How to Buy or Sell a Home With Solar Panels

Today, having solar panels on your home is one of the most sought-after home upgrades available. But what happens if you’re moving into or out of a home that has solar panels? Here’s what to know before making any final decisions. 

Buying a Solar Home

If you are buying a home that already has a solar panel system, it’s important to be fully informed about the system and the associated terms so you can assume responsibility without any surprises. Here are some key questions you should ask before moving forward with a purchase. 

Are the panels owned, financed, or leased? 

Finding out if a home’s system is owned, financed, or leased is the most important step you can take before agreeing to purchase a home with solar.  

An owned system means the original owner has fully paid for the system, which means you can enjoy the benefits of solar immediately and without any additional payments. The system will typically be included in the sale price of the home, which can be confirmed during the home’s appraisal. 

An owned system can also be financed with a loan and paid off over time. If there are remaining loan payments at the time of the sale, the seller can either pay it off prior to the sale or transfer the loan to the buyer.  

If you are considering taking over a solar loan, it is important that you have a complete understanding of the terms and payment history. First find out if the seller has ever missed a payment, as this will likely impact your ability to get a mortgage for the property if you take on the loan. Additionally, you should understand if the loan is secured (backed by a collateral asset) or unsecured. Solar loans are typically unsecured but if the loan is secured, it may be using the home as collateral. In this case, the lender can place a lien on the home if a payment is missed. Lastly, confirm what requirements you need to meet for the lender to approve the loan transfer.  

Overall, it is typically best to have the seller pay off the loan. If they are not equipped to do this, you can negotiate an agreement in which you pay more for the home, and in turn they agree to pay off the loan in full, allowing them to transfer full ownership of the panels to you.  

A leased system is owned and maintained by the solar installer, and the homeowner uses the solar power in exchange for making monthly payments to the installer. As the buyer, you will either have the lease transferred to you to continue the payments, or the original owner can buy out the system, and you will simply benefit from the energy produced. If you agree to take over the lease, you will be entering into a long-term contract with the company that owns the panels. You should thoroughly understand the terms of the contract and vet the solar company before agreeing to this option.  

How efficient is the system’s performance? 

To understand how the previous owner has been faring with the system, you should ask to see their electric bills from before and after they went solar, as well as system monitoring data. These will give you insight into how big the system is, how much energy it produces, and how much money you’ll be saving when you assume responsibility. If you’re new to solar and need help deciphering this information, feel free to contact the solar installer for clarification. 

For extra precaution, you can also ask the installer to perform an inspection of the panels. They can thoroughly assess if there are any issues with the system that could impact performance in the future. 

What is the lifespan of the system, and are there any warranties? 

On average, solar panels last around 25-30 years and have manufacturing warranties for parts that range between 20-25 years; sometimes the installer will also have workmanship warranties. Ask when the panels were installed and how many years are left on the warranties to get the full scope of the system’s lifespan. 

Who installed the system? 

Ask the seller about the company who installed the solar panel system. Then look into whether the company is still operating – solar companies have a track record of going out of business if they aren’t well established. 

If they’re still in business, that’s great! You should get in contact with them for extra support during this transition, as well as future support with maintenance and cleaning. If they are no longer in business, or do not provide ongoing maintenance, you should consider that you will have to find another company to assist you if you run into any issues with the system.  

Selling a Solar Home

A solar system increases property value, so you will typically be able to sell your home faster, and at a higher price than a comparable home without solar. You should be prepared to answer common questions the buyer may have to ensure a seamless selling process.  

How does the system’s financing impact the sale?  

If you own the system on your home, it’s considered a fixture or asset and is included in the sale price, determined through the appraisal. Because of this, transferring the system to the new homeowners is relatively straightforward and will require minimal time and paperwork to handle during the sale process. 

Similar to a fully purchased system, a system financed with a loan will also be included in the property’s value. However, if the loan has an outstanding balance, you will need to either pay it off or transfer it to the new owners. Negotiating a loan transfer can be complicated and time consuming, so if possible, it is best to pay the loan off before starting the process of selling your home.  

If you lease your system, it is typically not included in the home value because it is owned by the solar installer. You will have to either transfer the lease to the next homeowners or buy the system to get out of the lease agreement. You should proactively reach out to the company that owns your system to find out what would be required to transfer the lease to a new homeowner. For buyers who are not familiar with leasing solar, the structure of this agreement may be confusing. You should start conversations about your leased system with potential buyers early on to understand if they are open to taking over the lease. Lastly, transferring a lease can be time consuming, so your sale process may take longer than if you own the system outright.  

What documentation and information will the new buyer need? 

To ensure a smooth inspection and appraisal process, you should have all the system documentation readily available. The most important documents you’ll need are the contract, monitoring system information, and warranty information. 

The contract agreement is the most crucial item you will need when selling your solar home. Depending on the agreement type, and what your installer requires, your buyer may need to sign a new contract. Reach out to your solar company to find out what they will need to process the transfer. 

Next, you will need to look into your system’s warranties. Solar panel systems always have product warranties, and installers will sometimes provide performance and/or workmanship warranties. Find out from the installer which warranties apply to your system, and if they are tied to the property, the system, or the owner.  

Additionally, you usually have a monitoring system connected to your panels that provides real-time performance data, ensuring the system is functioning properly. The new homeowners will need to be able to access this system, and you should understand what will be required to set this up. For example, our customers use Enphase’s online monitoring system, and homeowners are required to submit a transfer request and pay a small fee to complete the transfer process. 

You may also need to notify your utility company about a system transfer. Not all utility companies require this but check with yours to make sure all your bases are covered. In Washington DC and Maryland, you must notify PEPCO that you’re moving, so they can keep accurate records. 

What are the main benefits of a home with solar?  

Buyers who are not familiar with solar power may need help understanding the value of purchasing a home with a solar system. Clearly communicating how you have benefited from going solar can help relieve some of the hesitancies potential buyers may have about owning a home with solar.   

Some things worth mentioning to buyers include energy savings, independence from unreliable utility grids, and financial incentives like SRECs or net metering. Additionally, if you have battery storage, or electric vehicle charging as part of your system, you should be sure and mention that, as those assets can provide additional benefits to the buyer.  

Lastly, your utility bills can show the financial value of your system, so make sure to collect a few bills from before and after you went solar to help potential buyers understand the financial impact of solar. 

Final Thoughts 

Buying or selling a home with solar panels can be a win-win — for your wallet and the planet — as long as you understand the details. A little research and communication can go a long way toward making the transition seamless. 

Whether you are the buyer or seller, you should confirm all of this information with the solar company that installed the solar panels, your real estate agent, and any other third parties involved in the sale of your property. 

If you’re considering installing solar or want to learn how solar could boost your property value, Solar Solution can help you explore the best options for your home.