Leased solar panels are not always the value add they seem like when selling a home. There are several factors that can actually make it harder to sell a home with leased solar panels. It may be necessary for the current homeowner to pay off the entire lease before the home can be sold hurting the seller’s bottom line.

Leased solar panels can harm value of home when selling

By: Kari McCoy


Dear Kari, my husband and I purchased our home two years ago. About six months later we added leased solar panels to our home. All was going well until my husband just received a call of a job transfer. This job is three hours away. So, naturally we will need to sell our home. Our thoughts were with our added solar, it would make our home worth more money with the whole world going “green.” When our Realtor came over to list our home for sale he told us this was not the case. In fact, he said leased solar panels can complicate or kill a home sale. Does this sound like he is telling the truth?


Thank you for your popular question. I understand how you could assume that having leased solar panels could only be a marketing plus and even fetch a higher price. Here comes the harsh truth with home buyers and leased solar panel systems. In the beginning when the solar companies sell the homeowner their leased product they tell the homeowner that the buyer can simply assume that lease if they ever go to sell their home. Now let’s look at the problems that could arise:

  • Some mortgage lenders now require the monthly lease payment to be included in the debt to income ratio calculation in qualifying for the loan. Henceforth, if the buyers’ income or credit score are not high enough to meet those guidelines there is no deal.
  • Some buyers complain when they learn they need to take over solar payments for the next 15 or more years and they don’t even receive the tax credit.
  • Some sellers price their home higher because they have solar panels, but if the buyer has the opportunity to obtain a similar home for $15,000 or $20,000 less, most buyers will choose that and then add their own solar selection.
  • Some buyers are concerned that the current solar equipment will become obsolete or will not save as much on their electricity bill as they could with more modern equipment. Solar panel years as far as technology goes is like dog years. One year can make a huge difference in efficiencies and outcome.
  • Most home buyers want solar, but they want to be able to select their own company and their own terms of the lease. They would also like to receive the tax credit for themselves.

If you are considering selling your home with leased solar panels keep in mind there is a high probability that you will need to pay the leased solar panels off in full through the close of escrow. Be wise and clearly understand your long-term obligation when committing to leased solar panels.

I am not a solar panel expert and this article is an attempt to answer a question. For further information please contact a real estate attorney.

Kari McCoy owns the Kari McCoy Group, Residential Real Estate, at Lyon Real Estate.  For more information contact McCoy at 916-933-5274 or BRE#00841588

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