November 9, 2023

The Homebuyer's Guide to Buying a Home With Solar Panels

Buying a home in the Bay Area with a solar system already installed seems like an easy choice because it can provide long-term savings on your electrical bills without the high initial investment. But, not all solar systems are of equal quality, and it is possible that the solar system may be under a lease agreement or not fully paid for. Before you agree to a sales price or go through with the closing on a home, it's crucial to consider a few important factors.

Are the Solar Panels Owned, Financed, or Leased?

Solar systems can be financed in several ways. Make sure you know the nature of the financing and the disposition of the loan before agreeing to buy the home. Here are the most common ways a solar system is acquired:

  • Cash or a fully paid loan: If the system was purchased with cash or a solar loan that has been completely paid off, then full ownership of the solar system will be transferred when the house is bought.
  • Solar loan: If the solar system was purchased with a loan, and that loan has not been paid off, the seller may transfer ownership of the system to you and pay off the remainder of the loan. Then the system is yours, free and clear. Alternatively, you may assume the remaining payments for the loan, which you should do only if the solar system is in good condition and worth the cost.
  • PACE financing: With this program, homeowners can finance home improvements like a solar system and repay the loan through higher property taxes each year. This loan functions like a tax lien and will transfer to you as the new buyer.
  • Solar leases: If you buy a home with a leased solar system, you will not own the panels, and you will be responsible for making any remaining payments in the original contract. However, the lease company is responsible for any maintenance until the end of the contract.
  • Power purchase agreement: In a power purchase agreement, a company will install, service, and maintain a solar system on the property, selling power to the homeowner at a set rate, which will be lower than a lease agreement. As the new buyer, you will not own the panels, and you will be responsible for fulfilling the terms of the contract.

Some mortgage lenders will not finance a home that has an outstanding solar loan, a solar lease, or a tax lien for a solar system.

What Type of Solar System Is Installed?

Most solar systems in the San Francisco Bay area will be grid-tied, meaning they rely on the utility grid for energy storage and syncing. This also means that when power goes out on the utility grid, you will likely lose power in your home unless enough solar batteries are added for emergency power.

Some solar systems may be off-grid, which means they are not connected to the utility grid at all. They will incorporate a battery system to store power for use at night, and if there are not enough batteries or they are in poor condition, you may lose power overnight. Have a full inspection done before buying a home with an off-grid solar system, as it relies on battery storage and may not have been installed using the proper permitting and techniques.

How Old Are the Solar Panels?

Solar panels, inverters, and solar batteries have a limited service life. Most manufacturers warranty solar panels for 20 to 25 years, with a set production level of 80% to 90% of rated output remaining at the end of the warranty period. High-end inverters may have a similar warranty of 20 to 25 years, while battery warranties can range from five to 15 years, depending on the manufacturer. Learn which brands of equipment were used in the system, how much of the warranty remains, the warranty terms, and whether that warranty is transferrable to you as the new buyer. If the solar system is more than a decade old or is nearing the end of its warranty period, you should negotiate a lower purchase price for the home so that you can upgrade the solar system later.

What Is the Size of the Solar System?

When installed, solar systems are built to meet certain output requirements. The original owner may have wanted the solar system to cover all the electrical demands of the home or just a portion, and depending on the appliances, tools, and electronics you intend to use, you may exceed the original design goals of the system. Learn what the system is capable of producing to determine if it will meet your requirements or if you may need to upgrade or replace the solar system in the future.

Solar Installations in the San Francisco Bay Area

When you need to install a new solar system in the Bay Area, or you are upgrading an older system on a home you have just purchased, talk to our team at Simply Solar. We can design and install a solar system that is tailored to meet your needs, and all our new solar installations include a full 25-year workmanship warranty. We feature experienced, in-house technicians, not subcontractors, and we have over 20 years of experience installing solar in the Bay Area, Fresno, Napa Valley, and Sonoma Valley.

Call (707) 285-7037 today to request your FREE solar estimate anywhere in the Bay Area or Fresno.

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Why choose Simply Solar when there are so many commercial solar companies vying for your business?
  • Experience: With over 20 years in the industry, we have what it takes to build a solar system that will exceed your expectations.
  • Products and Partners: With industry-leading products, which we choose for their durability and outstanding performance, you can be sure that your solar panel system will last for many decades.
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