BSolar-powered homes are becoming increasingly popular—and for good reason. Solar panels can help lower monthly utility bills, increase energy efficiency, and make a home more attractive to today’s buyers. But if you’re buying or selling a home with solar panels, it’s important to understand how they’re financed because they can affect the closing process.
The good news? With a little planning and the right team by your side, a solar-powered home sale can be just as smooth as any other.
First, Know How the Solar Panels Are Financed
Not all solar panel systems are owned outright. Some are financed through loans, while others are leased or covered by a Power Purchase Agreement (PPA). Knowing which type of agreement applies to your home is one of the first steps in preparing for a successful closing.
Here are a few common scenarios:
- The seller pays off the remaining solar loan using proceeds from the sale.
- The remaining loan balance is factored into the home’s sales price.
- The buyer assumes the existing solar loan if the solar lender allows the transfer and the buyer qualifies.
- Leased systems or Power Purchase Agreements usually require approval from the solar company before they can be transferred to a new owner. If a transfer isn’t possible, the seller may need to buy out the remaining contract.
Why It Matters
Solar agreements sometimes include documents that affect the property’s title. That’s why your title company will review any solar-related paperwork early in the process to determine whether additional steps are needed before closing.
If questions arise, identifying them early gives everyone involved time to find solutions—helping avoid unexpected delays when you’re ready to close.
In certain situations, your lender and title company may also discuss an option called ALTA Endorsement 50, which may provide additional protection for certain solar financing arrangements. While it isn’t needed for every transaction, experienced professionals can determine whether it’s appropriate based on your specific circumstances.
How You Can Help Keep Your Closing on Schedule
Whether you’re buying or selling, a few simple steps can make the process easier:
- Tell your Realtor if the home has solar panels.
- Gather any solar loan, lease, or agreement documents early.
- Share those documents with your lender and title company as soon as possible.
- Ask questions if you’re unsure how the solar system is financed.
Being proactive can save time, reduce stress, and help prevent last-minute surprises.
Your Trusted Partners Every Step of the Way
Buying or selling a home is one of life’s biggest financial decisions, and every detail matters—including solar panels.
At Kotner Title and Legence Bank, we are committed to making the process as smooth and stress-free as possible. Our experienced teams work together to identify potential issues early, answer your questions, and guide you through every step of the transaction so you can move into your next chapter with confidence.
With the right preparation and trusted professionals on your side, your solar-powered home can shine from listing to closing.
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