Should I Sell My House With the Solar Lease Still On It?

Solar panels are on a lot of roofs in this valley, and a lot of the people who put them there did not buy them. They signed a lease, or a power purchase agreement, five or ten years ago, and now they are getting ready to sell and wondering what happens to that contract.

Short version: the panels are not the problem. The paperwork is. Here is how it works.

There are three arrangements, and they behave completely differently in a sale.

You own the panels outright. You paid cash or the loan is paid off. The panels are part of the house, like the roof. This is the easy one. They can be a real plus for a buyer, especially one who has seen a July power bill.

You financed them. There is a loan, and it may be secured against the house or against the equipment. Before we list, we need to know the payoff and how the lender expects to be paid at closing. Sometimes the buyer can take over the loan. Usually it gets paid off from your proceeds.

You lease them, or you have a power purchase agreement. You do not own the panels. The solar company does. You pay them monthly, either a fixed lease payment or a rate for the power the panels produce, and the contract runs for a long time, often twenty years or more. This is the one that trips people up, because the contract does not end when you sell. Somebody has to take it.

If you are not sure which you have, the monthly statement will tell you. So will the contract, which the solar company can resend.

The buyer has to qualify with the solar company and agree to take over your contract. That means a credit check on the buyer, paperwork on both sides, and time. Solar companies have transfer departments that do nothing else, and they are not fast.

It also means the buyer is signing up for a monthly payment they did not choose, at a rate they did not negotiate, for years. Some buyers are fine with that, because the payment is lower than the power it replaces. Some buyers do not want it at all, and some lenders have their own rules about it.

So a lease does two things. It shrinks your buyer pool a little, and it adds a step to escrow that can hold up closing if it starts late.

Transfer the lease. Most common. The buyer takes it over at closing. It works when the buyer wants the panels, qualifies, and the paperwork starts early. I mean the week we list, not the week before closing.

Buy out the lease. The solar company will give you a number to end the contract, and you can pay it from your proceeds at closing. The house then sells with owned panels, which is a cleaner sale. Whether that is worth it depends on the buyout number and what the panels would add for a buyer. That is math we do together.

Prepay and transfer. Some contracts let you prepay the remaining term so the buyer takes over a lease with no monthly payment. It is a middle option and it is not available on every contract.

Remove the panels. Rare, expensive, and it usually leaves roof penetrations that need repair. I almost never recommend it.

Pull the contract and the last twelve months of statements. Call the solar company's transfer department and ask three things: what the buyout is, what the transfer requires from a buyer, and how long it takes. Get all three in writing.

Then we decide together how to present it. A lease that is explained plainly in the listing, with the monthly payment and the power it produces, is a known quantity. A lease that a buyer discovers in escrow is a reason to walk.

The panels themselves rarely decide whether your house sells. What decides it is whether the buyer understood the arrangement before they wrote the offer, and whether the transfer paperwork started early enough that it is done before closing day. Both of those are in your control.

Call 702-881-6562 or email JArendt658@gmail.com. Tell me which company and whether it is a lease, a loan, or paid off. I will tell you how it changes your sale, what to ask the solar company, and whether a buyout makes sense for your house. If it does not, I will say so.

John Arendt has sold homes across the Las Vegas valley for 20 years, in Henderson, Summerlin, Southern Highlands, Anthem, Boulder City and North Las Vegas.

This article is general information, not legal or financial advice. Solar contracts vary. Read yours, and talk to the solar company and a lender about your specific situation.