Selling, or buying, a home with orphaned solar
Selling a house with solar after the installer went bankrupt
A house with solar used to be a selling point. A house with solar from a company that no longer exists makes buyers, inspectors, lenders, and title companies nervous, and nervous people delay closings. Almost all of that nervousness comes from missing paperwork, not from the panels. This page is what to gather before you list, what to expect at closing, and what a buyer on the other side should ask for.
The four people who will ask questions
The buyer
Does it work? What does it save? Who fixes it if it breaks, now that the installer is gone?
The inspector
Was it permitted and inspected? Are the roof penetrations sound? Most home inspectors won't touch the electrical side and will say so in the report, which scares buyers.
The buyer's lender
Is there a loan or lease attached to the system, and does it stay with the house? A lender will not close over an unresolved solar lien.
The title company
Is there a UCC fixture filing on the property? If so, who releases it, and has that company been sold or renamed since the filing?
First, which of these do you have?
How the system was paid for decides most of what happens at closing. The installer's bankruptcy changed none of it, because the money side was always a separate company.
| You have | What it means at sale | Who you deal with |
|---|---|---|
| Paid cash, or loan paid off | The system conveys with the house like a furnace. Check that no old fixture filing is still on record from a paid-off loan; if one is, the former lender must file a release. | Nobody, unless a stale filing turns up in the title search |
| Solar loan, still paying | The loan is secured by a UCC-1 fixture filing against the property. Three normal outcomes: pay it off from proceeds and get a UCC-3 termination; the buyer assumes it, with the servicer's approval; or you keep paying after the sale, which some loans allow and few buyers like. | The current loan servicer. Not the original lender if the loan was sold, and many were. Your latest statement names them. |
| Lease | The buyer takes over the lease, and must qualify with the leasing company, or you buy it out. Start this the day you list; it is routinely the slowest item in a solar home sale. | The leasing company, or whoever bought its portfolio in bankruptcy |
| Power purchase agreement (PPA) | Same as a lease in practice: transfer to the buyer with approval, or buy out. | The PPA provider or its successor |
Before you list: the paperwork, in the order it takes longest
- Request the payoff letter or transfer approval now. Servicers take weeks, and lease transfers take longer. This is the item that stalls closings.
- Pull the permit record. Your city or county building department has the solar permit and its final inspection on file, usually online. If the installer never closed the permit, which happened, you'll want to know before the buyer's inspector does.
- Get a copy of the utility interconnection agreement. It's tied to your electric account, not the installer. The utility will provide it. In states with grandfathered net metering, this document is worth real money to the buyer, because the old rate terms transfer with the house for the rest of their term.
- Prove the system produces. Run the free check with the lifetime figure from the inverter. A dated production verdict answers the buyer's first question before they ask it.
- Get the monitoring under your own name, then transfer it. If the app died with the installer, the brand guides show how to get your own access. A system the buyer can see on their phone the day they move in is worth more than one they can't.
- Map the warranties to the serial numbers. Manufacturer warranties on panels, inverters, and batteries survived the bankruptcy and transfer with the house. Some manufacturers want a transfer form; most just need the new owner to register. Have the serials and terms written down.
- Have a roofer look at the mounts. The installer's roof-penetration warranty is gone. A roofer's note that the flashings are sound costs a service call and removes the inspector's favorite paragraph.
The Home Sale Packet puts all of this on one dated document. Your production verdict, the warranty map by serial number, the loan or lease and who services it, the fixture filing explained for the title company, the inspector's questions answered in advance, and a closing checklist. Build it in about ten minutes, save it as a PDF, hand it to your agent.
Build the Home Sale Packet, $39What to tell the buyer, in plain words
Buyers are not afraid of solar. They are afraid of a mystery, and "the company went out of business" sounds like a mystery. Replace it with three sentences: the panels are made by a company that still exists and warrants them for another so-many years; the system produced this many kilowatt-hours last year, here's the proof; and here is exactly what happens to the loan at closing. Most of the fear leaves the room.
If the buyer's inspector writes "unable to evaluate solar system," which is standard, the answer is a licensed solar contractor's inspection, a service call in most markets. Offer it before they ask. It is cheaper than a price reduction.
Buying a house with orphaned solar?
The same list, from the other side. Ask the seller for the production proof, the permit record, the interconnection agreement, the serials, and, above all, exactly what the loan or lease does at closing, in writing from the servicer. If the seller can't produce them, the Home Sale Packet is built from information you can gather at a showing: the inverter label, the panel count, the install date on the permit. And run the free check yourself; it takes the seller's lifetime number and a ZIP code.
One more thing a buyer should know. If the app on the wall is dead, it is not a sign the system is dead. It usually means the account was the installer's. The brand guides show how to take it over the week you move in.
What this page is not
It isn't legal advice, and the loan and lease mechanics vary by state and by contract. It's the checklist that keeps a solar house from stalling at closing, written by someone who has read too many closing horror stories in the owner groups. If your agent or title officer says something here is wrong for your state, they're probably right, and we'd like to hear it.