Moving with Solar Leases
The number one problem facing solar homeowners trying to sell their homes are solar leases. There has been a large shift away from solar leasing in recent years.
In 2010 when the US solar market really caught its stride solar leasing became very popular and was the primary way of going solar. This has changed as the solar market has “grown up”.
Solar Installers have largely shifted in the last several years away from offering third party owned solar systems and now the majority of new solar installs are owned by homeowners and financed by solar lending companies.
Still even now though in 2021, 24% of all new solar installs in the US are going in as solar leases. There are Four Major Reasons Why homeowners would choose a leased solar system rather than a owned solar system but the majority of homeowners are now choosing to own their solar systems.
If you have a solar lease on your home then you're not alone. Many homeowners have sold their homes with solar leases on them. The real estate industry has not been happy with the solar industry though because this makes their job harder and can complicate the sale of a home. Solar Homeowners should always use a real estate pro that knows solar. The last thing that they want to do is sell their home and lose money or equity because they decided going green was the right choice for them.
Using a Spark Pro Solar Certified Real Estate Agent is the best way to ensure you have a great home buying or home selling experience. They are trained and certified to know how to help buyers and sellers go through real estate transactions that involve solar. Spark is a company that simplifies Solar Home Transactions.
Best Practices for Selling a Leased Solar Home
1. Use a Spark Pro Real Estate Agent
The number one way generational wealth is passed from one generation to the next is through wealth gained in property ownership. This is why 90% of homeowners use real estate agents to buy and sell homes. While they keep a portion of the proceeds of the sale the value they bring to the transaction far exceeds what they take away from it.
A solar trained and Spark backed real estate agent is the best way to ensure that as the millions of solar homes in America change hands that the value is not lost. Home buyers and their agents have devalued many homes because they don't like the solar lease attached to it. A Spark Pro can help ensure that doesn't happen. Remember that in any negotiation knowledge is power.
You wouldn't send a teenager to buy a used car for you if you could send a mechanic. Using a Spark Pro is the best way to retain the equity in your Solar Home.
2. Put the solar lease company on notice
Home buyers have options when you sell them your leased solar home. Notifying the leasing company that you are selling your home is the best way for them to be able to exercise those options.
Option #1 Transfer the Solar Lease into the home buyers name
In this option when you sell the home you're not selling the solar system. The solar system is owned by the leasing company and notifying them ahead of time helps to get any paperwork in order that will help expedite the transfer process.
There are over 13 steps to transfer a solar lease from seller to buyer and they are covered in the books Buying Solar Homes and the much abbreviated version Escape Solar Leases by Cory Vanderpool the founder of Spark.
Option #2 Buyer buy the solar system from the leasing company
Solar Leases have a clause in the contract that the solar system may be purchased from them at certain milestones in the contract. The sale of the home is one of those milestones.
This is a more complicated process than just passing the lease from one owner to the next but like all things in life, if its easy it may not be worth doing. The far less expensive option over time is always going to be to convert that lease to an owned solar system. The monthly payment adding it into the mortgage typically will be lower than the monthly lease payment. This is especially true for solar leases with escalating payments.
Like assuming a solar lease, there is a 15 step process to buy a solar system from a solar lease company. Those are also covered in the two books by Cory Vanderpool, Buying Solar Homes or Escape Solar Leases.
3. Disclose, disclose disclose
Like any part of the real estate transaction transparency and being forthwith is the best way to have smooth and happy transactions. Fear of the solar lease and hiding it or not disclosing it like any part of a real estate transaction can and has lead to canceled contracts or even worse lawsuits.
Be honest about the lease. Now that you know what to do with it, you don't have to be afraid of it and the knowledge and confidence that accompanies that knowledge should give you and your real estate agent the ability to sell your solar leased home with confidence.