Selling a Home with Solar Panels

Selling or buying a home with solar panels can be tricky. While solar panels are agreat benefit for any home owner looking to save money on utilities, it isimportant to do your own due diligence on the type of solar panel agreement youwill be inheriting from the previous owner. You need the expertise of a realestate attorney and knowledgeable real estate agent well versed in thedifferent type of solar agreements.

 From the Seller perspective, if you are selling your home with solar panels, it is important to gather all the necessary documentation needed so that your home is listed properly and to disclose the monthly costs up front to any potential buyer and/or agent.  

Here are some of the top questions to ask and investigate when looking to sell or buy a home with solar panels.   

Are the panels leased, financed or owned outright?

A. Leased - compare this to leasing a car, this is the most common type of solar agreement. You do not own the solar panel system and you make monthly payments for having the panels on your roof. You then use the solar energy the system produces to offset your utility bill through net metering. In return for the solar energy, you pay the solar company a monthly fee that is less than your electricity bill. Usually The term of the lease is around 20 to 25 year lease terms

 When a seller, gather a copy of the lease, amount of lease payment and determine what type of lease agreement you have.‍

Types of agreements

Power purchase agreement-monthly amount fluctuates depending on how much energy the solar panels produce.  You are paying for each kilowatt hour of solar energy you use.

Solar Lease-you pay a flat free each month,payment amount will be outlined in lease contract and the payment will be less than your utility bill.  For example, if your bill was $150 a month,your solar lease payment may be $80 a month.

B. Financed Panels- homeowners are paying a monthly loan and the panels will be owned at the end of the loan term.

You need the finance information-amount left on the loan, term of the loan and monthly payment

Need the financing agreement

You need to determine if the homeowner will be paying them off at closing or will the new owner be assuming the loan? This is VERY IMPORTANT to determine at the start of the negotiations.

Owned outright- this means there is NO MONTHLY PAYMENT AND THEY ARE ALREADY PAID OFF, only bill should bethe PSEG electric bill

 The other most important document to collect is a full year of electric bills. Depending on the time of year, the solar panels generate different amounts of energy, thereby your monthly bills will vary. For example, solar panels generate more energy in the summer, so your utility bills are generally much lower versus the winter.  It is important for a potential home buyer to determine their monthly budget and the full year of bills are extremely helpful for this.

 If you are a potential buyer of a home with solar panels, your loan officer will also need the above information. Any Additional monthly expense on a home needs to be disclosed to ensure the buyer will qualify for their loan.

Whether you are a seller or a buyer,the attorneys representing the parties need to have all the agreements and information prior to signing any formal contract of sale.  The listing agent of the property also must advertise the panels correctly.

The best piece of advice for anyone buying or selling a home with solar panels is to get organized early on in the process. The more you know up front, the better educated you will be to make the best decision for yourself.

For anyone looking for an attorney with the experience and knowledge regarding solar panels, please contact the Law Office of Kelly A. Dantuono, Esq.