14 Questions to Ask Before Buying a Home with Solar Panels
Many homeowners have added solar photovoltaic (PV) panels to their property, especially in states that enjoy abundant sunshine and attractive incentives. As a result, it’s increasingly possible that you may have an opportunity to buy a home that includes a solar energy system.
For many buyers, the ability to generate your own power and trim your energy bills is highly appealing! However, it’s also essential to understand that solar panels are expensive systems that require special knowledge and occasional maintenance and repairs.
To ensure you’re learning everything you can about the home’s energy production features and any potential problems with the solar system, here are 14 questions to ask the seller before making an offer.
1. Do you lease or own your equipment?
If the system is leased, ask the seller to provide all related details, including monthly lease payments, down payment amount, a copy of the lease, contact details for the lessor, buy-out options, and assumption options.
2. If the system is owned, is there still an outstanding loan?
For a residential solar system to be fully considered in the property’s value—and to transfer the property to a new owner—the seller must pay off any outstanding loans at closing.
3. What is the size of the array?
Most residential systems are under 10 kilowatts (kW) of capacity. According to the Solar Energy Industries Association, the average size of a residential PV system in the U.S. is 5kW.
4. Do you have a permit for the panels?
Whether the installation was professional or a DIY project, ask the seller for a copy of the permit to ensure that the system meets any required building codes.
5. When did you install the system and inverter?
Over time, solar systems degrade and produce less electricity. While the life of the panels and inverter varies depending on the equipment used, the installation date provides a valuable benchmark for monitoring system performance.
6. Have you ever replaced the inverter or any panels?
Solar panels produce variable direct current (DC), which an inverter converts into alternating current (AC) for home use and transfer onto a commercial electrical grid. There are many types of inverters. Typically, inverters need to be replaced more frequently than solar panels.
7. Who manufactured and installed the panels and the inverter?
This information can be essential for maintaining your system or completing any future repairs.
8. What is your average yearly or monthly savings?
Knowing the system’s historical savings will make it easier to recognize any performance problems.
9. How much is your average energy bill?
You may use more or less energy, depending on how many people occupy the home, how much time is spent there, and other factors. As a result, your average bill may differ from the current owner’s. Still, it can be helpful to know the home’s everyday energy use.
10. Is your solar system monitored?
If it is, see if the seller can provide at least one year of historical data, including the cost to monitor the system.
11. Are all of the system components operating correctly? When was it last inspected?
In addition to asking the seller about the system’s current status, you may want to hire your own solar inspector and have them evaluate the system during the inspection period, which is a common contract contingency in most purchase offers.
12. If the system is owned, is it enrolled for solar renewable energy credits (SRECs)?
If you buy this home, you’ll want to find out if the current owners participate in a SREC program that rewards the owner for ongoing energy production, and how to transfer the registration to a new owner. SREC markets vary by state.
13. Are there any warranties for equipment or production?
If time remains on any warranties, can they be conveyed to a new owner?
14. Do you have a net metering plan, and is it grandfathered?
Each state treats the sale of power back to the grid differently. The best programs use net metering, allowing owners to sell excess energy back to the grid and earn credits for future use. In some cases, however, net metering plans are being phased out or may not transfer to a new owner.
Note: This is not a comprehensive list. As a potential buyer of a home with PV panels, you may have other questions. For example, some systems also include battery backup storage. Also, state and local markets may vary in solar incentives, permits, grid tie-in, and other factors.
REBAC thanks Melisa Camp, ABR®, C2EX, e-PRO®, GREEN, PMN, PSA, of HomeSmart in Phoenix, AZ, for her assistance in developing this content.