The Solar Panels That Left My Seller in the Dark

By Kelly DeBrosse | eXp Realty | 23+ years serving Raleigh, Wake & surrounding counties

You couldn’t see them from the street. In fact, unless you happened to walk around the back of an old detached garage, you probably wouldn’t have known they were there at all. The property had a larger lot with several buildings, and the solar panels were mounted on the back side of the garage, facing away from the house.

The home was listed by an agent working under my supervision, and it had already gone under contract when the solar panels became an issue. That’s when I got the call.

The seller had invested more than $30,000 in a solar system and understood that when the house sold, the next buyer could simply take over the payments. Unfortunately, the buyer wasn’t interested in doing that, and we suddenly had a financial obligation standing in the way of a transaction that was already underway.

By the time I became involved, we weren’t discussing whether solar panels were a good investment. We were trying to figure out how to get a home sold when the seller had an expensive obligation they hadn’t expected to resolve.

Eventually, the panels were removed from the detached garage, and the seller sold them separately in an effort to recover some of the money. I believe they received somewhere around $2,000 to $3,000 for equipment that had originally cost more than $30,000. That doesn’t account for whatever electricity savings they may have received while using the system, but it certainly wasn’t the resale value they had been led to expect.

I’ve now been involved with three sellers dealing with financed solar panels from three different companies, and their experiences have been remarkably similar. Each believed they were making a valuable improvement to their home. Each understood that when they eventually sold, the next buyer would be able to take over the payments. And in all three situations, the buyers had no interest in assuming those obligations.

What bothers me most is that these haven’t been people who were careless or didn’t bother asking questions. They’ve been kind, trusting homeowners who believed they were dealing with professionals giving them accurate information. One of them was particularly thorough about understanding the arrangement before making the purchase. They asked questions, considered what they were told and believed they were making a responsible financial decision.

The problem was what they weren’t told.

I have a real issue with watching good people get taken advantage of, and I’ve found myself becoming increasingly frustrated with the way some expensive home improvements are sold. I’m not opposed to solar energy. I’m opposed to homeowners being encouraged to make financial commitments without a clear understanding of the total cost, what they’re actually purchasing and what happens to that obligation when they decide to sell.

There is a big difference between what something costs and what it adds to the value of your home.

You can spend $30,000 installing solar panels, but that doesn’t mean a buyer is going to pay $30,000 more for your house because they’re there. In the transactions I’ve handled, buyers haven’t been willing to assign anything close to the original installation cost to those systems. And when a property is being appraised, the additional value attributed to solar may be considerably less than what the homeowner paid, depending on the system, ownership arrangement and comparable sales.

We’ve seen something similar with swimming pools over the years. There was a time when homeowners could spend a substantial amount installing a pool and receive very little of that investment back when they sold. That has changed in many parts of our market as buyer preferences have evolved. Maybe solar will eventually follow a similar path, but I can’t advise someone to spend $30,000 today based on what buyers might be willing to pay for it years from now.

There is also a distinction between buying a solar system to reduce your electricity bill and buying one because you believe you’re adding value to your property. Those are two completely different financial calculations, and I think too often they’re presented to consumers as though they’re interchangeable.

I wanted to understand the economics for myself, so I had a solar company come out to my own home and prepare an estimate. This wasn’t a company I was suspicious of. It was a company I know and trust and would feel comfortable recommending.

The estimate came back at $60,000.

And even at that price, the system wasn’t going to generate enough electricity to cover my home’s usage. I understand that a system doesn’t have to eliminate an electric bill entirely to provide some benefit, but when I looked at what I would be spending and what I could reasonably expect to save, the numbers simply didn’t make sense for my house.

That experience was important to me because it wasn’t about a questionable company or an inflated sales pitch. It was a real estimate from people I trusted, and the financial return still wasn’t there for my circumstances.

Now consider what happens when that same expensive system is sold through a monthly payment arrangement.

The conversation can become focused on what the homeowner will pay each month rather than what the equipment will cost over the entire term, what financing charges are involved, whether they actually own the system and what happens if they sell before the obligation is paid.

I’m seeing similar concerns with monthly HVAC equipment and service arrangements. A homeowner may believe they’re making an affordable improvement or saving money by avoiding a large upfront expense, without fully understanding what they’ll pay over time or whether the arrangement will have any meaningful benefit to the home’s resale value.

A manageable monthly payment doesn’t automatically make something a good financial investment.

And it certainly doesn’t mean the next buyer is going to want to take over that payment.

Depending on how a solar system is financed, leased or otherwise contracted, there may be liens, recorded financing notices, transfer requirements or payoff obligations that have to be addressed when the property is sold. Those arrangements aren’t all the same, which is exactly why understanding the paperwork matters so much.

The homeowner may believe the system will simply transfer with the house, only to discover that the buyer doesn’t want it, the lender or solar company has conditions that must be satisfied, or the obligation has to be resolved before closing.

And then there’s the cost of removing the equipment.

Taking solar panels off a house isn’t necessarily as simple as hiring someone to take them off the roof. Depending on the installation, there may be electrical work, specialized removal labor, equipment that needs to be disconnected and repairs to the surfaces where the system was mounted. Those expenses can come on top of whatever is still owed.

The timing of when homeowners discover these problems is another part that really bothers me.

By the time someone calls me to sell their house, the salesperson who originally explained the arrangement may be long gone. The equipment has been installed, the contract has been in place for years and the homeowner has been making payments believing they made a good decision.

Then we begin preparing the house for sale, or worse, we’re already under contract, and suddenly we’re trying to understand an obligation nobody expected to become a problem.

At that point, the homeowner may have very limited practical options. There may be legal remedies or ways to challenge what they were told, depending on the circumstances, but that doesn’t necessarily help when there’s a buyer waiting and a closing date approaching. We still have to figure out how to get the house sold.

That’s a terrible time to discover that something you believed was an asset may actually be complicating the sale.

And the emotional part of this can be just as difficult as the financial part. Nobody wants to accept that they may have made an expensive decision based on information that wasn’t complete or accurate. They may have spent years making payments, believing they were building value in their property, and now they’re being asked to absorb a loss they never anticipated.

I’ve had to have conversations with sellers about separating the original decision from the decision we need to make today.

Whatever happened when they purchased the equipment has already happened. We can’t go back and change the information they were given or the agreement they signed. What we can do is look at the obligations that remain, understand the options available and determine which path allows them to move forward with the least additional financial damage.

Sometimes that means paying off an obligation. Sometimes it means negotiating with the buyer or the financing company. Sometimes it means removing the equipment. Every situation depends on the actual agreement and what the parties are willing and able to do.

But I don’t want someone remaining trapped in a home they need to sell simply because they’re trying to recover money that may no longer be recoverable.

And that brings me back to what frustrates me most about these situations.

Three different sellers. Three different companies. Homeowners who believed they were making sensible decisions and who didn’t understand the full implications until years later.

I’m not suggesting that every solar company operates this way or that every solar installation is a poor investment. I’m saying that in the transactions I’ve personally handled, there has been an enormous difference between what homeowners believed they were purchasing and what those arrangements actually meant when they went to sell.

I think consumers deserve better than that.

If you’re considering solar panels, an HVAC subscription or any other substantial improvement being sold through a monthly payment arrangement, I would encourage you to look well beyond the monthly number. Find out the total cost over the life of the agreement, whether you’re purchasing or leasing the equipment, what happens if you sell, whether a future buyer can assume the obligation and what it would cost to pay off or terminate the arrangement.

Get those answers in writing, and if you’re unsure what the agreement means for your property, have someone qualified to review it before you sign.

I would much rather have a homeowner call me before making one of these decisions and spend a little time talking through the potential resale implications than sit across from them years later trying to figure out how to undo something that has already cost them thousands of dollars.

I can’t tell you whether solar panels will make financial sense for your particular home. That depends on a lot of things, including the cost of the system, your energy usage, available incentives, financing and how long you plan to stay.

But I can tell you what I’ve seen happen when homeowners were led to believe those panels would add substantial resale value and that the next buyer would simply take over the payments.

Three times now, that hasn’t been the outcome.

And each time, it was the homeowner who was left dealing with the consequences.