Selling a Home Subject to a Solar Agreement

The solar industry continues to boom in the United States. Although supply chain gridlock led to a 16 percent drop in new solar installations in 2022, a recent uptick in domestic solar production, lower costs of solar panels and federal legislation supporting clean energy have led to projections that the solar industry will nearly triple in size by 2028.  

In the first quarter of 2023, the U.S. installed 6.1 gigawatts (GW) of solar capacity, the best first quarter in the industry’s history and enough to power over 4 million homes. Homeowners and builders alike are increasingly taking advantage of solar leases or power purchase agreements (PPAs) (i.e., “solar agreements”), in which customers essentially “lease” solar power from a third-party solar provider without the upfront cost of purchasing an entire system. Businesses can learn more about commercial power purchase agreements here.

5 Tips for Guiding Your Clients

Though half of all U.S. states are utilizing solar power, it is known to create unique challenges when selling a home. Some issues that sellers may experience include:

  • Buyers shying away from a house because of the solar agreement (due to issues like term, payment, maintenance considerations, technology obsolescence and more)
  • Buyers who may not meet the solar company’s qualifications
  • Potential issues involving the proper transfer of the solar agreement

If you’re working with a seller who currently owns a home with a solar agreement, you may be able to help them navigate potential complications with the sale. While every situation is different, here are a few steps to consider:

1. Start early. If you represent the seller, ask them early in the selling process whether the property is tied to a solar agreement. The terms for transferring a solar agreement may impact the marketability of a property, and disclosure to potential buyers is important.

2. Request a copy of the solar lease agreement. Ask your client for a copy of the current solar agreement. If they don’t have one, they should request it from their solar company.

3. Seek advice. Unfortunately, misconceptions about solar agreements are common. It’s important that buyers and sellers fully understand the terms of their solar agreement, including its transfer rights and requirements at the time of the sale. Many solar companies have dedicated representatives to assist with the lease transfer process, but you may wish to advise your client to consult with an attorney first.

4. Cover all your bases. When selling a home subject to a solar agreement, it helps to work with a trusted company like Old Republic Title. We can alert you to potential title problems prior to closing.

5. Keep lines of communication open. Early in the process, provide your closing team with as much information as possible about the transaction. What they don’t know could cause delays to the closing process.

If you would like to learn more about selling a home subject to a solar agreement, contact your Old Republic Title representative today!


The Old Republic Title Blog is not intended and should not be construed as legal advice. The information in this Blog is intended for general information and educational purposes only. Old Republic Title does not guarantee, and assumes no responsibility for, the accuracy, timeliness, correctness, or completeness of the information herein. Any conclusions readers draw from the information contained herein are their own and are not to be attributed to Old Republic Title. Always seek the advice of competent counsel with any questions you may have regarding title insurance or any other legal issue. The information on this Blog may not be quoted or referred to in any manner without the prior written consent of Old Republic Title, to be given or withheld at our discretion. To request reprint permission for any of our publications, please contact us. This website may contain hypertext links to information created and maintained by other entities. Old Republic Title does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside web sites.