What do you do with existing solar panels with a lean

Question

If you came across a great listing that was updated inside and out but had solar panels with a 20 year contract or ($20k lean) attached to the property, how would you handle it?

A couple of caveats.

1. The only way for the seller to remove the solar panels is to transition them to another property and unfortunately the seller does not have another place to transition the solar panels to or pay them off.

2. If the buyer wants to keep the solar panels they have to transition the 20 year contract to themselves.

3. The seller would have to pay off the $20k lean to keep them at the property for the buyer to receive free electricity for the next 20years!

What would you do?

Rene Salinas · Answer

The buyer didn't want to take over a 20 year contract with the solar panel company. Commitment issues i guess. lol. What we ended up doing was giving the seller the option to buy out half the life of the lease ($10k) and the buyer would then only be responsible for the other half over a 20 year time span so they get a steal with the energy cost. This deal almost fell through but we were able to make it happen!

Steve K. · Answer

What is the monthly lease payment on the system? If it's less than the monthly electricity payment would be without the system (often the case), then the buyer should have no problem taking over the contract because they'll benefit from discounted electricity. I'd focus on that and use it as a selling point because transferring the lease contract is probably going to be the only option unless the seller can pay off the lease and end the contract. The buyer could demand the seller do that but doing so might make the deal fall through which would be a shame. They would have an electricity bill for the property anyway, so the lease payment isn't adding any new operating cost.

Andrew Smith · Answer

Is the solar system a lease/PPA or is it a financed system?If lease/PPA then you can haggle with the provider to reduce the buyout. If not an option then the buyer can assume the lease/PPA.Unfortunately this is why for the most part leases/PPAs are not a good option compared to cash/financed ownership. If you want to connect I'd be happy to take a look and see if there's a better option.