07/16/2026
Selling With Solar
I've been hearing more homeowners tell me they've been told that solar panels will increase their home's value. Before deciding to purchase panels, it's
important to understand that solar is more nuanced.
If you want solar for lower utility bills, greater energy independence, or to reduce your environmental impact, it can be a fantastic investment. Just don't assume it will automatically add value when it's time to sell.
Buyers aren't just evaluating your home. They're also evaluating any financial obligations that come with it. The best way to ensure solar doesn't negatively affect your sale is to understand your solar agreement before you list your home, gather all of the relevant documentation upfront, and provide it to buyers. The more transparent you are, the smoother the transaction is likely to be.
Let's take a brief look at the three most common types of solar agreements and how each one can affect the sale of your home.
Owned Panels
How it works:
You own the panels and receive all of the electricity they produce. You are also responsible for their maintenance. Many homeowners finance their solar system with a loan secured by the panels.
How it affects your sale:
If there is still a solar loan in place, most Conventional, FHA, VA, Fannie Mae, and Freddie Mac financing generally requires that it be paid off before closing because the lien cannot remain ahead of the new mortgage. As a result, many buyers expect the seller to pay off the solar loan before the sale is completed.
Leased Panels
How it works:
The solar company owns the panels, and you make monthly lease payments to use them. Think of it as similar to leasing a vehicle.
How it affects your sale:
Because you don’t own the panels, they generally are not considered part of the home’s value during the appraisal process. A buyer must be willing to assume the lease if permitted by the solar company, or in some cases the seller may choose to buy out the remaining lease. This is not to be confused with paying for owned solar panels. If the seller pays off the lease, they will still go back to the solar company at the end of the lease.
Power Purchase Agreements (PPAs)
How it works:
With a PPA, you don’t own the panels. Instead, you agree to purchase the electricity they generate at a predetermined price per kilowatt-hour, usually with scheduled annual increases. Those increases are often designed to be lower than the historical increase in utility rates.
How it affects your sale:
A PPA is an energy contract, not ownership of the solar system. Like a lease, a buyer must understand and agree to the contract terms. Before signing a PPA, read the agreement carefully so you understand future pricing and annual escalations.
Solar can absolutely be a great investment in your lifestyle. Just don’t make the decision solely on its ability to increase your home’s value.
Understanding the agreement before you sign can save you a lot of surprises later.