If you are thinking of adding solar panels to your house, you may have questions about how you’ll sell your house with a solar loan or Power Purchase Agreement (PPA). Will your outstanding solar loan somehow get rolled into the house sale? How will you deal with your 25-year PPA if you need to sell your house at year five? Will you even be allowed to sell your house if you get solar panels?
Many of our Gold Country customers in Angels Camp, San Andreas, Mountain Ranch, Sonora, Copperopolis, Murphys and the greater Calaveras, Stanislas, Amador, Tuolumne, Alpine County and Sierra Foothills region approach us with questions about solar as well as battery backup options for their homes. This has been especially critical to consider in 2020 due to the huge rush of new buyers moving to the country from the city because of the Covid Quarantine. People want houses with built in solar – especially if it was installed (or has been updated) within the past 10 years and they love when it includes backup batteries or generators to help reduce the impact of power outages.
The short answer is simple: You can absolutely sell your house after installing solar panels, regardless of the financing solution you choose. In fact, you will likely find that your solar power system leads to a quicker sale at a higher price. But the specific method by which you’ll transfer ownership of the system to the new buyer depends on how you paid for your solar panels in the first place. Here’s a helpful overview of how it works for each situation:
Selling Your House With Fully-Owned Solar Panels: Just Sell the House
If you own your solar panel system outright, just sell the house. The buyer will pay a premium for your solar-equipped house, essentially paying you back for the money you spent when you installed it. Easy peasy.
Selling your house with financed solar panels: sell the house to pay off the loan
If you have an outstanding loan on your system, you’ll need to pay off the loan when you sell your house. This won’t be a problem though, since you’ll be selling the house for a proportionately higher price. And in exchange for paying that higher price, the buyer will then own the system outright.
Selling Your House With a PPA: 2 Options
This is where it can get a little more complicated. If you have a solar lease or a PPA on your solar power system, you are not actually the owner of that system, which means you won’t be able to transfer ownership to the buyer. But there are still two viable options for you:
Option 1: Buy Out the Agreement
Depending on the terms set out when you initiated your solar PPA, you may have the option to buy out the agreement and sell the system as part of the house, just as if you had a traditional loan.
Option 2: Transfer the PPA to the Buyer
Transferring your PPA to the buyer is surprisingly easy to do, and most homebuyers will happily consider this option. Remember: your solar power system is a valuable addition to your property, and buyers today would rather take over your PPA than pay an ever-increasing utility bill. The new buyer will need to obtain credit approval, but this is rarely an issue for a mortgage-approved buyer.
For more info, watch this helpful video we made with a local Angels Camp realtor.
Seek advice custom-tailored to your needs
Whether you’re considering a solar installation for the first time, or you’re wondering how to go about selling your solar-equipped house, it always helps to get advice from a pro. Contact us today and let us help you make the best decision for your unique situation.