Driving home the other day I noticed that our development had installed solar panels on the roof of the pool building. It was yet another bright, sun-filled day, and the idea of solar panels and renewable, clean energy just made sense. Why shouldn’t each home in our complex be connected to a solar grid?

Mary Layman

Mary Layman

I recalled a conversation with a contractor friend who had just finished building a custom home in Goleta, and how he wowed us with stories of selling electricity back to the electric company, low electrical bills and of plugging in his electric car and filling up — for free! We had also heard the other side — the steep cost of installation and the 10-year average return of investment, leased solar costs that a new buyer would be asked to assume.

I thought it was time we opened up a new discussion: Where are we, in California, in the use of solar energy? How expensive is it, really? And beyond the savings to us as consumers, does the installation of solar panels add value and equity to a house? So, let’s begin our exploration of this “hot” topic.

The first question we should ask is: Should we buy, or should we lease? The way solar leasing works is that a company installs panels on your roof. Rather than paying for the panels themselves, you are charged for the electricity they generate. (The exact way this works depends on the agreement you sign. In some cases, you’re charged for all the electricity the system generates, and the extra that goes into the grid generates a credit from your local utility company to lower your bill. In other cases, you are charged a fixed fee from the solar company regardless of how much energy your panels produce.) In many cities across the United States, the solar electricity rate is actually lower than what you’d pay on your regular utility bills.

So I could save money and reduce pollution by leasing solar panels? It sounded like a no-brainer. But what about buying the panels outright?

Like me, you are probably questioning what the upfront cost of solar panels is worth. You might be wondering, “What if I do intend to sell my house?” While it is true that solar panels require a sizable investment, the tax credits, rebate programs and the significant increase in the home’s resale value empower homeowners to recoup the initial cost of the panels. The National Bureau of Economic Research states that once the subsidies and energy savings are accounted for, homeowners who went the solar route will have recouped 97 percent of their initial investment.

Yet even if you don’t sell your home, the solar panels will provide a generous return on the original investment that adds up quickly over time. On average, an investment in residential solar typically pays for itself in six years. So if you plan to remain in your house for more than six years, not only will you recoup the original cost, but you’ll receive a return on your investment.

In my own research, I have begun to look at ways to reduce the cost of the initial installation — is there a neighborhood co-op, for instance, that can organize bulk purchases at a steep discount (by spreading the cost across many families so the cost would be lowered). At this point, buying solar panels seem even more attractive than leasing, with a 30 percent federal tax credit, renewable energy credits and additional savings as part of a group purchase, I would only pay a fraction of the upfront cost of solar.

All in all, it seems obvious that the investment in solar panels and renewable green energy are a wise investment for both the long-term homeowner and those looking to sell their property in a competitive market. Feel free to email or call me with any questions you might have about solar panels and the value of your home, especially if you are thinking about selling in this great market.

— Mary Layman is a Realtor with Berkshire Hathaway HomeServices California Properties. She can be reached at mary@marylayman.com or 805.448.3890. The opinions expressed are her own.