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    Solar Panels: Asset or Liability?

    Do solar panels add more value to your home?  You would think so because of the potential energy savings and today’s green-minded mentality, but it’s not always the case.  There are some nuances that homeowners and consumers should know.


    If you are considering purchasing a home that has solar panels, find out if the current homeowner owns the panels or leases them and if the lease is transferable. Leases are typically transferable to a qualified lessee who meets the criteria of the solar company’s loan standards.

    Since there are monthly lease payments, it is also important to know:

    • the amount of time left on the lease term.                                                             
    • If the panels are generating energy savings.
    • What are projected future savings.


    Too often, homeowners are so excited by potential future energy savings that they sign contracts without understanding the terms.  In my experience, all they remember is that the lease is transferable to a new owner if they sell their home prior to the lease term ending.


    Some don’t look at their paperwork until it comes time to sell, if they can find it.

    When a homeowner purchases or leases solar panels, you are entering a legally binding agreement with the solar company and they register the terms of your debt arrangement with compilatory regulatory agencies and issue a UCC document. 

    One of the most common points is that they cannot remove solar panels until the lease ends. If the homeowner wants the panels removed prior to the lease expiration, the balance due on the lease must be paid in full.

    Selling a home where the homeowner outrightly owns the solar panel equipment is a less complicated transaction because it is a win-win value add for the buyer.  Perception is slightly different when there is a lease in place because the homeowner is now selling a property that is debt-encumbered.

    In most lease contracts, the current homeowner cannot cancel the lease or remove the panels.  However, they will allow them to transfer the lease to another qualified homebuyer. Initially, the potential homebuyer would assume the debt.

    They may or may not see this as an asset, although in theory it is factoring in future cost savings.

    If the seller wants to sell the house to a buyer who doesn’t want the solar, they can negotiate the lease payoff, which unfortunately would then reduce the proceeds they would receive from the sale.

    solar panel installation


    Whether the solar panels are purchased or leased, the consumer should understand what’s going on behind the scenes at a recognized solar company.  No matter how well-known the solar brand is, the company will not be the local vendor doing the installation.  

    The brand company cannot be licensed and insured everywhere so they enter arrangements with local vendors who use their name, handle the installation, and municipality compliance for them.

    I recently had a transaction where the husband and wife were amid a divorce.  I was the neutral party, so both principals spoke with me. After conducting my due diligence with the town I discovered a violation for non-compliant solar due to an expired open permit.

    The wife wasn’t a party to the solar contract or installation so she deferred me to her soon-to-be ex-husband.  He had the solar panels installed on the rear roof of the house two years prior and the solar contract was solely in his name.

    It was difficult getting information from him because he was angry. The husband became more compliant after we told him there was a bonafide buyer for the house.  At which time he paid a late fee penalty and planned for the building inspector and fire underwriter to come out to the house.

    To our surprise, the building inspector discovered that the installation on the roof did not match the drawings on file so they denied the permit closure.

    Now the fun begins.

    Getting in touch with the solar panel company was a challenge.    

    After months of frustration trying to speak to the highest decision makers at the solar company, they finally admitted wrongdoing by their independent licensed sub-contractor and agreed to correct the situation.

    If the homeowners addressed the open permit when I first brought it to their attention rather than while the house was being marketed and near the contract stage, it would have been beneficial for all parties involved.

    In this case, the solar panel company admitted that their vendor was no longer licensed to do residential installations, only commercial, and left them in a bad situation along with many other homeowners.


    From the time the town’s building dept. got involved it took five months to resolve the situation. Luckily the sellers and their buyers had a forward thinking agent and a real estate attorney who went above and beyond to uncover and correct the solar panel vendor’s wrong-doing.

    The buyers’ bank would not let the buyers close on the house with an open permit.  The municipality understood the situation and agreed to cooperate once they received the correct documentation.

    Unfortunately, the solar panel company wasn’t licensed locally and unable to pull a new permit.  They sent out their licensed engineer to re-measure and create new drawings while searching for a new vendor who they could work with in the area.

    Thankfully, the municipality closed out the older expired permit using the new drawings so that a closing could take place. In the new agreement, the newly appointed solar company vendor submitted a certificate of compliance to the town on behalf of the buyer’s.

    The house closed, and there was a happy ending for all parties involved. I learned a lot from this experience and hope you did too.

    Courtesy of Cindy Cassuto from our Briarcliff office.  Get to know her here.

    Cindy Cassuto William Raveis Legends Realty Group   


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