10 Steps to Buy a Solar System From a Lease Company

The idea of purchasing a solar system from a lease company may seem daunting– but we’re here to make the process easier for you! Below is a step-by-step process of how a home buyer can escape a solar lease by converting it to an owned solar system. 

If the seller or buyer's agent or homeowner or home buyer would like help going through this process without having to worry about all the legwork involved, they can contact Spark at SparkGreenHomes.com for assistance in escaping solar leases. 

1. Obtain a Green Home Report

This is a comprehensive report for solar homeowners that provides all necessary details to be able to easily and effectively convey all the information to transfer your solar system to the incoming buyer. This simplifies the transaction for all parties involved including the home buyer, real estate agents, mortgage broker, appraiser and solar company.

1. Contact Solar Lease Company
   ​​Notify them you're selling the home. Request a copy of the lease agreement and any related documentation they can provide you in selling the home. You’ll also want to request a system purchase price, in case the buyer wants to buy the system.
   
   

2. Gather Necessary Documents
   These include the Solar Lease Contract and Solar Warranties from the Solar Lease Company (equipment warranties, workmanship warranties, etc.). You’ll also want to grab the following, if applicable: Solar Equipment Specifications, Net Metering Agreement, and the Solar Monitoring Access Transfer.
   
   

3. List Home as a “Solar Home”
   Include the Green Home Report as part of the listing to show buyers value to incoming buyers. The buyer's value is the amount saved from going solar. You’ll also want to sign Solar Real Estate Disclosure Forms, where applicable. If your state has MLS paperwork disclosing a solar system, include that in the home listing as well.
   
   

4. Give the Green Home Report to the Home Buyer for the Home Appraiser 

Since the system will be purchased with the home, it will add the value to the home and a solar savvy appraiser can add it to the value in order for the home to be purchased for a higher price than without the solar.

1. Give the Green Home Report to the Mortgage Broker
   The seller’s asset value is the amount that the home will increase in value in the transaction. The asset valuation method is the correct way to determine the asset value of a solar system as outlined in the case study by the Lawrence Berkeley National Laboratory study. It was conducted in conjunction with leadership from the National Appraisal Institute. This study outlines how much solar adds to the value of a home when selling the home.

1. Notify Solar Lease Company of Impending Home Sale/Solar System Purchase
   Notify them of the desired closing date and the buyer’s intention to purchase the solar system. Request a system purchase amount as well as the removal of the UCC fixture filing as part of solar system purchase. This typically has a fee and is paid by the home seller.
   
   

2. Accept Solar Purchase Amount or Place Counter Offer
   Notify the solar lease company of acceptance of purchase price. Place a counter offer if the solar lease company purchase price differs from that of the asset value on the Green Home Report by more than 10-15%.
   
   

3. Coordinate Removal of UCC fixture filing for close of escrow.
   The home buyer will need to contact the solar lease company to pay for and have the UCC filing lifted so the home may pass from buyer to seller unencumbered. The fee is usually under $500 and paid for by the home seller.
   
   

4. Close of Escrow and Sale/Purchase of Solar Home
   When the home sale is finalized, no UCC will need to be refiled since the solar system is owned by the homeowner.

In addition to these 10 steps, as a home buyer you'll need to contact the local utility company to turn on the electricity and transfer the net meter agreement. You’ll most likely want the net metering agreement that the home seller had with the utility company to be transferred into their name since it will grandfather a buy-back price rate or price for the electricity that is most likely higher than what is currently available. 

Most solar lease companies will monitor the solar system on your home on your behalf. Since you are being billed for that electricity, it's recommended and generally a best practice to obtain the login information and download the monitoring app. This allows you to see how well your system is producing and let you know if there are any issues with it. 

And that’s how you buy a solar system from a lease company! Remember, solar panels can also be cleaned professionally, or most homeowners can clean the panels themselves safely from the ground with a Solar Panel Cleaning System found at  SolarCleaningSystem.com.