What Home Buyers Should Know About Buying a House With Solar Panels

Jun 16, 2023Buying Basics, Homebuying Process, Real Estate Tips


As more homeowners look for ways to protect the environment from fossil fuels and their money from rising energy costs, more home-buying consumers will decide whether to buy a house with solar panels installed.

As an industry, solar’s future is bright. While California has traditionally dominated the U.S. solar market, other markets continue expanding rapidly. Texas, Florida, and New York saw significant growth in 2022, according to a report by the Solar Energy Industries Association. In addition, half of U.S. states now have installed one gigawatt or more of solar power, compared to only three a decade ago.

While solar panels can protect the planet and your wallet, home buyers must be well-informed about solar-powered homes, both the benefits and potential challenges.

Before you jump on the solar bandwagon, here are the must-know details about purchasing a solar-powered home.

Solar Savings

Buying a home with solar panels can materially reduce or possibly eliminate monthly electricity bills, providing energy cost savings for many years. Before making an offer, home buyers should seek information about the system’s age, efficiency, and overall condition to determine how the solar panel system might add value to the property. Buyers should also consider and ask questions about energy generation. Understanding the system’s capacity is essential. Home buyers should evaluate the solar panel system’s size, power output, and efficiency and consider factors such as the orientation and angle of the panels on the roof or other locations, any shading issues, and local weather patterns that might negatively impact performance. Home buyers should also learn about “net metering.” You should consult a tax professional to see whether you might benefit from tax credits or rebates.

Environmental Impact

Solar power is a clean, renewable source of energy. Solar panels combat climate change, reducing carbon emissions and reliance on fossil fuels. Familiarize yourself with the environmental benefits of solar power and understand how your potential home’s solar panel system will help the planet and align with your personal sustainability goals. Combining solar panels with purchasing an electric vehicle might energize your savings and reduce your carbon footprint. Conversing with a solar panel installer before making an offer on a home with solar panels could provide information you might not have thought about.

Are the Solar Panels Owned or Leased?

It is essential for homebuyers to ascertain the ownership status of solar panels, whether they are owned outright or leased from a third party. If leased, it is crucial to thoroughly examine the lease terms, duration, and any potential restrictions or future obligations. To gain insight into the homeowner’s savings, requesting one year of electricity bills is recommended. Considering how the leasing arrangement might impact the ability to sell the home and transfer the lease to a new owner is essential. Additionally, it is advisable to inquire about the existence of a warranty and whether the leasing company is responsible for maintenance. Another consideration is whether the seller can pay the lease in full at closing. Home buyers should consult with a loan officer to determine if assuming a lease would affect their ability to secure a home loan.

What is a Solar Panel Power Purchase Agreement?

A solar panel power purchase agreement (PPA) is an agreement between a solar energy company and a customer in which the company installs and owns the solar panels on the customer’s property. Subsequently, the company sells the electricity generated by the panels to the customer at a predetermined fixed rate for a specified duration. This arrangement eliminates the need for the homeowner to bear any upfront costs for the solar panels and allows them to enjoy savings on their electricity bill. While a PPA presents a relatively low-risk investment, it’s important to note that the homeowner does not own the solar panels. Moreover, entering into a long-term contract may be a requirement, and the electricity rate might not be as low as initially you might think. If you are purchasing a home and assuming responsibility for a solar panel PPA, it is essential to comprehend the contract’s terms and seek legal counsel to review it.

Solar Panel Maintenance and Warranty

When purchasing a home that includes solar panels, buyers need to ask about the solar panels’ maintenance records and any related warranties. Take the time to learn about the system’s routine maintenance tasks and confirm if it has been adequately serviced and by whom. Make sure to acquaint yourself with the warranty terms, including its duration, implications, and any limitations on transferring it to new owners.

Insurance Considerations

Home buyers should contact their insurance provider to understand the implications of solar panels on their homeowner’s insurance policy. Is extra coverage needed or recommended? Homebuyers must know whether their homeowner’s policy covers panels against damage, theft, or other unforeseen events. Prospective home buyers should contact an insurance agent instead of their insurance company.

Value and Resale Value

Solar panels are highly sought-after in some real estate markets, as studies have demonstrated that homes with solar systems tend to sell quicker and at a higher price than those without. While solar panels can undoubtedly increase a home’s appeal and value, factors such as the local real estate market and the preferences of potential buyers influence the impact of solar panels on resale value. It’s worth noting that integrating solar panels into a home may present aesthetic obstacles that could impact a future sale, depending on its age and design. Seeking guidance from a knowledgeable buyer agent can provide valuable insights into the sales of nearby homes with installed solar panels.

Energy Independence

Solar panels can provide energy independence, especially during prolonged power outages or grid disruptions. Your solar system can potentially continue to generate and use electricity even when local power is down; however, solar panels rely on sunlight, so their efficiency may vary based on weather conditions and available sunlight. Cloudy days or shading from nearby structures or trees can impact their performance. Your region of the country plays a role.

By reviewing the factors above – savings; environmental impact; owned or leased panels; solar panel power purchase agreement; maintenance and warranty; insurance; resale value; and energy independence – prospective homebuyers can make informed decisions about purchasing a home with solar panels installed. Armed with facts, home buyers can benefit from savings and a reduced carbon footprint.


RICH ROSA co-founded BUYERS BROKERS ONLY, LLC, an EXCLUSIVE BUYER AGENT real estate brokerage helping home-buying consumers in Massachusetts, New Hampshire, and Rhode Island.


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