22 August 2022
Selling a house with leased solar panels: your options
As we strive towards a more sustainable world, it is becoming increasingly common for homeowners to lease solar panels and enter into an energy supply agreement ("ESA"). While these can have benefits for the environment and your power bill, they can cause issues on sale of the property if this is not addressed before signing an agreement for sale and purchase.
The ESA associated with adding solar panels to your home are often for a long period of time (approximately 20 years). There can be limited ability to cancel these agreements, so a solution must be reached if you intend to sell your home.
While each ESA is different, we have generally found three common options are available to Sellers:
1. Leave the solar panels at the property and assign the energy supply agreement.
If you wish to leave the solar panels at the property and assign the ESA, the purchaser will need to agree to enter into the ESA on the existing terms. It is important that you provide the purchaser with a copy of the ESA and the key terms of the agreement (including monthly costs and information relating to the power output of the solar panels) to the purchaser prior to the agreement for sale and purchase being signed.
It is also important to check the requirements of your supplier in relation to assigning the energy supply agreement. Some providers will only accept an assignment to approved customers.
2. Leave the solar panels at the property and prepay the remaining term of the energy supply agreement.
This provides the solar panels to the purchaser for no additional costs to them, however the purchaser still must be aware that the solar panels are not included in the sale, and will be removed at the end of the term of the ESA and will be subject to any requirements in the energy supply agreement.
This may be a costly way to provide the solar panels, as you will have to pre-pay the full remaining term of the ESA.
3. Take the solar panels with you to your new home.
If you want to keep your solar panels and transfer your energy services agreement to your new home, you will need to check that your new home is suitable for solar panels to be installed. Some companies require that they approve the new house for the solar panels to be installed at. There is also usually a significant cost to relocate the solar panels. From our experience, this is usually in the range of $4,000 - $5,000.
You will need to check that the installation of solar panels will not breach any town planning regulations or land covenants on your new home.
It is also important to check the remediation standards of the roof when the panels are removed. If the roof will not be remediated to its pre-panel condition by the service provider, you may need to factor in the cost of the additional remediation of the roof back to its original condition (including any repairs, waterproofing and/or repainting).
• Contact your supplier before listing your property to find out your options under your ESA.
• Both parties should discuss their wishes about any leased solar panels prior to entering into an agreement for sale and purchase. The agreement for sale and purchase may need to be conditional on the purchaser being approved as a customer for the supplier, or the purchaser accepting the terms of the agreement.
• Set out clearly in the agreement for sale and purchase what has been agreed for the solar panels and ESA on settlement to avoid any unnecessary uncertainty for all parties.
Whether you are a house buyer or seller the Saunders Robinson Brown Property Law Team can advise relating to any you of your options, whether you are a house purchaser or seller, regarding solar panels. Contact us today.
The above information is of a general nature only. The information in this article does in no way constitute legal advice and all readers should contact a law firm for advice relating to their specific circumstances.