Considering purchasing a house with a brand new set of sparkling solar panels on the roof? Nonetheless, what if these panels do not belong to the owner of the house, but instead are on lease from a solar company? This situation has some peculiar things that should be noted by potential buyers. We will look at the various aspects concomitant with buying a home with leased solar panels to help you arrive at an informed decision.
Should I Buy A House With Leased Solar Panels?
Ideally, no you should not buy. If the solar panels are paid off or the current owner is ready to clear off the amount, then it is a great investment. Otherwise, it is better not to purchase a house with a loaned or leased solar system.
Moreover, you may not get the same incentives that the previous homeowner was accessing. Also, a house with a solar lease is difficult to sell because the you (new owner) needs to get the lease transferred to your name or the seller needs to buy out the lease. For this reason, you must consider the following reasons before purchasing a home with leased solar panels.
If Transferring the Loan: Factors to consider
Based on the previous owner’s payment history, the transfer process can be seamless.
- Bad Payment History – If there were missed payments, it is better not to purchase that house. With these houses, there are always challenges when you try to secure a mortgage approval.
- Type of Loan – A solar system loan use the house as collateral security. This loan can be secured or unsecured. If it is the former then the lender can place a lien on the house otherwise in the latter case the bank can take the ownership of the house.
- Removing the Panels – In certain cases, installers remove the panels when the house is sold. But this cannot be the case if panels are not paid off.
Do you know: In California and Florida, a property-assessed clean energy loan (PACE) finances the solar panels. Local and state governments finance these loans.
After understanding the reason behind why not to purchase the house with leased solar panels, if you are considering going ahead with the idea, then consider the following factors while making the purchase.
- Age of the Panels – If pre-installed PV panels are more than 15 years old then it is better not to purchase that house. We all know panels are susceptible to PID and LID every year, regardless of maintenance. Thus, the older they are, the less output they give.
- Roof Age and Condition – In case, the roof needs replacement, it should be done before the solar panels are installed. Make sure to check the roof age and when was the panel removal and reinstallation done. Read here how to find out if the roof is suitable for solar panels?
- Installation Company – Always ask about the company that installed the solar panels on the house. Look them up for how trusted they are and what do their customers say about their services.
Find out in detail about ways in which solar panel removal and reinstallation is possible.
So all in all it comes down to weighing down the various costs associated with a leased and a loaned solar panel. In the end, some may prefer short-term savings over the long-term goal of your property gaining significant value and so those people will prefer a home with a leased solar panel over getting a solar panel financed by a solar loan.
Does A Buyer Have to Assume Solar Lease?
No, a buyer is not obligated to assume the existing solar lease on a house. However, there are some things to consider if you’re interested in doing so:

- Approval Process: Even though you are interested in taking over the lease, both your lender and the company dealing with solar installations should give their consent before it happens; it may involve a credit check on you by the client and putting into consideration such payment when calculating how much mortgage loan entitlements you get.
- Financial Qualification: Ensure that both your total earnings and personal rating satisfy what is expected of an individual buying into a lease from any lending institution or the financier himself.
Again remember if things don’t go as you planned, options exist for you!
- Negotiate Buyout: Before the sale, the seller could negotiate a buyout with the solar company about leasing.
- Walk Away: If you don’t want to assume the lease and the seller declines negotiation for a buyout, just leave.
Also Read: What Happens When You Pay Off Your Solar Panels?
Can I Break the Solar Lease after Buying the House?
Yes, you can. This will depend purely on the terms of the lease. Many contracts have a hefty fee if you break the lease early. Check the “early termination clause” in your lease agreement to see what the cost might be.
After 5-7 years, you might be able to buy out the remaining lease and own the panels outright. But if you are paying off your lease amount before the maturity date, it will be a lump sum amount which will be more than monthly installments. Thus, before making such a decision, consider current market trends. Find out how Can You Cancel Solar Panel Contract After Installation?
Buying A House With Leased Solar Panels: Pros and Cons
Pros | Cons |
Cost-effective option for environmentally-conscious people. | Low saving potential over the panels’ lifespan. |
No down payment for installing solar panels | Increased monthly fees with an escalator clause, leading to more loss. |
Good savings on electricity bills with predictable pricing. | Complex transferring process and you will not be the owner of the panels. |
Benefits of net metering. | No benefits from incentives and tax credits. |
System maintenance is not your responsibility. | You will be locked into a long-term (life-long) contract. |
So, we hope you got the answer to whether should you buy a house with leased solar panels. There are certain ups and downs when buying such a house. Thus, it is recommended to get leased solar panels after purchasing the house. However, the end decision is yours, and now that you know the process, you can opt for whichever system you like. Do not forget to share this with everyone and spread awareness.
Recommended: How to Get Out of a Solar Panel Contract?