Solar Panels: What Clients Should Know

Q: A buyer I’m working with is considering making an offer on a property that includes solar panels on the roof. I’m not familiar with solar panel systems. How should I guide my buyer?

A: For buyers, it’s important to look beyond the panels on the roof and consider the entire system, including all components. The financial arrangement tied to the system will also matter. It could be owned outright, leased, financed, or subject to a power purchase agreement, and each arrangement comes with its own obligations, such as monthly payments, maintenance requirements, or transfer fees.

If the system is not owned outright, the third-party provider may require the buyer to qualify to assume the existing agreement, and that process can impact the buyer’s mortgage financing.

We recommend that you start by reviewing OREF 116 – Advisory Regarding Solar Panels, which OREF recently released, with your buyer. This Advisory is designed to provide buyers and sellers with clear, detailed information about what to expect from solar panel systems, and it also serves as a valuable educational resource for agents unfamiliar with Solar Panel Systems. Then review OREF 105 – Solar Panel System Addendum. This form requires the buyer to attach the addendum to their offer, rather than the seller providing it later. This will require the buyer’s agent to gather information about the system from the seller’s agent in advance. The addendum provides a wealth of information and guidance about solar panel systems.

All comments and responses from OREF or its staff, managers, and volunteers are non-legal opinions made for general purposes. Each Forms subscriber must rely solely upon their Principal broker or personal legal counsel for specific advice and instruction. You and your client should independently confirm that the Form(s) you use are legally suitable for the purposes intended and that they are current with respect to all laws and regulations.