Solar Panels & Real Estate

1. Types of Systems Owned Seller owns the system outright No payments Typically, no liens Transfers with the property Impact:Buyers and lenders are comfortable. May add value, though appraisers are conservative. Financed Seller has a loan on the system Panels are collateral Usually includes a UCC filing Impact:Requires handling at closing. Can be resolved, address early. Leased / Power Purchase Agreement (PPA) Seller does not own the system Monthly payment to solar company Buyer must assume lease or seller must buy it out Impact:Requires buyer qualification and approval by solar company. 2. UCC Filing (Uniform Commercial Code) A UCC-1 Financing Statement is filed by the solar lender to secure their interest in the system. Like a lien (but not a mortgage) Shows up during title search Must be addressed before or at closing Impact:Lenders want priority. If not handled, it can delay or stop funding. 3. Superior Lien Mortgage lenders require first lien position. If a solar company has priority: It can conflict with the mortgage Lenders may refuse to fund Solution: Subordination agreement, or Payoff of the UCC   4. Payoff at Closing Most common Process: Order payoff from solar lender Pay through escrow File UCC termination   5. Lease Transfer vs Buyout Lease Transfer Buyer applies with solar company Must qualify Must accept terms Risk: If buyer is not approved, the transaction can fail. Buyout Seller pays off lease System becomes owned Transfers cleanly Negotiate seller payoff whenever possible. 6. Agent Responsibilities Is the system owned, financed, or leased? Who is the solar provider? Is there a UCC filing? What is the payoff amount?   Collect documentation: Solar agreement Loan or lease terms UCC information Utility history   Red flags: Seller unsure of details Missing documentation No clear financial benefit   Listing Strategy 1. Control the Narrative Instead of: “Home has solar panels” Use: “Energy-efficient home with reduced monthly utility costs” 2. Strategy by System Type Position as a premium feature: No payments Reduced utility costs Long-term savings   Include: Average monthly electric bill Annual savings Financed Solar A: Seller Pays Off Market as owned Cleanest transaction B: Buyer Assumes Loan Only workable if: Payment is low Total cost is competitive with standard utilities Leased Solar Include: Lease payment Utility history Net savings 3. Solar Information Sheet Include: System type Monthly payment Average electric bill Estimated savings Payoff amount Solar company contact 4. Pricing Strategy Owned May support slight value increase Do not overprice Financed or Leased Do not increase price based on solar Buyers do not pay extra for an obligation 5. Pre-Listing Preparation Before going live: Contact solar company Confirm payoff Verify UCC status Understand transfer requirements 6. Marketing Language Energy-efficient home Reduced utility costs Smart energy living MLS Remarks Owned Solar Energy-efficient living at its best. This home features a fully owned solar system with no added payments, providing immediate and long-term savings on utility costs. A smart investment for both efficiency and value. Financed Solar (Seller Paying Off) Enjoy the benefits of solar without the hassle. Seller will pay off the solar system at closing, allowing the new owner to take advantage of energy savings with no added payments. Financed Solar (Buyer Assumes Loan) This home includes an energy-efficient solar system with a low monthly payment designed to offset utility costs. Enjoy predictable energy expenses year-round. Full solar details available for review. Leased Solar Energy-conscious home with solar system in place to help reduce utility costs. Buyer to assume existing solar agreement subject to provider approval. Detailed system and utility information available. “What if there’s a lien?” Response: If there is financing, it is handled during closing just like any other payoff. The goal is to ensure everything is cleared so you are not taking on any issues. “I don’t want to assume a lease” Response: That is something we can negotiate. In many cases, the seller can buy it out or we can structure the deal in a way that makes financial sense for you. “Is this actually saving money?” Response: That is the right question to ask. We have the actual utility history and solar costs so you can review the real numbers and make an informed decision. “This seems complicated” Response: It only feels that way because it is often not explained well. Once it is broken down, it is very straightforward and we will guide you through each step. Contract & Escrow Considerations Order solar payoff as early as possible Confirm timing for UCC termination filing Ensure title company is aware of solar lien or UCC Add contingency for lease assumption approval when applicable Verify lender requirements on payoff vs subordination Key Risk Areas: Delays in payoff processing UCC not released before closing Buyer not approved for lease assumption 8. Negotiation Strategies Request seller payoff for financed or leased systems Use solar terms as leverage for price reductions or credits Offset lease assumption with seller concessions Position payoff to attract more buyers and simplify the sale 9. Appraisal Considerations Owned solar may contribute value, but not always at full cost Appraisers rely on comparable sales with solar Financed or leased systems typically add little or no value Utility savings may support a feeling of value, but do not guarantee appraisal increases 10. Seller Solar Checklist Before listing, obtain: Solar agreement Loan or lease details Current payoff amount 12 months of electric bills Warranty documentation Solar company contact information Florida Key Points: Solar systems are either owned, financed, or leased Financed systems often have a UCC filing that must be cleared at closing Lenders require first lien position, so solar loans may need payoff or subordination Leased systems require buyer approval or seller buyout Florida Advantage: Strong net metering policies Solar-friendly market Most transactions close smoothly when properly prepared Nationwide Key Points: Systems may be owned, financed, or leased Financed systems often include a UCC filing that must be addressed Mortgage lenders require first lien position Leased systems may require buyer qualification and approval Key Variables by Location: Net metering and utility savings State treatment of solar as real vs personal property Solar company transfer requirements Glossary Assumption: When a buyer takes over an existing solar loan or lease. Inverter: A device that converts solar energy into usable electricity for the home. Lease: A contract where the homeowner pays to use the solar system but does not own it. Net Metering: A utility billing system that credits homeowners for excess energy sent back to the grid. Payoff: The amount required to fully satisfy a solar loan or lease obligation. Power Purchase Agreement (PPA): A type of lease where the homeowner pays for the electricity produced rather than the system itself. Subordination Agreement: An agreement that allows a solar lender’s interest to be secondary to the mortgage lender. Superior Lien: A lien that has priority over others. Mortgage lenders require first position. UCC Filing: A legal filing that gives a lender a security interest in the solar system as collateral. UCC Termination: A filing that removes the lender’s claim once the solar system is paid off. *If you would like a copy of a seller handout or a listing presentation insert, send me an email. Your1styear@gmail.com.