Solar systems are designed to last for decades, so there is a good chance you may sell your home while the system is still operating.
What happens to the solar system during a sale depends largely on how it was purchased and whether there is any remaining financing, lease, or other agreement attached to it.
The important thing is to understand those details early so there are no surprises when the property goes under contract.
If You Own the Solar System
If the solar system is fully paid for and owned by the homeowner, it will typically remain with the property when the home is sold.
An owned solar system can also be an attractive feature for buyers, particularly when it is producing a meaningful portion of the home’s electricity. However, the amount of value a buyer or appraiser assigns to solar varies by property, market, system age, production, and other factors.
When listing the home, make sure your real estate agent knows the system is owned and has accurate information about it.
If the Solar System Is Financed
If there is still a loan balance on the solar system, review the financing agreement before listing the property.
Some solar loans may need to be paid off as part of the sale, while others may have different options. Requirements depend on the lender, loan structure, and any liens or other security interests associated with the financing.
Your lender, title company, and real estate professional can help determine what needs to happen before closing.
If the System Is Leased or Under a Power Purchase Agreement
With a leased solar system or power purchase agreement, the homeowner generally does not own the solar equipment outright.
The agreement may allow a new homeowner to take over the contract, but the buyer may need to meet the provider’s requirements. Other options, such as purchasing the system or paying off the agreement, may also be available depending on the contract.
Contact the solar provider early in the selling process so you understand the transfer requirements before accepting an offer.
Keep Your Solar Records
Good documentation can make the sale much easier for the buyer, real estate agent, lender, appraiser, and title company.
Keep records such as:
- Installation date
- Solar panel and inverter make and model
- System size
- Equipment warranties
- Installer information
- Financing, lease, or ownership documents
- Monitoring information
- Service and maintenance records
- Utility and interconnection documents
Recent electric bills and solar-production records can also help a buyer understand how the system has been performing.
Plan Ahead
If you are thinking about selling a home with solar, it is worth reviewing your system paperwork before the property goes on the market.
Knowing who owns the equipment, whether there is an outstanding balance, what warranties may transfer, and what information a buyer may need can help keep the transaction moving smoothly.
And if you’re buying your next home and considering solar again, our Energy Consultants can help you understand the options available for the new property.