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Well, who wouldn't wanna learn about solar? It's summer and solar is everywhere. This YouTube video is going to be talking about what I know about solar as a real estate agent and how it impacts the business of real estate, both on the selling side and on the buying side. I will talk about information that I've learned.

Over the years, I will tell some horror stories just because it's important to know that not all solar transactions go smoothly when people are buying and selling their homes. Hi, I'm Judith Barnett with Judith Barnett Sells Homes and My Home Group Realty, where real estate is done with compassion and integrity.

As I said, today I'm gonna be talking about my perspective on solar. I'm not a solar specialist. I'm not a solar installer. I'm gonna be sharing what I've learned and I'm going to be sharing things, tips, and tricks, and so that when you are in the middle of a transaction or even as buyer or seller, you're thinking about solar.

That you have some really concrete information. The reason that this is important to me is because my experience is that I've run into so many sellers and so many buyers that don't know anything about solar that believe that solar's a great idea. However, they really don't understand solar. They don't understand how much they need.

They don't understand how will they know if they are buying enough solar panels. And so I'm gonna break that down really simply because I learned that at the last workshop I went to, and I was like, well, duh, that would've been good to know ages ago. Because now when I'm talking to my sellers and when I'm talking to my buyers, I can very concretely tell them what to look for.

To see if the current house and the solar system on that house is going to be a good fit potentially for the new owner. So we'll come back to that. But before we get into all of that, I just wanna talk a little bit about. The terminology of solar, one of the things that I always found frustrating and I have a little cheat sheet now, I'm gonna refer to my sheets here that I just didn't really know all the parts of solar.

I didn't really understand how it worked, and I want it broken down into really simple terms because I like things very concrete, very black and white. This is how it works and what I should expect. So I'm just gonna start with the solar basics, which are the parts, and I didn't understand how few parts there really are to a solar system.

And I'm talking strictly when you're talking about being connected to the grid, meaning a local electric company, not off-grid. Off-grid solar is a whole another ball game, and we're not gonna be talking about that today. Just FYI. So I'm just gonna say really quickly, and I'm gonna have these in the video so you can look at them and also as a link, so you can print them out if you want to.

So you can have the same information that I have. But the first thing, and I already referred to it,   📍 is the grid. And the grid  is the actual electric company. We are all, if we don't have solar, we're all connected to the grid. That's how we get our electricity. That's how we run everything. And when you have solar panels and you're not off grid, what that means is your solar panel producing solar, the sun is shining on 'em, it's collecting it, and it's collecting it, and it's being sent to the electric company.

And the electric company gives you credit for how much electricity, solar power your solar panels are producing. And then that is converted back into electricity, which comes back into your home. And we're gonna talk about the credits and stuff later, but that's what the grid is. The grid is your local electric company.

And unless you're connected to the grid, unless you're an off-grid house, your solar panels are just sitting on your roof and doing nothing. Nothing. You have to be connected to the grid for your solar panels to actually produce electricity that will run your home. Okay. There's an issue and a story. I'm gonna tell about that.

Okay. I'm gonna tell a story right now because I just, it just fits here so perfectly. So I had a gentleman, an older gentleman who bought solar panels and. The company that sold him the panels and were, was installing them. So you've got the installers, you got the seller of the solar panels, you got the installer of the solar panels, and then you've got whoever the loan is with.

In this case, he had a loan on solar panels and then they had to be connected to the grid. So the company that was doing the sold him the solar panels and doing the install was called, and I'm not. this company's in so much trouble in Arizona. I don't think I'm gonna get in trouble for using their name.

So their vision solar, he bought, my client bought $50,000 worth of solar panels for his home, which I think is more than he needed. And there's a whole thing about that. So he bought the solar panels, he paid down a bunch of money and they were doing the work. And along the way. Vision Solar was being sued in the state of Arizona because they weren't completing their installs.

They weren't getting the installs done, and the homes connected to the grid because of the lawsuits. Vision solar was disallowed from working in the state of Arizona. And I think they also went outta business because they ran outta money to do the work. They couldn't pay their employees. So what happened is my client has $50,000 worth of solar panels sitting on his house, but it's not connected to the grid.

So he is paying for solar panels that are producing no electricity. So he's paying a solar panel bill and he's paying an electric bill. We tried and tried for months to try and resolve this because the solar panels were not connected to the grid and we could not figure out how to resolve the problem because the company was literally out of business and we were trying to work with the lender, which is good leap and good LEAP's.

Okay? They, we had no issues with good leap. But, nobody was gonna touch these solar panels, so because of that, I couldn't help him sell his house. We had to take it off the market, and I gave it to the family as far as trying to figure it out, and if they ever sorted it out to get back to me. I have no idea if they ever got it figured out or not.

I have no idea. The downside of this is that loan was a lien against the property. So again, that would have to be paid for for him to sell the house, but he wasn't getting any benefit from the solar panels. So that's the kind of example of some crazy stuff that can happen. So this is why the grid is very important.

Okay, so the next item is the inverter. The inverter is actually, and I've been told like the most important piece of your whole solar panel system, because the inverter is what takes the energy from the solar panels and converts it. To DC current, which is then sent to the grid where it's converted into AC current and comes back to you.

So the inverter is like the most important piece of the whole solar system as far as converting sunshine into energy and the. Instructor at the last class that I was at did say that Solar Edge is the best inverter on the market. So FYI, solar edge. Okay, so that's the next piece. And then there's the net meter, and then I'm not exactly sure what that is, but the meter is spinning to give you, let you know if you're building credit or not.

And that's, you know, running in a sense it's going backwards because you're generating. Energy versus going forward and getting higher. When you're not on the grid, when you don't have solar panels, your electric meter just keeps going up and up. Whereas when you're on solar and on the grid, that meter can be going backwards.

Good stuff. The roof is obviously the next, what is very important, you have to have a roof or a space. Where there's like no shade, no trees, there's not gonna be trees growing over and shading your solar. 'cause obviously moving, it's almost, you know, not recommended. And so you see a lot of solar panels in parking lots over parking carports, that kind of thing.

And so on your house, the solar installer is supposed to clearly evaluate the best side of the house to put your solar panels on, so that's important. And then you have the solar panels themselves, which are not, I mean, they're just collecting the sunlight and sending it over to the inverter. Okay? So there's little cells in there, and that's kind of basically the materials that are used for putting solar on your house.

So that's the basics. One of the things that was important to me or has always been. Important to me is people say, well, I don't have an electric bill, so my conversation is, but how much do you pay per month for your solar panels? Now some people, there's a lot of ways to pay for solar panels, so we'll come back to that.

But here's the thing. I live in a house of two people. We don't run the air conditioning really cool. We keep it at like 78 or 80. I know that sounds hot to some people, but it's 110 outside. 80 feels cool when you come in the house and we don't run the heat Very warm in the winter. So it's kind of like we keep warmer in the summer and cooler in the winter.

That saves energy. We also pay attention to when the electric rates are the highest. Right now, between three and seven are the highest electric rates. So we don't run the, you know, we don't run the dryers, the big one, the dryer, the dishwasher, the stove, any of those kind of things, the oven. So we try to minimize our usage there.

And so we look at all of that and go, how can we minimize our electric bill? So I would say on average our personal electric bill is around maybe $170 ish all year long. That's it. 170 all year long. Now it can get much higher in the summer, however, we just put in a brand new air conditioner. HVAC system.

It's a heat pump, and heat pumps are more efficient. And so hopefully our electric bill will go down because of the system we had was 26 years old. And as we all know, 26-year-old systems are not that efficient. So that's how I manage my electric bill. So keep that in mind. Now, your electric bill is X per month and a lot of people are buying solar now and their solar bills

are more than what their electric bill would've been, and a lot of the current solar loans and leases start at a lower rate and then ramp up over the course of the lifetime of the loan or the lease. So you may start at a lower number that works for your current usage. But it's gonna go up over the course of the say 15, 20 years.

Usually the loans and leases are 20 years. So in 20 years, your usage obviously isn't necessarily gonna change that much. It might actually go down if you have a large family, but you're still paying the same month. you're paying more every month for your lease. I just say that, right? 'cause it's a difference.

And that's something to really keep in mind. If you are installing solar, and also keep that in mind when you're buying solar, like buying house with solar, and for me, just looking at the cost of solar, it really doesn't make sense for me to do solar. And that's an important thing for people to understand is that sometimes it's not financially

in your best interest to put on solar. Just keep that in mind. So then the next thing. Just to kind of share a little bit, so this here is data from 2014 and I'm gonna, you know, attach this below. So this is data from 2014, and in 2014 I'm gonna read this. 143 people were employed in the solar industry.

 Now this side of the paper is 2023, so it's two years old, but still much more current. So I'm gonna share the difference and how solar is impacting and we are using more of it, and more and more people are buying it and installing it. So it's very important to understand how this works. Okay? So the main point of this was to say solar isn't going away, solar is not going away, and if it works for you, that's great.

 One of the things that I tell people you, well, the only thing, two things. One, is the cost of the solar system going to be less or equal to what your current electric bill is. Okay, because I know that say for instance, you install a solar system and it's on a lease, or you pay for it, we'll talk about how later, and you have it and you pay it off in 20 years.

So now you have a 20-year-old solar system sitting on your house. Now you will continue to use it, but like I just said about my HVAC system, it was 26 years old. It wasn't as efficient as the one that I put in. It. So keep that in mind. That could be an issue down the road that you're not gonna want, you're not gonna be getting the amount of electricity generated that your household needs to use, or you may need to get new panels, a new inverter, those type of things to be current with the current, you know, all the technology as it's evolving.

So just kind of keep that in mind as well. So here are the different ways that you have to understand how solar is owned and paid for if you are looking to buy a house that has solar. Now, the main thing to keep in mind, and this is makes it easy, is that. You as the buyer ask the seller for their like the last year's electric bills and it will show the kilowatts that they use and the kilowatts that their solar system has generated so that you know their usage and their

solar system if it's producing enough energy to pay for their electric usage. Okay? Then you take your current electric bills based on what your family and you are currently doing, and take it and look at your electric kilowatt usage per month. Okay? So you wanna compare it month to month because in Arizona Summers.

It can be a lot higher because of the heat. Obviously we're running our air conditioning and it's very hot. We don't have to worry about the heat so much. It's the air conditioning that kills us here. You know, I mean, last summer with the old system, our electric bills are getting up to $300 a month, and that is too much.

Way too much. So once you've looked at that. You're like, okay, their system appears to be generating enough energy to pay for our family's usage. And again, if they, you have an older home that you're either living in or renting or own, and theirs is newer, that'll make a difference as well as far as how much energy your home is using and keep that in mind.

All the appliances, the HVAC system, everything. It uses more or less energy based on the age of it. So if you have a lot of older appliances and a really old hvac, inefficient HVAC system and your air conditioner is like 20 years old, thank God it's still working, right? And they have new appliances that are energy efficient and they have an energy efficient refrigerator, freezer, dryer, air conditioner.

Their bill is going to be lower anyway. Okay. Their energy usage kilowatts is gonna be lower, so just keep all of that stuff in mind. It's all about the kilowatts right now. Okay? It's the kilowatts. Once it looks like, okay, their house, their solar system is generating enough kilowatts to meet my current family's needs.

We're gonna look, move forward on maybe buying this house. So then the next piece of that, other than the house is lovely. Obviously you have to want the house. There are other things you have to look at and there is a lot, and I have been caught, I'm gonna just say this with my pants down a few times and it has been like, oh my god, moments.

And one of them was, I had a just lovely, lovely, lovely senior gentleman. He's 87 years old. Absolutely sweetheart. And he had put solar panels on his small manufactured home and he's like, oh yeah, it's a, it's a loan and it's assumable. It's really low interest rate, all of that. And so we're like, okay, great.

No problem. And then when we actually went under contract, we went under contract on a cash offer. Thank you Lord Jesus. We always like cash. So anyway. We were dealing with the solar and the buyer's agent reached out to the solar company and they were signing the docs to get like connected. 'Cause no matter what, the current solar company, maintenance company, and or lender has to have conversation with the buyer, okay, no matter what.

And we'll come back to that as to what, so in the course of their conversation with the current lender. They found out that it was like a home equity loan. My client couldn't transfer the loan to another person. He had to pay it off, and we're like, oh my goodness. Now, he had only lived in this little house a short time.

His lovely wife had passed away, and so he just wanted to go back and be closer to his family. So he was like, I'm gonna sell the house. He did not have a lot of equity, unfortunately, so we're like, oh Lord, what can we do? Because he did not have the money to pay it, and if he did pay it, he would have no money to buy another house where he was moving.

So we went to the buyer's agent and the buyer, and we said. Would your client be willing to split the cost? 'cause obviously they were gonna benefit from the solar and from it being paid off. And again, thank you Lord Jesus. The buyer said yes, and so we were able to split the cost, but I was like, again, I felt like I should have known this, but my client, and we talked about it and we talked about it.

He kept saying, it's assumable. All the documents I looked at looked like it was assumable, but it wasn't. So my lesson from that is call the solar company, call the lender and have that conversation. So some leases are assumable. Most of the leases are assumable. So if it's a lease, you wanna look And no matter what, no matter when, if it's a lease or a loan, you wanna look at some of the following.

You wanna look at all, not some, all of the following information. One, when was the solar purchased? What was the date the solar was purchased? Like when did it go into effect the payments? And then, you know, it does it need to be paid off, obviously to sell the house. That's definitely an issue. And then the other thing is to look at what are they currently getting, and this is the important part.

The rates that the electric company is paying back to, crediting back to the current seller for the electricity they're generating. So. It keeps going down. Just so you know, so I have a little sheet, and you, you'll see this as well, but where I live, everything's APS, so I'm just gonna read off of APS. So in 2017, APS was paying 12.90 cents per kilowatt hour.

That's how much money they were crediting back. To the owner for the solar, that their solar panels were generated from 2017 until 2023, and it may be even less. I think it's about the same now it's down to 0.076 cents. So it's like. Less than 8 cents per kilowatt hour. So they're giving back less. And there are lock-in dates, so some people are locked in at the higher kilowatt credit rate, which is important.

That's why you wanna look over the lease loan. And when did they go under contract? When did they start? Because you may be eligible for the higher Credit. Okay. And then you wanna find out as you're looking through the lease loan and the loan, if it's a loan. But usually we're just gonna focus on leases because most loans have to be paid off.

I'm just saying. So we're coming back loans. So leases, is the lease a set amount every year? It's locked in for the 20 years or the life of the lease, or does it go up every year? I saw when I first started in the business 10 plus years ago, that a lot of the solar companies were selling the solar panels and seller selling it, and it was a locked in rate.

It was the same amount every month. It didn't go up every month. Now I see people paying a lower amount to get started, they say to get you in, and then every year it goes up incrementally. And I have seen some that I'm like. That's way more when it gets to year 20, like that's way more than I'm gonna be paying.

But again, we have to keep into consideration that like everything rates for electricity are gonna go up. They try to scare us saying it's gonna be really a lot. But I have some numbers about how much it's increased. In Arizona, it's not that much. In the last, say, year or two. Then again, you wanna know what's the length of the agreement, like again, when did they buy it?

When is the lease over? Because that next piece you wanna know is do they come and take the solar panels off the roof or do I renew? And again, if they've been on the roof for 20 years, I would say. Come and take your solar panels and I'll get some new ones. If it's been efficient, if it's been beneficial, because again, technology in 20 years is gonna be huge.

Hugely better. Again, keep in mind, huge disclaimer. This is just my opinions and my thoughts and what I've seen over the years, what I've learned. But again, we all know technology is always getting better, always getting better. So if you have 20-year-old solar panels on your roof, yes, they're still generating

electricity, but they may not be as deficient as solar panels today would be. And so something to think about is, when's the lease up? I'm paying for all this. Am I going to be able to renew the lease? Will I be able to buy the solar panels or can I ask them to come take them off the roof? Because again, keep in mind if it's a lease.

The solar company owns the panels. They own the inverter. They own everything. You're responsible to maintain it, meaning like don't break them, but if something goes horribly awry and there's a wind storm or whatever, the solar company will come out and repair everything. It's under the lease agreements.

Okay.

Resources:

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