As soon as you close on your new home, you’ll start getting knocks on the front door…it’s your neighborhood solar panel sales team. Sometimes they’re “energy consultants,” sometimes they’ll tell you they work with the local electric company (and technically they do). They’ll congratulate you on your home, and let you know that your next best investment will be to add $30-45k worth of solar panels to your roof, and in that same spiel, you’ll hear that it’ll improve the value of your home, and if you sell before you pay it off (the average person lives in their home for less than 10 years, and many are now applying 15-20 year notes to these solar panel installment payments), you can transfer the lease at closing. 

If we were having this conversation in person, this would be where I’d insert a big dramatic sigh, but we’re not, so let’s move on and get to the details you came here for!

We’re not solar panel specialists. We have just seen the patterns of outcomes that we’ve seen from folks who have chosen to add solar panels to their homes, and our opinions come from hundreds of conversations and market analyses’ on properties that have added solar. Adding solar panels to your home seems like a great investment, especially with promises of clean energy, reduced electricity bills, and potential tax incentives. However, like any major home improvement project, it comes with its own set of advantages and hidden drawbacks. Here's a candid look at the good, the bad, and the ugly sides of adding solar panels to your home.

The Good

1. Energy Savings Over Time Solar panels can significantly reduce your electricity bills by producing energy for your home. Over the lifespan of your solar system, you could save thousands of dollars on energy costs, especially if your home is located in a sunny region such as San Antonio, Texas.

2. Increased Home Value (Sometimes) Homes equipped with solar systems are often marketed as energy-efficient, potentially attracting eco-conscious buyers. In some markets, this could mean an increase in home value, especially if the solar system is paid off. Buyers may appreciate the idea of stepping into a house with low energy bills.

3. Environmental Impact Solar power is considered clean energy because it is a renewable energy. For many homeowners, this is a key motivation for making the leap. 

The Bad

4. Upfront Costs and Financing Dilemmas The initial investment for a solar system can be steep, often costing upwards of $30,000 to $45,000. While financing options such as loans or leasing are available, monthly payments may end up costing more than your previous electricity bill. A recent client of ours faced this exact situation—a $30k solar system on a brand-new home resulted in higher monthly costs than their prior electricity bills with a 15-year repayment plan.

5. Roof Warranty Woes One often-overlooked downside is that adding solar panels can void your roof's warranty, especially if installed improperly or by a non-certified contractor. The penetrations made to install the system may compromise the roof's integrity, and in some cases, this could lead to costly repairs or leaks. In the instance of a new home, this can feel like a particularly devastating oversight as most new construction homes come with a 10 year roof warranty that is almost instantly voided once solar is installed. This may also impact the structural warranty for the property, too, as solar panels contribute significant weight to the structure of a house at roughly 40 lbs per typical residential solar panel. In regions like San Antonio where roofs are significantly impacted by hail on a regular basis, it’s important to review your insurance and warranties before making these large investments. 

6. Long Payback Period While solar panels save money in the long term, the payback period can be lengthy—most of the repayment loans we’ve seen are 10 years, and recently, we’ve seen more in the 15-20 year range. By the time the system is paid off, the technology may be outdated, reducing the overall savings. In the case of some folks, the technology might be obsolete long before they see significant savings, creating a frustrating financial situation.

7. Battery Sources For folks acquiring solar for the purpose of environmental protection, it’s important to consider the source of the materials for the batteries, such as Lithium and Cobalt. Much of the mining required to produce these batteries has significant negative environmental impact in regions of the world with little regard for environmental protections or labor conditions, and the batteries do contribute to the creation of e-waste. 

The Ugly

8. Difficulty Selling Your Home If you plan to sell your home while still paying off the solar system, it may actually be a deterrent to buyers. They might not want to assume your loan payments, or they could be wary of taking on a system that doesn't align with their energy needs. We have repeatedly encountered title issues with solar panels where the lease could not transfer to a new buyer at closing for a number of reasons to include: 1) the clause in the solar panel company’s contract that said the ability to transfer the lease can be changed at any time, and in each of those situations, the company demanded a due on sale full payment, 2) the buyer couldn’t qualify for both a solar panel loan and a home loan at the same time, and 3) title wouldn’t provide a General Warranty Deed to convey the title on a mortgaged property with a solar panel vendor lien still in place. 

If the home is in an area where many homes do not have solar panels, appraisers will not apply much value to the solar panels (we’ve never ever seen them apply anywhere near the full retail value!), and so homes that already have little equity in them because they were bought with low to no down payment loans are creating a risky financial situation for themselves by leveraging further unnecessary debt on their property. If they need to sell, they’ll find out they’re likely underwater on their home because of the solar panels, and if they need to move, especially if they’re an Active Duty military family, they may find themselves unable to sell as a result, and now they’re renting out their home and still paying for the solar panel lien, providing a nice gift of cheap electricity for their tenants. 

This is the big one for us because we see this over and over again with folks trying to buy and sell homes, and many times we have to have the tough conversation with a homeowner to let them know that as a result of acquiring solar panels on top of a home with little equity in it that they could otherwise have reasonably sold after a couple of years, they are now underwater on their home. In fact, the 3rd such appointment in the last month motivated the creation of this blog to hopefully help others. In each case, the individuals had acquired small, new construction homes with zero down loans. After a couple of years, their family situations had changed (job relocation, divorce, more kids and needed more space), and they inquired about selling. We reviewed numbers, and they looked good - potentially a little tight or might take a little longer than usual to find the right buyer (e.g. 4 months on market instead of 2), but workable for a sale. And then…we found out about the additional $30-40k of solar panels that would need to be paid at closing. In each of those situations, because the neighborhood was new, very few neighbors had solar panels on homes that had resold, and 90% or more of the neighborhood was purchased with VA or FHA or USDA loans, we would likely encounter appraisal issues where we’d expect no more than $10-15k in value returned (and likely only after submitting a Reconsideration of Value/ protesting an appraisal) for the property, rendering the home technically “underwater.” Those particular homeowners are now in a game plan to review property value annually until they are in a position where they can sell, or they’ve chosen to rent their property out, and unfortunately at a loss after paying the solar panel bill monthly.

9. Performance and Maintenance Issues Solar panels aren't set-it-and-forget-it systems. They require regular maintenance, monitoring, and occasional repairs, which can add to the long-term costs. Poor panel performance due to shading, debris, or weather conditions could reduce the overall output, cutting into your savings. Additionally, certain warranties may not cover labor or related costs for repairs.

10. The Technology is Evolving Quickly Solar technology is advancing at a rapid pace, and panels installed today might be outclassed by more efficient, less costly models in a few years. This rapid evolution can make it difficult to keep up, and buyers may be hesitant to purchase a home with older, less efficient panels.

Is Solar Right for You?

Before diving into the world of solar energy, it's essential to weigh the pros and cons. Solar panels can be a good long-term investment, but they come with risks—both financial and practical. Be sure to fully understand the potential pitfalls, such as voided roof warranties, difficulty selling, and the possibility of paying more for solar than traditional energy costs. And always consult with your real estate agent and financial advisors before committing to a solar system, especially if you plan to sell your home within a few years.

The decision to go solar should never be taken lightly. Make sure you’re fully informed, so you can avoid the common—and sometimes costly—mistakes that others have made.