Buying Home with Solar Panels

​Purchasing a home with solar panels can provide long-term energy savings and environmental benefits. However, not all solar installations are structured the same way…

​Buyers should evaluate ownership, tax implications, insurance coverage, and future costs before closing. Below are key considerations to review.
 
1. Determine Who Owns the Solar Panels
The most important factor is whether the system is:
 
Owned outright by the seller

• Considered part of the real property.
• Typically transfers with the home.
• No ongoing solar payments (other than maintenance or financing if applicable).

 
OR, Financed with a loan

• Confirm whether the loan will be:
  • Paid off at closing, or
  • Assumed by the buyer (if allowed).
• Review interest rate, remaining balance, and monthly payment.

 
OR, Leased or under a Power Purchase Agreement (PPA)

• The solar company owns the system.
• Buyer must qualify to assume the lease/PPA.
• Review:
  • Monthly payment structure
  • Escalator clauses
  • Remaining term (often 15–25 years)
  • Early termination provisions

 
Leases and PPAs can complicate transactions if the buyer does not qualify or does not want to assume the agreement.
 
2. Verify System Performance and Age
Request:

• Installation date
• Warranty documentation (panels, inverter, workmanship)
• Recent electric bills
• Production history (often available via monitoring apps)

 
Key considerations:

• Solar panels commonly carry 20–25 year performance warranties.
• Inverters may require replacement around years 10–15.
• Determine if production aligns with current household usage.

 
3. Understand Property Tax Implications
In many states, solar installations are excluded from property tax assessments, but rules vary.

• Confirm whether the installation increased the assessed value.
• Verify any applicable exemptions.
• Review local state guidance.

 
4. Confirm Insurance Coverage
Homeowners insurance should:

• Cover the panels (if owned).
• Reflect updated replacement cost.

 
If leased:

• Determine which party is responsible for insuring the equipment.

 
Request written confirmation from the insurance carrier before closing.
 
5. Review Net Metering and Utility Agreements
Confirm:

• Whether net metering is in place.
• If it transfers to the new homeowner.
• Whether utility rates or credit structures have changed.

 
Some utilities modify net metering rules over time, which can materially impact expected savings.
 
6. Evaluate Roof Condition
Solar panels can last 25+ years. If the roof is near the end of its life:

• Panels may need to be removed and reinstalled for roof replacement.
• Removal/reinstallation can cost several thousand dollars.

 
A roof inspection is strongly recommended prior to purchase.
 
7. Confirm Eligibility for Tax Credits
Federal residential solar credits generally apply to the original purchaser of the system.

• Buyers of homes with existing solar typically cannot claim the credit if the prior owner already did.
• If purchasing a new-construction home with solar included, confirm how the credit was handled.

 
Consult a qualified tax professional for specific guidance.
 
8. Obtain Documentation Before Closing
Request copies of:

• Solar contract (purchase, loan, lease, or PPA)
• Warranty information
• Maintenance agreements
• Utility interconnection agreement
• Monitoring system access

 
All documents should be reviewed before finalizing the transaction.