snail-slow?  Now they cost under $500 and are 1000x faster.  That's technology for you!  The salesperson said that wattage pathways have increased by 35% since he's been selling (4 years).  There is also something called "bi-facial panels" which somehow collect energy off both sides of the panels.  So yes, better technology may improve panel performance over the next few years.
  
  
• Resale value/selling my home with solar panels. This is an area where solar salespersons should stay in their lane.  As a Realtor, I talk to appraisers often, and hear how they are dealing with homes that have solar.  They are typically giving homes with OWNED solar panels an upward value adjustment of $10,000.  So they DO have some resale value, but only if you OWN the systems, which most people won't.  We have had 2 buyers pass on solar homes because they did not want to take on the balance of the financed solar systems as a purchase condition for those homes.  Also keep in mind that homes with financed solar systems will not receive the $10,000 upward appraisal adjustment, because those systems are not OWNED.
  
  
• I'm an Environmentalist. Is solar a good thing for me to do?  Answer is yes.  You are adding electricity back to your local power grid, making utility companies more efficient by allowing them to distribute power more evenly during peak hours.
  
  
• REVISION (Nov 10, 2021) - The Florida Realtors and Florida Bar Association from time-to-time revise the contract we use.  In November 2021, such a revision added a new addendum to our contract that must be used when a home with a solar system is present, and where there is PACE financing in place.  It is labeled EE. PROPERTY ASSESSED CLEAN ENERGY (PACE) DISCLOSURE.  It basically says that if there is PACE financing in place, and if the buyer of that property is obtaining a mortgage, that the PACE loan must be paid off at closing.  

Conclusion:

As a real estate professional, I know that the average homeowner owns their home for an average of 7 years.  We see families selling their homes between 5 – 10 years on average, so that 7-year itch applies to homes as well!  However many families buy and stay in a home for 15, 20, 25+ years.  For those folks, a solar system may make sense, but the savings are likely to be less than they thought.

Some area builders in central Florida are either adding solar systems to their new homes, or offering them as an option.  The Federal government is offering Florida Builders up to a $2,000 tax credit to build homes with renewable energy. 

Many solar salespeople are focusing solely on new homes, and not older homes.  People that own older homes with single-pane windows, older HVAC and electrical equipment and poor insulation should focus on improving those areas first.  For them, solar should be an afterthought.  Also if you have an older roof, you need to budget that extra $4,000 - $8,000 into your re-roof bill, for removal and re-installation of your solar panels.

What if a home is offered to you for sale where they OWN the panels?  For me, that is the only way I would consider a home with solar panels.  But I would only want to pay an additional $10,000 or whatever figure the appraisers adds onto their report.  I know I will have additional costs, but the savings may be worth it.

Thanks for taking the time to read this article.  We are all about helping homeowners make informed decisions and now you know more than you did before about solar and its hidden costs.