Solar Lease vs. Solar Purchase: What It Means When You Sell in Arizona

A solar lease and a solar purchase are different deals. There are three ways to pay for solar: you can buy it outright, finance it with a solar loan, or lease it. A lease includes a power purchase agreement, where you pay for the electricity the system makes instead of renting the hardware. The monthly payment can look similar on paper, and the difference is underneath it.

I'm Jen Keene, a REALTOR® with eXp Realty Luxury in Scottsdale, AZ, and I'm the agent people call at every stage of their life. If you're selling a house with solar, I'll look at your contract with you and help you plan the timing.

Buy the system, with cash or a solar loan, and you own it. It belongs to you the same way the roof or the water heater does. A loan means you owe a lender until it's paid off, but the panels are yours from the day they're installed.

Lease the system, or sign a power purchase agreement, and a solar company owns it. You pay the company every month, or you pay for the power the system produces, and the equipment stays theirs for the length of the contract.

Who owns the panels decides what happens when you sell and how a buyer's lender looks at the house.

For homeowners who buy a system now, yes. The federal residential clean energy credit was 30% of the cost of a system. According to the IRS, it is not available for property placed in service after December 31, 2025. If your system was bought and in service by the end of 2025, the credit was yours, and a tax professional can tell you whether you have any left to carry forward.

This changes the math on buying. Without the credit, the cost of owning a new system is the full cost. I'm not a tax professional, so talk to yours about your own situation.

Start with how long you expect to stay in the house. If you're staying a long time and can pay cash or qualify for a loan, owning the system means you hold the equipment instead of making payments on equipment you'll never hold title to. If you're not sure how long you'll stay, that belongs in the decision.

A solar loan is approved the way most financing is, on your credit and income. A lease or power purchase agreement is a service contract, so the solar company runs its own review.

Compare what you pay for electricity now to the lease or loan payment plus whatever power you'd still buy from the utility. Then read the contract for what happens later. Many leases and power purchase agreements include a yearly increase in the payment, so year one isn't what you're paying in year twelve. Your contract will say if yours does. And ask what happens if you sell before the term is up, for either kind of agreement.

Usually not much. Many solar loans are personal loans, but some use the home as collateral. Check your own paperwork to see which you have. In the ordinary case, you pay off what's left of the loan at closing, out of your proceeds. The buyer gets a house with owned solar, and there's nothing else to resolve.

This is where the two split.

A leased system often has a UCC-1 fixture filing recorded against the property, usually at the county recorder's office, the same place deeds and mortgages are recorded. It's a public notice that the solar company has an interest in equipment attached to the house. Your title report will show it. Many lenders will ask for that filing to be released or subordinated before they fund, so I have the buyer's lender and the solar company talk early. Rules differ by loan type, so I check with the lender.

The lease also doesn't transfer on its own when the house sells. The buyer generally has to apply to take it over, which usually means the solar company runs its own credit check, in addition to the buyer qualifying for the mortgage.

A leased system doesn't stop you from selling. It adds a step, and the solar company isn't on your timeline, so it can add days or weeks. I start it the day you accept an offer. I wrote about the buyer's side here: what happens when you buy a home with leased solar panels.

If the lease still has years left, one option is to buy the system out before you list, so it comes with the house owned. Ask the solar company what the buyout is today and what it will be in the year you expect to sell.

An appraiser can credit a system you own outright, the way they'd credit a new roof or an updated kitchen, because it comes with the house. A leased system is a contract the solar company holds, so it doesn't count as part of the house in the same way. Appraisers often treat a leased system differently than an owned one, and your appraiser and the buyer's lender decide how it counts.

Solar is something you list on the seller disclosure, so tell me about it up front.

This is part of the pricing conversation I have with every seller. How I price a home accounts for what you own versus what's financed or leased. If you want a number for your home with solar factored in, I'll walk the house and give you a real number on what it's worth, not an online estimate that has never seen your roof.

• Not reading the yearly increase before signing a lease or PPA. A payment that looks good against today's utility bill can look different ten years in. The contract is where that number is written.
• Assuming a lease transfers to a buyer like owned equipment. It's a separate approval on the solar company's timeline. If you learn this from the title report, it's late in the sale.
• Waiting until the house is under contract to ask for the buyout figure. Get it the day you decide to sell.
• Mixing up a solar loan and a lease. A loan and a lease both arrive as a monthly bill, but they're different contracts, and which one you signed decides who owns the panels. Your contract says which, and if it doesn't say plainly, ask the company.

If you might sell in the next few years, work out the numbers before you sign. A system you bought outright, or a loan that's nearly paid off, sells with the house with no extra step. A lease you're three years into, with seventeen years left on a twenty-year term, is something you'll either transfer to a buyer or buy out. Ask the solar company what the contract looks like in the year you expect to sell, not just what it looks like today.

It happens, and it's usually fixable. The usual cause is the fixture filing showing up on the preliminary title report before anyone has started the transfer paperwork with the solar company. Start that process the day you accept an offer, and tell the buyer's lender what to expect.

How I prepare a listing includes getting the solar paperwork organized before the house goes on the market. Call me at (480) 203-6605 or get in touch, and I'll look at your lease or loan paperwork with you before you list.

I'm a real estate agent, not a tax, legal or lending professional. Your solar contract, your tax professional and your lender have the final word on your situation.