Photovoltaic Solar Panels and Home Purchases

Photovoltaic Solar Panels and Home Purchases

Questions about buying a home with solar panels? We asked Tiger Home Inspector Bill Rourke and Attorney David Rosenberg to give us insight into how best to manage the buying process when a solar installation is part of the transaction.

We are often asked, “Do Home Inspectors inspect photovoltaic solar panels”?

Solar panels are not covered under the Connecticut Home Inspection Standards of Practice, (SOP) as they are considered an ancillary system. However, there are several components and systems which could be affected by the installation of a typical rooftop solar array to be addressed as part of a Standard Home Inspection. They are:

SOP 20-491-3 Structural System.

The Inspection includes evaluation of the structural system, therefore, any impact as a result of the solar array connection to the structure would be identified as part on the Home Inspection.

SOP 20-491-4 Exterior.

In particular, the roofing inspection will identify any deficiencies as a result of the solar array flashing installation which could (or has) created a leak condition (for rooftop installations).

SOP 20-491-7 Electrical System.

Since the solar installation ties directly into the electrical service, any inspection (of accessible part of the interior) of the main service panel revealing a defect as a result of the solar installation would be recorded. (The dedicated equipment for the solar system would be a separate activity to be reviewed, in this case by the installation contractor as advised)

Generally, it is recommended that the client interested in purchasing a home or building ask questions regarding the systems permitted installation. It would be a good idea to consult the municipal building official to do a file review to ensure everything is in order (and the zoning official as needed). Additionally, it would be advisable to contact the installation contractor to have them do a system review at this time.

For sellers, providing all of the documentation related to the solar array installation, installation company and contract will aid in alleviating any concerns the purchaser may have, and likely result in a more seamless transaction.

After the home inspection process and as the sales process continues, there are other Real Estate professionals who will have a role in the solar conversation, here is what our friend Attorney David E. Rosenberg has to offer on the subject:

As people look for ways to “go green” through increased environmental consciousness, as well as efforts to reduce both their carbon footprints and their home energy costs, the number of homes with solar installations are growing. Like most innovations, the move towards solar comes with unintended consequences that are important to both the homeowner and Realtors looking to sell or find buyers for homes with these installations in place. Better information is the key to avoiding delays and ensuring a smooth closing.

First, understand that there is a financing component to most solar installations. Whether you are the Listing agent or a Buyer’s agent, it is a critically important first step to get the financing documents from the current owner/seller as soon as the contract is signed. This will tell you (1) the terms of the financing that the Buyer is expected to take on, whether that is a loan, a lease or a power purchase agreement; (2) the identity of the owner/servicer of the solar installation that needs to be contacted to start the transfer process; and (3) whether there are any liens in place that may affect either the land title or the Buyer’s financing.

For both Realtors and the homeowner/buyer, while gathering this information is essential, that you’re careful how you share and act upon it, is equally important. Please consult your attorney as soon as you have this information to investigate the transfer or subordination of the existing solar installation. Do not offer advice or opinions, even if you are only trying to be helpful, because there can be serious consequences for even innocent mistakes or misstatements. In addition to reviewing these often-confusing contracts, your attorney will help research the land titles, municipal liens and land use regulations as well as UCC financing records. Having the right information and the right team in place will help you close more deals with fewer hassles.

Questions on a transaction? Feel free to contact Attorney Rosenberg with an legal questions you may have. And, as always, we are here to assist clients with any inspection related needs.

David E. Rosenberg, Esq.

Gambardella Cipriano Gottlieb & Hathaway, PC

(203) 444-1264