Buying a Home With Solar in Arizona: What to Check Before You Close
Solar on a house you're buying can be a real plus or a 20-year headache. The difference comes down to who owns the system, what paperwork transfers to you, and whether the equipment actually works. Here's what to check before you close.
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Start with one question: who owns the panels?
Everything else depends on this. Solar on an Arizona home usually falls into one of three buckets, and each one hands you a different set of obligations.
- ▸Owned outright. The seller paid cash or already paid off the loan. The panels convey with the house like the water heater does. This is the simplest case.
- ▸Financed with a solar loan. The seller still owes money on the system. Either the loan gets paid off at or before closing, or you work out an assumption with the lender. Don't assume it disappears on its own.
- ▸Leased or on a power purchase agreement (PPA). A solar company owns the equipment and the seller pays it every month. You're being asked to take over a contract, not buy equipment.
Ask the seller, or have your agent ask, for the original solar contract, any loan or lease documents, and the installer's name. If nobody can produce them, treat that as a finding, not a detail.
If the system is leased or on a PPA
Read the actual contract before you agree to take it over. You want to know the monthly payment, how many years are left, and whether there's an escalator. Many leases include a built-in rate increase of 1–5% per year, so a payment that looks fine today can climb every year you own the house.
Also look for a buyout price and what happens if you don't want the lease. Some companies will let the seller pay it off, some will move the system, and some just require you to qualify and sign a transfer agreement. That decision belongs in your purchase contract, not in a phone call after closing.
There are two loan-related wrinkles worth raising with your lender early:
- ▸The panels won't count toward the appraisal. Under Fannie Mae's guidelines, the value of the solar panels cannot be included in the appraised value of the property when they're leased or on a PPA.
- ▸The lease payment may count against you. The monthly lease payment must be included in the DTI ratio calculation unless the lease is structured with a fixed delivery of energy and a production guarantee. PPA payments based only on the energy produced may be excluded.
Third-party owned systems often have a UCC-1 fixture filing in the real estate records. It's the solar company's notice that it owns the equipment. A lender may object to that filing, so ask the title company to look for one and tell you how it'll be handled before closing.
If the system is owned
Owned panels are the easy case, but "easy" still means paperwork. Get copies of:
- ▸the installation contract and permit or interconnection approval
- ▸the panel, inverter and workmanship warranties, plus who to contact for each
- ▸login access to the monitoring app, or the account transferred to you
Warranties don't always follow the house automatically. Contact the installer and the equipment manufacturers to find out whether a transfer form or fee is required. If the original installer has gone out of business, the manufacturer warranties may still apply, but you'll need someone else to do the work. Our page on what to do when your solar company is gone walks through that.
Know what happens with your utility
The seller's solar arrangement with the utility matters to your future bills.
APS. On APS's current solar export plan, Rider RCP, each customer's initial RCP rate will be applicable for 10 years from the time of their interconnection. If you move into a home that's already on the rider, you may continue service under the rider with the same rate tranche. After that 10-year window, the credit follows whatever export rate APS has in effect. Ask the seller for a recent bill so you can see which plan the home is on and when it was connected.
SRP and TEP. Call the utility before closing, tell them the home has solar, and ask what you need to do when you start service. Plans and paperwork differ by utility, and it's much easier to sort out before the seller closes their account.
Check the roof under the panels
In Arizona, roof age matters as much as panel age. Panels sit on the roof for decades, and the roof underneath often wears out first. If the home inspector flags the roof, or the roof is near the end of its life, plan for a detach and reset: the panels come off, the roof is replaced, and the system goes back on. That's real money, so get a removal and reinstall quote during your inspection period and use it in your negotiation if needed.
Make sure it actually works
A system can look perfect from the street and produce very little. Before you close:
- ▸Look at the monitoring. Ask the seller to show you production over the last 12 months, not just today. A flat line, missing months or a "communication error" banner are worth asking about.
- ▸Compare a summer bill. If summer bills look like a home without solar, find out why before you close.
- ▸Get a solar inspection. A standard home inspection usually lists solar as present and moves on. A solar panel inspection looks at the panels, mounting and roof penetrations, wiring and grounding, the inverter, and monitoring, so you know what you're buying.
If something turns up, you can ask the seller to repair it, credit you for it, or adjust the price, the same way you would for a bad AC unit.
A short checklist for your inspection period
- ▸Ownership confirmed: owned, financed, leased or PPA
- ▸Contract, loan or lease documents in hand
- ▸Lease or PPA terms reviewed: payment, escalator, years left, transfer and buyout terms
- ▸Lender told about any lease, PPA or loan
- ▸Title company checked for a UCC-1 fixture filing
- ▸Warranties and transfer requirements confirmed
- ▸Utility plan and connection date known
- ▸Roof condition under the array reviewed
- ▸Monitoring history and bills reviewed
- ▸Solar inspection completed
If you're a buyer's agent, the SolarFIX Realtor Portal lets you request a solar inspection or bill review for a listing and download the report when it's ready.
FAQ
Do I have to take over the seller's solar lease?+
Not automatically. A lease or PPA is a contract between the seller and the solar company. It either transfers to you with the company's approval, gets bought out, or the seller deals with it before closing. Negotiate which one in the purchase contract.
Does the APS export rate stay with the house?+
Under APS's RCP rider, a customer who moves to a site already on the rider can keep the same rate tranche. Confirm the details with APS for the specific address before you close.
Should I get a separate solar inspection?+
A general home inspection usually treats solar as one line item. A solar inspection looks at the panels, roof penetrations, wiring, inverter and monitoring, so you know what you're inheriting.
Related: Solar panel inspection · The SolarFIX solar report for home sales · Do solar panels increase home value? · Removal and reinstall for a new roof
Under contract on a home with solar?
Have SolarFIX look at the system before your inspection period ends. Agents can request an inspection through the Realtor Portal.