When listing your solar home for sale in the Phoenix area, there are questions that a pro-active real estate agent will ask you regarding your solar lease. While basic and necessary in nature, the information that you provide will become the basis of some of the contract terms and marketing used in the sale of your solar home. If your real estate agent fails to ask these questions, you should ask yourself if you have truly hired the best person to ensure a smooth and quick sale of your solar home.
Questions that your real estate agent should ask about your solar lease:
1) Can you provide me full copies of the most recent version of your lease, including any addenda and other paperwork related to the solar lease?
Agents will ask for this since the solar lease assumption addendum that will become part of your sales contract requires the seller to disclose the terms and conditions of the lease. Your lease should answer questions such as: How many more years are left on the lease? What is the monthly payment? Are there any warranties or production guarantees included in the lease? Is there an escalation clause and how does that affect the monthly lease payment? It is important that your real estate agent knows those terms and conditions upfront.
2) What type of equipment was used in your solar system including 1) the size, number, type, age and manufacturer of your panels, 2) the size, number, type, age, and manufacturer of your inverter, 3) any additional add-on equipment such as a battery backup system?
Not all equipment is manufactured the same and for the savvy real estate agent, he or she knows that higher performing equipment can be a marketing advantage for the seller. Furthermore, it is important to know if equipment has been replaced or may be nearing the end of the life expectancy of that particular part of the solar system.
3) Has any of the equipment failed and or been replaced since the system was installed? Who maintains the panels? Who insures the panels?
While most of these answers should be in the lease documentation, there are situations where the home owner is responsible for the maintenance, warranty, and liability of the panels. Knowing that there has been a problem with the second inverter, for example, is critical data that a seller will need to disclose to a home buyer.
4) What is the size of your solar system in kilowatts (kW)? How many kilowatt hours (kWh) does it produce per month? Per year?
Knowing the size and production of your solar system will help determine how much the solar system offsets your electrical needs and potentially the needs of the new home buyer. Do you offset 100% of your total electricity? Offset only on-peak demand? Is it a tiny system on a large house that has little impact on the electrical demand of the home owner or was it sized way beyond the needed demand of most normal home owners?
5) Can you provide at least 12 months worth of recent utility bills since you have had solar?
Most agents ask this question to show what the average bill is over the year but a good agent should be able to estimate your total electrical usage (utility and solar consumption) and how the solar impacts the home during the summer, on peak, off peak, and throughout the year. While it is nice to know that there are low utility payments each month or that the utility company provides a substantial credit to the electric account at the end of the year, knowing how the full benefits produced by the solar and the various impacts that it has on utility costs are crucial in the marketing of the solar benefits of the home. Most importantly, the real estate agent needs to know what rate plan you are currently on and if have net metering on your account.
6) Based upon the utility bill data, are you grandfathered in at that rate plan?
With utility rates always in flux and changing, knowing that a particular home is locked in on a lower rate plan can help the real estate agent prepare marketing on the home that shows how much more a person will save based upon the lower rate plans than current options with or without solar. There are instances in the Phoenix area, for example, where home owners have been grandfathered in a 20+ year old rate plans for the next 20 years.
7) Do you have the contact name and number of the transfer team at the solar leasing company?
Basic question that needs to be asked right away. A good agent will contact the solar leasing company before a buyer is found to make sure that they have the needed transfer documents in place and are versed in that particular company’s solar transfer process.
8) Is there a transfer fee? What criteria does a buyer need to meet in order to qualify for the lease?
While most lease transfers do not cost, there are a few companies that charge either the buyer or seller fees to transfer the lease from one to the other. Who pays? When is payment due? Additionally, buyers may need to meet certain income and or credit criteria to be eligible for the solar lease. Are there options where these qualifying guidelines can be waived? Will you be charged additional fees to waive qualifying guidelines?
9) Is there a buyout of the solar lease? If so, when? How much?
An agent should know their options if they are to help the seller negotiate the best possible price and terms for their client. While there may not be buyout options in the lease, there could be other clauses that allows the home owner to lock a payment or remove an escalation clause.
10) Do you have a UCC-1 filing against your home?
While a UCC filing is not a lien against your home, most lenders will require that the UCC filing be removed from title prior to the closing of the home. Most solar companies, however, will require that there be a UCC filing placed against the property to protect their solar equipment. These filings can take days if not weeks to remove and it is important to start working on its release as soon as possible.