The solar panel contracts that can kill home sales

The transportation for star sounds simple: At a clip erstwhile electrical bills are skyrocketing, installing panels tin slash your inferior costs and warrant a lower, fixed complaint from a greenish vigor source. When it comes clip to sell, panels tin rise location values by 5% to 10%.

The lone problem? Many homeowners with star don’t really ain their panels. Instead, they lease them. Leases tin tally up to 25 years and travel with onerous monthly payments, yearly increases, and hefty early-purchase prices — they’re a liability, not an asset.

Owners who motion specified deals often bash truthful nether the content that if they merchantability their homes earlier their lease ends, their buyers volition instrumentality implicit the payments. But the world is much complicated: Buyers whitethorn conflict to suffice to presume a semipermanent liability connected apical of their mortgage, oregon simply garbage to instrumentality implicit a hefty declaration they had nary portion successful signing up for.

As buyers summation crushed successful galore parts of the country, existent property agents accidental star leases person emerged arsenic a predominant sticking constituent successful negotiations that tin extremity successful sellers paying disconnected their contracts early, often for tens of thousands of dollars, lest their buyers locomotion away.

“When you spell to merchantability the house, if you don't wage disconnected this system, the purchaser has to suffice not conscionable for buying the house, but besides for this lease,” said John Bulik, a existent property cause successful the occidental suburbs of Denver. “It tin sound retired immoderate imaginable buyers, and we spot a batch of buyers not wanting to spell done that hassle.”

Read more: Seller's disclosure: How it affects location sellers and buyers

Residential star has exploded successful popularity successful the past 2 decades, spurred by a increasing involvement successful greenish energy, precocious energy prices, taxation incentives, and technological advances that made panels cheaper and much efficient. Nationwide, astir 8% of homes present person star (in sunny states similar Hawaii, California, and Arizona, that fig is acold higher), making panel-dotted roofs progressively communal successful listing photos.

While prices person travel down implicit the years, star is inactive a hefty investment: In 2025, Tesla enactment the outgo of an mean strategy astatine $21,900 to $26,400.

Leasing removes those up-front costs and relieves homeowners of attraction headaches associated with owning their panels outright. The tradeoff, successful summation to imaginable home-sale complications, is that they often extremity up paying much and seeing their vigor savings diminish implicit clip owed to communal declaration clauses that ratchet up payments each year.

Despite the downsides, leases person been increasing successful popularity successful caller years. As of mid-2024, astir 36% of residential star projects were leased oregon nether a lease-like statement known arsenic a powerfulness acquisition agreement, up from 22% 3 years earlier, according to star probe steadfast Ohm Analytics.