Should you install solar panels on your home?
As more homeowners look to reduce their carbon footprint and energy bills, solar panels have become an increasingly popular home upgrade. In many cases, they can offer long-term savings and environmental benefits. However, when it comes time to sell your home, solar panels can also bring complications—especially if they are leased or financed.
In this blog post, we’ll break down the pros and cons of installing solar panels, and what you need to know if you're planning to sell your home with solar already installed.
Pros of Installing Solar Panels
✅ Lower Energy Bills
Solar panels can significantly reduce monthly utility costs. In some regions, homeowners even generate surplus electricity that can be sold back to the grid.
✅ Environmental Benefits
Solar is a clean, renewable energy source. Installing panels helps reduce reliance on fossil fuels and lowers your home’s carbon footprint.
✅ Potential Tax Credits & Incentives
Homeowners may be eligible for federal solar tax credits (like the Federal Solar Investment Tax Credit (ITC)) as well as state or local rebates.
✅ Increased Home Value (Sometimes)
According to multiple studies, homes with solar panels can sell for more—provided the system is owned outright. Buyers often appreciate the potential energy savings.
Cons of Installing Solar Panels
❌ High Upfront Costs
A typical solar system can cost $15,000 to $30,000 before incentives. Even with financing or leasing, it’s a major investment.
❌ Aesthetic or Structural Concerns
Panels may not complement all home styles, and not all roofs are ideal for installation (especially older or shaded roofs).
❌ Complexity When Selling
The biggest drawback for sellers? The solar panel system may not transfer easily to the buyer—especially if it’s leased or financed.
Selling a Home With Solar Panels: What You Need to Know
1. Do You Own the Panels or Are They Financed/Leased?
Owned Outright: If you paid cash or have finished your loan, this is the most attractive setup to buyers. The system transfers with the property without strings attached.
Financed (Loan): You may have a loan through a bank or solar company. You must pay it off at or before closing, or see if the buyer qualifies to assume it.
Leased or Power Purchase Agreement (PPA): You don’t own the panels—you’re leasing them or buying the energy they produce. These contracts typically last 15–25 years and can complicate a sale.
Transferring or Paying Off a Solar Loan or Lease
🔄 Transferring a Solar Lease or PPA
Process: Contact your solar provider early. They will initiate the transfer process with the buyer.
Buyer Credit Requirements: Most companies require the new buyer to meet certain credit score minimums, often 650 or higher.
Timing: Allow at least 3–6 weeks for the transfer process—longer if the buyer doesn’t initially qualify.
Costs: Typically, there are no transfer fees, but this varies by company. The buyer must agree to take over the monthly payments.
Important Tip: If the buyer is unwilling or unable to assume the lease, you may have to buy out the remaining lease balance at closing—this can be $10,000–$20,000 or more, depending on the contract.
💰 Paying Off a Solar Loan Before Selling
Process: Contact the lender for the exact payoff amount.
Timing: Allow at least 2–3 weeks for processing. You'll often handle this just like paying off a mortgage during closing.
Considerations: Once paid off, the system becomes your property and transfers with the home, making it more appealing to buyers.
Tips for a Smooth Sale With Solar Panels
Disclose Early: Be upfront with buyers and their agents about your solar system status.
Provide Documentation: Have contracts, warranties, maintenance history, and energy savings data ready.
Work With a Solar-Savvy Agent: Real estate agents with solar experience can better market your home and navigate financing hurdles.
Highlight Savings: If your panels significantly reduce electric bills, show past utility statements to demonstrate value.
Final Thoughts: Is Solar Worth It?
Installing solar panels can be a smart long-term investment, especially if you plan to stay in your home for 5–10 years or more. If you own the system outright, it can be a strong selling point.
However, leasing or financing solar panels comes with caveats—especially when it’s time to move. If you're planning to sell within the next few years, carefully consider the financial structure of your solar agreement and whether buyers in your market are receptive to taking on a lease or loan.
📞 Questions About Selling a Home With Solar Panels?
If you’re thinking of installing solar or already have a system and are planning to sell, contact our team of real estate professionals today. We’ll walk you through your options and help you navigate the process for a smooth and successful home sale.