What happens to a solar loan, lease, or power purchase agreement when I sell my home?

What the rule says

Whether solar panels stay, go, or cost extra at closing depends on who owns the system and how it was financed — not on a single national rule. A system bought with cash and owned free and clear usually transfers with the home as part of the sale. A system bought with a solar loan is collateral for debt: in most sales the loan is paid off from the seller's proceeds at closing, or less often assumed by the buyer. A leased system or power purchase agreement (PPA) is owned by the solar company, and the contract generally continues — it is transferred to the buyer with the company's consent (often after a credit review), or it is terminated or bought out under the contract's terms.

No federal statute was identified in the official sources reviewed as of August 16, 2026 that requires a seller to disclose a solar loan, lease, or PPA in a residential home sale. State law, the solar contract, and general property law govern instead, and they vary. The federal materials reviewed — the Internal Revenue Service, the Federal Trade Commission, and the U.S. Department of Energy — address the tax treatment of solar and the contract terms consumers should check, not a national disclosure form.

Owned free and clear. When the seller owns the system outright, it typically stays with the home, and the U.S. Department of Energy reports that buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized, homeowner-owned solar array. DOE notes those studies focused on homeowner-owned systems.

Solar loans. A solar loan functions like a home improvement loan, per the Department of Energy. Many solar lenders secure the loan with the system itself and perfect that interest with a UCC financing statement. Under the Uniform Commercial Code as enacted in the states, a financing statement must be filed to perfect most security interests — see, for example, California Commercial Code section 9310 — and the secretary of state's office is the central filing office: filing "serves to perfect a security interest in named collateral and establish priority in case of debtor default or bankruptcy," and UCC filings are public records (California Secretary of State). At closing, the practical result is usually a payoff of the loan from sale proceeds or a formal assumption; escrow and title practice generally require one or the other before the buyer takes title clear of the filing.

Leases and PPAs. With a lease or PPA the homeowner does not own the system. As the Federal Trade Commission explains, "When you lease a system or have a PPA, you don't own the system. That means you can't claim RECs and aren't eligible for tax credits or financial incentives. Those go to the system's owner." These are long-term contracts — some last 20 years — and depending on the contract, ending a lease early "may be difficult and expensive." The FTC advises that the contract should say "what you must do to keep the contract in good standing, like paying your bill by a certain date, or notifying the company if you plan to sell your house," and whether there are early termination fees or buyout costs. DOE adds that third-party-owned systems "add some complexity to the real estate transaction" even though the overall sales-price and time-on-market impacts are mostly neutral.

Which authority controls

Four layers of authority interact at a sale:

• The solar contract. The loan agreement, lease, or PPA is the controlling document for transfer, notice, consent, and buyout. The FTC's checklist for sale-related terms asks: Does the contract let you move the system to a new home? Are you allowed to transfer the contract to the buyer? Do you have to give written notice before transfer? Will the buyer have to meet credit requirements or pay fees before taking over?
• State secured-transactions law (UCC Article 9). Where a solar loan is secured by the system, state commercial codes require a filed financing statement to perfect the security interest (California Commercial Code section 9310), and the secretary of state operates the filing and search system (California Secretary of State).
• State transfer-disclosure law. In California, the owner of a separate interest in a common interest development must provide a defined disclosure package — governing documents, current and unpaid assessments, and related items — to a prospective purchaser "as soon as practicable before the transfer of title" (Civil Code section 4525). For solar on a shared common-area roof, the association may require "the owner and each successive owner" to be responsible for "[d]isclosing to prospective buyers the existence of any solar energy system of the owner and the related responsibilities of the owner" (Civil Code section 4746). These are state-law examples; other states differ.
• Federal tax law. The residential clean energy credit under 26 U.S.C. section 25D is claimed by the taxpayer who owns the system — see below.

What may still be required or restricted

• Company consent and buyer qualification. Transferring a lease or PPA to the buyer usually requires the solar company's written approval, and the buyer may need to pass a credit review, pay a transfer fee, or both (FTC).
• Notice obligations. The contract may require written notice before you list or sell, and failure to comply can affect the transfer or trigger costs (FTC).
• Payoff and clear title. A secured solar loan must generally be paid off at closing or formally assumed; otherwise the lender's perfected security interest in the collateral remains on the public record (California Secretary of State; California Commercial Code section 9310). Request a payoff statement early.
• Common interest development paperwork. In California CIDs, the section 4525 package must be delivered before transfer, and shared-roof solar owners may carry disclosure and insurance obligations that bind successive owners (Civil Code sections 4525, 4746).
• Utility accounts. The net-metering or interconnection agreement typically needs to be transferred to the buyer through the utility; confirm the utility's procedure, which this guide does not cover.
• The tax credit stays with the owner. IRS Publication 5968 states that clean energy installations "must be owned (not rented or leased) by the taxpayer who claims the tax credit," and the IRS program page says used (previously owned) clean energy property is not eligible. A buyer of a home with an existing system generally cannot claim the credit on that used system, and a lessee cannot claim it on a leased system. The credit is claimed for the tax year the property is installed and is nonrefundable, with unused amounts carried forward (IRS).

Facts that could change the answer

• What the contract says. Assignment rights, consent requirements, notice windows, transfer fees, buyout prices, and early-termination charges are all contract-specific (FTC).
• How the loan is secured. A solar loan secured by a UCC fixture filing appears in public records; an unsecured personal loan or a loan folded into a mortgage refinance is handled differently at closing.
• Property type. Condominium and other common-interest sales trigger the transfer-disclosure package (California Civil Code section 4525), and shared-roof systems carry their own disclosure and insurance rules (section 4746). HOA-controlled detached homes follow their governing documents and state law.
• State law. Disclosure duties and UCC filing mechanics vary by state; the examples here are California and federal.
• When the credit was claimed. The residential clean energy credit belongs to the installing homeowner for the year of installation; a system sold later is used property for any new buyer (IRS; IRS Publication 5968).

Practical decision path

For sellers: (1) Pull the solar contract and read the transfer, notice, consent, and buyout provisions. (2) Request a payoff statement for any loan and the UCC financing statement number. (3) Obtain the solar company's written transfer terms and notify them as the contract requires before listing. (4) Assemble state-required disclosures — in California CIDs, the section 4525 package, and shared-roof disclosure under section 4746. (5) Give escrow the payoff figures and transfer documents early so closing is not delayed. (6) Keep your Form 5695 records for the credit you claimed.

For buyers: (1) Ask in writing whether the system is owned, leased, or under a PPA, and get the full agreement. (2) Run a UCC search at the secretary of state for filings against the seller or the property address. (3) Confirm whether the loan will be paid off or assumed, and what you must pay — transfer fees, buyout, or lease payments. (4) Verify who owns the system's tax credits and RECs, and confirm you are not relying on claiming the residential clean energy credit for a used or leased system. (5) Confirm the net-metering account transfer with the utility. (6) Be wary of "free" or "no cost" solar pitches — the FTC warns that such offers are scams and that the federal government does not install solar systems in homes for free.

Records to keep

Keep the solar contract and all amendments; payoff statements and the UCC filing number; the company's written consent or transfer approval and any fee or credit-approval correspondence; the disclosure documents delivered to the buyer (including, in California, the section 4525 package and any section 4746 disclosures); the utility account-transfer correspondence; and the closing statement showing how the solar obligation was resolved.

When professional advice may help

A real estate attorney can review the solar contract's transfer and buyout terms against your state's law before you list. A tax professional can confirm how the residential clean energy credit applies to your situation. Your escrow officer or title company handles payoff and lien clearance, and your utility handles the net-metering account. Before work begins, obtain the written requirement from the authority named in the guide and keep the record.