Selling a House With Solar Panels: Leases, Loans and Liens
Solar can help a home sell, or it can stall the sale at the closing table. It depends on what kind of solar agreement you have and what's recorded against your property. Start early.
If you own the system outright
Paid-off panels usually transfer with the house like any other fixture. Gather your warranty, production history and permits for buyers.
If you have a solar loan
Most solar loans must be paid off at closing, from your sale proceeds. Some lenders record a UCC fixture filing on the panels, which a title company will flag. Ask your lender for a payoff letter and how the filing will be released. A few lenders allow a buyer to assume the loan.
If you have a lease or PPA
The solar company owns the system, so you typically have three options:
- Transfer the agreement to your buyer, who usually must pass a credit check and agree to the remaining term and any escalator.
- Buy out the system using the price in your contract, then sell it with the home.
- Prepay the remaining payments, if your contract allows.
Some buyers and lenders don't want a 20-year lease with rising payments. That's when a solar contract can cost you a sale or force a price cut.
UCC filings and liens
A UCC-1 fixture filing is a public notice that a company has a claim on the panels. It isn't a mortgage, but title companies often require it to be released or addressed before closing. If you didn't know about it, ask the company for a copy and how to clear it.
Tips for a smoother sale
- Request your transfer packet or payoff letter before you list.
- Tell your agent about the solar agreement up front.
- Expect the transfer to take several weeks.
- Keep records of all communication with the solar company.
If the contract terms were misrepresented when you bought, and they're now hurting your sale, read how to cancel a solar contract.
Related guides
- If your solar company closed
- How to file a complaint
- How to cancel a solar contract
- Solar escalator clauses explained
- All guides
This guide is general information, not legal advice. Laws change and vary by state. Talk to a licensed attorney in your state about your situation.