Rooftop solar has become common across Maryland, and many of those homeowners eventually sell. Panels can be a selling point or a source of delay, depending almost entirely on how the system is owned. The first question I ask a seller with solar is simple: who owns the panels?
I’m Evan Weissman. I buy houses across Maryland, including some with solar systems in every kind of arrangement. Here’s how each type affects a sale and what to gather before you list.
Four ways to have solar
Owned outright. You paid cash, or paid off the loan. The panels are yours and normally convey with the house like any other fixture.
Financed with a solar loan. You own the panels, but there’s a loan against them. Some solar lenders record a fixture filing in the county land records that a title search will turn up.
Leased. A solar company owns the panels, and you pay a fixed monthly amount to use them.
Power purchase agreement, or PPA. The company owns the panels, and you buy the power they make at an agreed rate per kilowatt-hour.
Your paperwork will tell you which one you have. If you can’t find it, call the company that services the system.
Owned systems
An owned system is the easiest to sell. Gather the purchase documents, the warranty, the installer’s information, permits and the utility’s interconnection approval, and recent production records. Buyers like seeing what the system saves.
If you’ve been selling solar renewable energy credits from the system, ask the company handling them how to end or transfer that registration when the house sells.
Financed systems
A solar loan works like any other lien at settlement. The title company needs a payoff figure, and the loan usually gets paid from your proceeds. If the lender recorded a fixture filing, the title company will want it released.
Some solar loans allow a buyer to assume them, but most buyers and their lenders prefer a clean payoff. Get a payoff statement early so it doesn’t surprise you on the settlement statement.
Leases and PPAs
These take the most planning, because a buyer has to agree to take over the contract, and the solar company usually has to approve the buyer. Your contract may give you a few options:
- Transfer the agreement to the buyer, who applies with the company and typically must meet credit requirements
- Buy out the lease before settlement, using a figure from the company, and sell the house with owned panels
- Prepay the remaining payments, if the agreement allows
- Remove the system, which some agreements allow but often comes with cost and roof repair
Read your agreement for transfer terms, fees, and timelines. Start the transfer process as soon as you have a contract. Waiting on the solar company is one of the more common causes of delay I see.
What buyers and lenders look at
Buyers want to know what they’re getting and what it costs. They’ll ask for monthly payments on a lease, the rate on a PPA, the remaining term, any escalator clause that raises the payment each year, and production history.
Mortgage lenders also review leases and PPAs, including the monthly payment, because it affects what the buyer can afford. A transfer that hasn’t been approved can hold up the buyer’s loan.
Disclosure and the roof
Disclose the solar system and how it’s owned. If the roof is older, think about how much life it has left, since replacing a roof under panels means removing and reinstalling them. Buyers and inspectors will ask about it. Records of any roof leak around mounting points are worth having.
If the system isn’t working
Panels that stopped producing, a dead inverter, or a monitoring app nobody has checked in years all come up. Find out what’s wrong before you list. An owned system may still be under the installer’s or manufacturer’s warranty, and a leased system is usually the company’s responsibility to repair. A buyer will discount heavily for a system with an unknown problem, so even a simple service visit and a written report can help. If you plan to sell as is, disclose that the system isn’t working.
Solar in an estate
When the owner of a house with solar dies, the personal representative needs the solar paperwork too. Lease and PPA companies have processes for estates and heirs, but they take time. Call the company early and ask what they need, usually a death certificate and letters of administration. My article on letters of administration covers that document.
When a direct sale fits
A direct sale can simplify things when the lease transfer is complicated, the roof needs replacing, or the family just wants a clean exit. In that case, I’d typically work with you on a buyout or transfer as part of the deal. Owned systems usually don’t change much about how I’d approach the house. My as-is selling page and my article on what stays with the house cover related questions.
Papers to gather before listing
Before you list a house with solar, gather:
- The purchase, loan, lease, or PPA agreement
- Warranty and installer contact information
- Permits and the utility interconnection approval
- At least a year of production or billing records
- A payoff or buyout figure, if there is one
- The solar company’s transfer requirements, if it’s a lease or PPA
Do solar panels stay with the house when I sell?
Owned panels usually convey like other fixtures. Leased and PPA systems belong to the solar company, so the contract has to address them.
Can a buyer take over my solar lease?
Usually, if the solar company approves the buyer. Start the transfer early, since approval can take weeks.
What if I still owe on a solar loan?
The loan is usually paid off at settlement from your proceeds, and any land records filing is released.
Do solar panels raise my home’s value?
It depends on the system, how it’s owned, and the buyer. Owned systems with good production records tend to be the easiest to value.
Talk through your situation
If you’re selling a house with solar and want help sorting out the options, call or text me at (410) 498-7473. I’ll tell you how I’d handle the system in a sale.