Should You Add Solar Panels To Your Home?
Written by Graham Team · Graham Team Real Estate Advisors — Henderson & Las Vegas, NV · Contact
Evaluate if adding Las Vegas solar panels boosts home resale value. Compare NV Energy power rates and solar lease contracts before upgrading your…
Dated: July 13 2023
There are several reasons you may consider solar. Whether it's green energy, control the power on your home, or wanting to save money.
If you are looking at solar to save money... before you sign that solar contract, we recommend you complete an analysis based upon the data the solar company is providing. They typically make some assumptions, such as an annual appreciation of power for NV Energy. We are all experiencing a significant jump this year on our NV Energy rates, about a 30% increase in the last five years.
Historically, this has not been the case. An S&P Global report showed that between 2009 and 2018, Nevada’s electricity prices fell 14%. That's more than any other state. So why is Nevada’s power making such big swings?
Most of NV Energy's customers received a letter in February explaining why. Most of our power comes from natural gas, not the solar panels we see south of our city. The price of natural gas has jumped significantly at the end of 2021 / into 2022 causing our electricity rates to follow suit. In order to determine what the next 20 to 25 years will look like for NV Energy's rates (the length of time for a typical solar contract), you have to look at what's going to happen with natural gas prices.
If I sell your home five years from now and you have a solar lease with a rate above NV Energy's rate per kW, then this will negatively impact the resale value.
I love excel spreadsheets, so I have put together a solar analysis that I can share with you to help you evaluate this decision to add solar to your home. For every analysis, there are assumptions made. The solar company's presentation assumes NV Energy rates will rise annually at a certain percentage usually greater than the 2.9% or 3% annual rate increase built into their contract.
If you would like this analysis spreadsheet, you can email us at team@grahamteamnv.com.
Frequently asked questions
How do solar panels affect my home's resale value?▾
Adding solar can increase your home's value, but only if you own the system. If you have a solar lease with a rate higher than current NV Energy rates, it can negatively impact your resale value. Buyers are often hesitant to assume costly, long-term solar lease contracts when purchasing a home.
Should you add solar panels to your home before selling?▾
If you plan to sell your home in the near future, you should not add solar panels to your home. Solar contracts typically last 20 to 25 years. A new buyer must agree to take over your lease or loan, which complicates the sale, and you rarely recoup the initial installation costs quickly.
How do I determine if solar panels will actually save me money?▾
To see if you will save money, analyze the solar company's assumptions against historical utility rates. Many solar presentations assume NV Energy rates will rise faster than the 3% annual increase built into their contracts. However, Nevada’s electricity prices actually fell 14% between 2009 and 2018 before recent natural gas spikes.
Is it better to buy or lease solar panels when planning to sell?▾
Buying solar panels outright is always better for resale. Owned panels add equity and transfer easily to the new buyer. Leased panels require the buyer to qualify for and assume your 20-to-25-year contract, which can deter potential buyers and delay your home sale if they refuse to take over the lease.
Why do Nevada energy rates fluctuate, and how does it affect my solar decision?▾
Nevada's utility power relies heavily on natural gas rather than solar energy. Because natural gas prices fluctuate significantly, NV Energy rates experience unpredictable swings, like the recent 30% jump. Before signing a long-term solar contract, you must evaluate whether natural gas prices will remain high enough to justify long-term solar savings.
What happens to my solar contract when I sell my home?▾
When selling, you must either pay off the remaining balance of your solar loan or transfer the lease contract to the buyer. Transferring a lease requires the homebuyer to meet the solar company's credit guidelines. If the buyer refuses or fails to qualify, you may have to pay off the contract to close escrow.