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Thursday, March 28, 2024

Leased Solar Panel Poses Problem For Home Sellers

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A Fullerton resident, only identified by his last name Park, recently ran into an obstacle while trying to sell his house. It was because of a 3-year-old solar panel on his roof. After spending about $200 a month on electricity, Park installed the panel to save some money. It was an easy decision as setting it up was free.

The problem started when Park tried to sell the home. The buyer did not want the solar panel and requested for its removal. Although Park agreed to remove it, but soon faced another trouble—the cost.

He initially chose the cheapest lease deal when installing the panel, which is at least about 20 to 30 percent lower than the cost of purchasing it. The lease term is generally for 20 years. There would not have been an issue if the buyer chose to keep the panel, but once requested for removal, Park is obligated to comply. However, the penalty for terminating the lease deal obviously comes at a cost.

“I ended up spending $10,000 to remove the solar panel to close the deal on selling my house,” Park said. “It also extended my escrow period, so the deal almost came to falling through. Taking everything into account, I ended up losing more money despite saving on my electricity.”

Case in point, consumers are now advised to be aware of the consequences when opting to install a solar panel at their homes. As the panels are becoming increasingly popular, its critics say that the safety and efficiency still remain questionable. Although solar panels are rarely a factor in breaking a deal, some real estate agents say that it could indeed become problematic.

It is when the solar panel is leased that causes issues. If the homeowner simply purchased the panel outright, simply removing it once asked would not lead to problems. However, lease deals require the homeowner to pay monthly fees throughout the duration of the contract. Terminating that contract obviously is costly. Although termination fees vary, it ranges from at least a few thousand dollars to more than $10,000.

“This is why we don’t recommend leasing the panels,” said Solison Solar president Jacob Joo. “Some customers still prefer leasing as its monthly payment is lower, but they should make that decision based on how long they’ll be living at their current homes.”

By Hyunwoo Kim