Buying or Selling a Home With Solar Panels in Massachusetts: What You Need to Know

If you’re a Massachusetts homeowner thinking about selling your single-family home with solar panels—or you’re a buyer considering a home with solar—there are a few important things to know. Solar can be a great feature, but the details of the solar agreement attached to the house really matter. Here’s what you should keep in mind as you navigate the process in South Coast MA and surrounding communities.

Solar Panel Agreements: Understanding the Differences

• Owned Solar Panels: If the panels are owned outright, they’ve been paid for in full and belong to the homeowner. When you sell, the panels usually transfer to the new owner along with the house.
• Financed Solar Panels: If the panels were purchased with a loan, it’s important to review the loan agreement. Depending on the financing agreement, the loan may need to be paid off or other requirements may apply when the property is sold. Check your paperwork and talk with your lender to understand your specific situation.
• Leased Solar Panels: With a lease, the homeowner pays a monthly fee to use the solar system, but doesn’t own the equipment. The lease agreement will outline what happens when you sell. Transfer requirements, including whether the buyer needs to qualify, can vary by provider and contract.
• Power Purchase Agreement (PPA): A PPA is not the same as a lease. With a PPA, a third party owns the solar equipment, and the homeowner purchases the electricity generated at a contracted rate. The agreement will explain how the contract can be transferred to a new owner. Requirements and options depend on the provider and the specific contract.

Why the Type of Solar Agreement Matters

The kind of solar agreement on a home can affect the real estate transaction in several ways:

• Transfer Process: Depending on the agreement, you may need to transfer a contract, pay off a loan, or provide documentation to the buyer. Some arrangements are straightforward, while others require more coordination.
• Impact on Financing: Lenders often want to review solar documents before approving a mortgage. If you’re buying, share these documents with your lender early to keep the process moving smoothly.
• Contract Terms and Options: It’s important to know how much time is left on a lease or PPA, and whether the agreement provides any payoff, buyout, purchase, or other options when the home is sold.. These details can influence a buyer’s decision and the timing of your sale.

Seller Checklist: Preparing to List a Home with Solar

• Identify the type of solar arrangement (owned, financed, leased, or PPA).
• Locate the original solar agreement or contract.
• Determine the remaining term of the contract or loan.
• Review your agreement for transfer, payoff, or purchase options.
• Contact your solar provider to discuss the process for selling your home.
• Gather recent electric bills and solar production statements.
• Make all documents available early in the transaction for your real estate agent, buyers, and their lenders.

Buying a Home with Solar? Ask for the Documents Early

If you’re considering a home with solar panels, don’t wait until the end of the transaction to understand the solar arrangement. Ask what type of system is in place and request the applicable contract, loan or ownership documentation. Review the remaining terms and transfer requirements, and provide the documents to your lender early in the process. If you have questions about the legal terms of an agreement, your attorney can help you review them.

Every Solar Setup is Unique

Solar agreements can vary widely depending on the provider and contract. Review your paperwork, talk with your real estate agent, and reach out to your solar provider early in the process. If you’re buying, ask for all solar documents as soon as possible so you and your lender know exactly what’s involved.

Thinking about selling a home with solar panels in Massachusetts? Understanding your solar agreement before you list can help you prepare for buyer questions and avoid unnecessary surprises during the transaction. I’d be happy to help you get organized and prepare your home for the market.

Angela Crosson, REALTOR®
Massachusetts & Rhode Island
onyxcoastal.com