As the cost of electricity rises and environmental concerns become more prominent in the global conversation, it is not surprising that more Americans are turning to solar power to provide energy for their homes. A 2022 survey by the Pew Research Center* found that 8% of U.S. homeowners said they have already installed rooftop solar panels and an additional 39% have given serious thought to it in the past year.

Solar panels give consumers the ability to save money by creating a natural source of energy – and one of the most affordable ways to do that is to lease the equipment from an independent solar energy producer. The homeowner signs a contract, usually for a 20-year term, and documents confirming the provider’s interest are filed with the county recorder’s office.

When the property is listed for sale, the recorded documents confirming the solar lease are reported in the Preliminary Title Report, and the lease/contract must either be bought out on or before closing, or assigned to the buyer who is purchasing the property.

In the latter case, the new owner must be willing to take on the benefits and any remaining costs for the lease, subject to the same or sometime stricter requirements as the original owner – and the buyer must be approved by the solar energy producer.

As the listing agent, it is important to know in advance if a solar power lease is in effect on your listed property and what requirements will be assigned to the new owner. Many buyers view installed solar panels as a plus and willingly assume the lease. If the buyer balks, however, some sellers may choose to save the sale by crediting the buyer with funds to offset the remaining cost.

It is equally important to advise your seller to make arrangements for the transfer or buyout procedure in a timely manner in order to help avoid closing delays.

*Source: https://www.pewresearch.org/science/2022/03/01/americans-largely-favor-u-s-taking-steps-to-become-carbon-neutral-by-2050

This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice.  You are encouraged to consult your legal, tax or investment professional for specific advice.

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Bobbi Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

Bobbi is not an employee of Anywhere Integrated Services or affiliated with its title companies.