Buying or selling a home/business with a solar installation can be a complicated and tricky negotiation if not addressed early on. Preparing your solar system for a sale is an important step to ensure everything goes smoothly. A real estate transaction already comes with quite a bit of information gathering, negotiating, lawyers, inspectors, bankers, etc., so the added layer of solar ownership transfer is often forgotten or brought up late in the sale. There are a number of considerations during this time period, such as equipment, financials, state policy and/or utility regulations, documented service visits, etc. If the seller does not have a clear understanding of the current state of the system and the steps involved, it can potentially lead to a frustrating and confusing final negotiation, which is something a seller should want to avoid.
A purchased system will yield a much smoother real estate transaction because the seller has full ownership of the system, outside of any personal lending to cover the upfront cost of the system.
If the system is leased and third party owned (TPO), things might become complicated. In most cases, the buyer must assume the lease for the remainder of the term OR the seller must pay down the remaining balance of the lease to gain ownership. For commercial systems operating under a Power Purchase Agreement, the process is usually a little more straight forward, depending on the terms of the agreement.
Why it matters: For a seller, having all necessary documentation, processes, and financials prior to negotiations is key. Entering a transaction with up to date and accurate information on the operating solar array should prove to streamline and simplify the sales process.
Who knows, perhaps the system is outperforming production estimates, and your savings are more than expected. That would be great information to relay to the buyer! On the other hand, what if the system is underperforming, a string down, electrical not up to code, etc...? This, of course, would not be great details to inform the potential buyer at closing.
Yes, you can! However, a long term solar lease, typically 20-25 years, can complicate the property sale. If you are currently under contract with a long-term solar lease, it’s not uncommon for the buyer to be hesitant to assuming a long term lease put in place by someone else. That said, more often that not, the path of least resistance is to buy out the existing lease and convert to ownership, then sell the “owned asset” to the buyer.
The SREC contract and obligations to the Illinois SREC production agreement stays with the system. In the event of a home or business sale a “transfer of ownership” process will need to take place during the sale so that the registration of the operating solar array is formally owned by the buyer.
The Approved Vendor assigned to the previously installed solar array will be able to conduct the transfer of ownership paperwork and process.
The Approved Vendor will be responsible for all system support under the Illinois Shines Program. It will either be the incumbent/existing Approved Vendor or new Approved Vendor, if needed.
Yes, all systems that were awarded full retail net metering will be remained “grandfathered” in for the life of the system, regardless if a transfer of ownership takes place or not.
At ilumen Solar we provide pre-listing solar system inspections including drone photos, written performance report, documentation review, and can assist with transfer of Illinois Shines/utility interconnection. Preparing your solar system for a sale is easier with our expert guidance and comprehensive inspection services.
