Negotiating price an a home with large solar lease balance

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

@Corinne De Ocejo Have your agent write the offer letter stating solar leases must be paid before closing. End of story.

You're not going to take over lease payments or pay off a $62k balance on deprecating equipment (solar panels). It's unlikely the current owner moves the panels either because it's costly. The solar energy industry is somewhat predatory in my opinion. Homeowners think they're going to save money on energy bills (they do) but it hardly justifies the costs and/or they don't think long term. It's a luxury upgrade that should paid for in cash. Leasing solar panels and then kicking the can when you go to sell doesn't work. People aren't stupid. The company that owns the equipment will have to run a credit score. Even if they went bankrupt somebody owns those panels. You'll have to qualify to buy the property and the panels. I guarantee those panels have been a red flag for other prospective buyers.

We ran into a similar situation about 3 years ago. We almost put an offer on a property with solar. The seller didn't have a lease agreement but I took pictures of system and figured out it was at least 12 years old. That's roughly half the of panels useable life gone. The garage battery system had a red light indicating a fault. Indiana doesn't have net-metering (paid for surplus energy generated) so the benefits are even less in my opinion. Something to think about if you move forward with that property. Cheers.

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Michael Eskenasy

Investor · Pacific Northwest · Member since 2026 · 538 posts · 313 votes

1mo

Corinne, I wouldn’t negotiate this as “the panels have a $62k balance, therefore I want $62k off.” I’d treat the solar agreement as a separate liability attached to the transaction and figure out exactly what obligation you would be inheriting before assigning a dollar amount to it.

You already have leverage because the property has sat before, has condition/layout issues, and the solar agreement still has roughly 20 years remaining. Before finalizing the offer, I’d want the actual contract and current servicer information—not just the original headline balance. Specifically: remaining payments, escalation clauses, transfer requirements, buyout amount, equipment age/condition, production guarantees, and what happens if the roof needs work or the system has to be removed/reinstalled.

My preference would be to structure the offer in this order:

Best outcome: seller delivers the property at closing with the solar obligation fully satisfied.

Second-best: seller obtains a written buyout/payoff and credits you enough at closing to eliminate it.

Last choice: you assume the agreement, but only after underwriting the remaining obligation as part of the purchase price and reducing your offer accordingly.

The important thing is not to accidentally pay market value for the house and then inherit somebody else’s financing decision on top of it.

Also, because the original solar company went bankrupt, I’d make transferability and ownership of the equipment a due-diligence item, not an assumption. Somebody may still own or service that contract, and you want that chain clear before closing.

You’ve already done the right work on the real-estate side with the comps. I’d keep the negotiation clean: property value based on the property; solar obligation handled separately as a closing condition or quantified liability.

That makes the discussion much easier to defend than simply saying “I want another $62k off.”

This is exactly the kind of thing our system looks at—separating the asset from the obligations attached to it so you know what you’re actually buying. Feel free to reach out if you want to compare notes once you get the solar contract.

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Diana KhanPro Member

Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 688 posts · 246 votes

1mo

Quote from @Corinne De Ocejo:

Hey All,

I'm currently looking at a sfh that has been sitting on the market awhile (and did the same in 2024 when they tried to sell it then). It has a fair amount of cons contributing to the lack of interest so I don't think many buyers even get to the details of the solar lease which is 5yrs in to a 25yr lease totaling $62k with a company that has gone bankrupt (waiting to hear exactly what the current company/balance is).

I've done a detailed analysis of the comps to best negotiate down the price but I'm not sure the best way to estimate/justify the discount for the solar lease. Especially since I'm already going to be asking for a significant discount based on the condition/layout. I'd appreciate any thoughts on exactly how much of the balance I should be asking for (all of it?) and the best way to frame that. I'd also be open to them either paying off the lease completely or cancelling the lease and having it all removed before closing. Just not sure what the right approach is for this situation.

Note: From what I can see in my market solar is not necessarily a con as long as there are no other issues with the house.

Thanks!

@Corinne De Ocejo, I’ve worked on real estate deals where something outside the normal purchase contract ended up becoming one of the biggest issues before closing. Solar agreements can be one of those things because the buyer is not just looking at the house anymore, they may also be stepping into a separate contract.

Before I decided what discount to ask for, I would want the current payoff or buyout amount in writing and confirmation of who actually owns or services the agreement now. I would also want to know exactly what has to happen for the lease to transfer, be paid off, or be removed before closing. Once you have that, the negotiation becomes much clearer because you are working with the real obligation instead of estimating from the original balance.

I’d be glad to stay connected, @Corinne De Ocejo. You’ve already done the hard work on the comps, and this is one of those situations where the paperwork behind the property can matter just as much as the property itself.

[email protected]240-266-0291

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Negotiating price an a home with large solar lease balance

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