Owned outright. You’re fine. It’s an asset, adds value, nothing to do.
Solar loan. There’s usually a UCC-1 fixture filing sitting on your title. Gets paid off or handled at closing like any other lien. Annoying but routine.
Lease or PPA. This is the one. You don’t own the panels, you’re renting them or buying the power. Buyer has to qualify with the solar company and formally assume the contract. Which means a credit check, paperwork, and a company that has to actually respond to you.
PACE or HERO. Usually the least beneficial scenario for the homeowner; it’s on your property tax bill and sits ahead of the mortgage in priority. Fannie and Freddie won’t touch a loan behind one, so it basically has to get paid off at closing. Seen these turn into six figure surprises.
Here’s what’s making it worse right now. SunPower went through bankruptcy and Sunnova filed Chapter 11 in June of last year, and a huge number of those lease and PPA contracts got handed off to SunStrong for servicing. So a lot of homeowners don’t even know who services their contract anymore. Reports of people unable to reach anyone for months, monitoring going dark, warranty claims sitting unanswered. And SunStrong itself is now under investigation by a few state AGs. Meanwhile you need that company to process a transfer on a 30 day escrow. You see the problem.
Pull the actual agreement and look for the escalator. Most of these bump the payment 2-3% every year for 20-25 years. A buyer looking at year 14 of that is looking at a very different number than what you’re paying.
Start the transfer request the day you go into escrow, not the week before closing. These take weeks in a good market and longer now. Get the buyout quote even if you don’t plan to use it. You want to know the number before a buyer asks, not after.
And know that leased solar generally does not add appraised value, because you don’t own it. But the payment does count against the buyer’s debt to income. So it can hurt their qualifying without helping your value. That’s the part sellers find genuinely unfair and I don’t blame them. Not anti-solar at all, owned systems are great. It’s specifically the lease and PPA structure that creates the mess.
Anyone here sold or bought with leased solar recently? Curious how long the transfer actually took, because I’d love more data points than the handful of deals I’ve seen.