November 21, 2023

In the dynamic world of real estate, agents constantly face unique challenges and opportunities. One of the recurring topics that agents and their clients encounter is the decision of whether to lease or purchase solar equipment for their homes. Hosts Kyle Whissel and Bryan Koci of the Real Estate Success - The Whissel Way Podcast recently discussed this critical issue, shedding light on three essential considerations that real estate agents should keep in mind when advising clients about solar leases.

1. The Long-term Commitment of Solar Leases

One of the first points highlighted in the podcast is the long-term commitment required by a solar lease. Solar leases typically range from 15 to 30 years, which can be a significant factor for homeowners who might be considering selling their property in the near future. Terminating a solar lease prematurely can be exorbitantly expensive. Therefore, agents should caution clients who are contemplating a solar lease but may sell their home in the short term. The cost and commitment involved in a solar lease could become a hindrance if the property is put on the market.

2. Solar Leases and Potential Impact on Property Sales

The second point raised in the podcast revolves around the potential impact of a solar lease on the sale of a property. The hosts recounted an experience where a client had a 30-year solar lease agreement at $450 per month. This monthly payment was deemed unacceptable by an interested buyer, ultimately scaring them away from the property. This example underscores the importance of understanding how solar leases might affect the attractiveness of a property to potential buyers. Real estate agents should be prepared to discuss these implications with their clients and work through strategies to address any concerns buyers might have.

3. Ownership and Tax Credit Implications

Ownership of solar equipment is another crucial consideration, especially regarding tax incentives. When homeowners lease solar equipment, they are ineligible for certain tax credits that are accessible to those who purchase their solar systems outright. For example, the Federal Investment Tax Credit allows homeowners to receive up to 30% of the total purchase price of the solar equipment in tax credits during the first year. This immediate saving can be a substantial incentive for purchasing rather than leasing. Real estate agents should be aware of these financial implications and guide their clients through the pros and cons of leasing versus buying solar equipment.