Selling a House With Solar Panels in California: Owned or Leased

What happens to your solar panels when you sell a house in Simi Valley? Selling a house with solar panels in Simi Valley, or anywhere in California, comes down to who owns the system. If you paid cash, the panels simply go with the house. If you financed them, the solar loan usually gets paid off from your proceeds at closing. If you lease the panels or have a power purchase agreement (PPA), the California Public Utilities Commission says your choices are typically to transfer the contract to the buyer or buy it out, and PACE financing on your tax bill often has to be paid off. Pull your solar paperwork the week you decide to sell.

Updated November 2026. Here's how each type works in a Simi Valley or Ventura County sale, what the buyer's lender will look at, and what to gather before you list.

Step One: Find Out Which Kind of Solar You Have

The CPUC's California Solar Consumer Protection Guide describes four common ways homeowners pay for solar. Each one changes your sale:

• Cash purchase. You own the system. It's part of the house, like a water heater or a new roof. Nothing to transfer.
• Solar loan. You own the system, but there's a loan against it. The CPUC notes that some solar loans place a lien on the property. Plan on paying it off at closing, just like your mortgage.
• Lease or PPA. A solar company owns the panels on your roof. With a lease you pay a set monthly amount; with a PPA you pay for the power the system produces. The CPUC says typical contracts run 20 to 25 years, and payments often rise each year through an "escalator," typically 1% to 3%.
• PACE financing. You own the system, but you repay it through an added assessment on your property tax bill. The CPUC calls it a first-priority lien on the property.

Not sure which one you have? Check your monthly statement and your property tax bill, where PACE shows up as a line (our Simi Valley property tax guide shows how to read it). Then call the solar company or PACE administrator and ask for a payoff or transfer packet.

Owned or Financed Panels: What Happens at Closing

An owned system is the simplest sale. Fannie Mae's Selling Guide says that when the owner owns the panels, its standard appraisal, insurance and title requirements apply. Keep your equipment warranties, especially for the inverter, which the CPUC notes may need replacing sooner than the panels.

With a solar loan, ask the lender for a payoff demand early, the same way escrow orders your mortgage payoff. If the loan company recorded a UCC-1 "fixture filing" in the county land records, Fannie Mae describes it as notice to title companies of a security interest in the panels. Escrow and title will want it paid and released so the buyer's loan can record cleanly. See our week-by-week escrow guide for where payoffs fit in.

Leased Panels or a PPA: Transfer or Buyout

The CPUC guide puts it plainly: if you sell before the lease or PPA ends, you either pay the solar provider the remaining value of the contract or transfer it to the new owner. Buying out a lease or PPA "can cost thousands of dollars," so check your contract's terms before you set a price.

• The buyer has to be approved. Ask the provider what it requires, how long it takes, any transfer fees, and what happens if a buyer doesn't qualify.
• Share the numbers up front. The contract, current payment, years left, escalator and 12 months of electric bills.
• Put it in the purchase agreement. Spell out who takes over the solar contract and what happens if the buyer isn't approved.

What the Buyer's Lender Will Look At

Most buyers finance, so their lender's rules matter to you. Under Fannie Mae's Selling Guide (section B2-3-04, Properties with Solar Panels):

• Leased or PPA panels don't count toward the appraised value. The lender must get a copy of the lease or PPA.
• A fixed lease payment usually counts in the buyer's debt-to-income ratio. PPA payments based only on the power produced may be left out.
• A "precautionary" UCC filing is acceptable when it describes only the solar equipment, not the home or land. Fannie Mae calls that a minor impediment to title.
• PACE has to be paid off. Fannie Mae won't buy a loan on a home with PACE financing unless the PACE balance is paid in full at or before closing. The CPUC guide also notes that some lenders won't lend on a home with a PACE lien until it's paid.

Get a copy of your lease or PPA to your agent before you list so a buyer's lender isn't waiting on it mid-escrow.

Your Utility Billing Plan After the Sale

According to the CPUC, homes interconnected under NEM 2.0 can stay on that tariff for 20 years from the date the system was interconnected. Systems that applied on or after April 15, 2023 are on the Net Billing Tariff (the utilities call it the Solar Billing Plan), where credits for power sent to the grid are usually lower than retail rates. The CPUC says the nine-year Net Billing "legacy period" is locked in for the original customer who interconnected the system, so a buyer should ask the utility how the plan carries over after the sale. Give buyers your interconnection date (often on the utility's "permission to operate" letter) so they can check.

Does Solar Add Value?

Owned panels can count in the appraisal; leased or PPA panels can't, and the payment and transfer approval can cool some buyers. Clear documents help either way. For a pricing starting point, try our Simi Valley home value tool.

What to Gather Before You List

• Your solar contract (purchase, loan, lease, PPA or PACE) and the company's contact information.
• A payoff demand, or the provider's transfer packet and buyer-approval steps.
• Your CSLB Solar Energy System Disclosure Document, if you got one when the system was sold to you.
• 12 months of electric bills and your interconnection or "permission to operate" date.
• Equipment warranties, and records of any roof work done when the panels went in.

Disclose the system and any related contracts on your seller disclosures; our plain-English disclosure guide walks through the forms. If you're selling to buy your next home, we plan both moves together so you're not stuck in between.

Frequently Asked Questions

Can I sell my house if I have leased solar panels?
Yes. According to the CPUC, your options are typically to transfer the lease or PPA to the buyer or pay the solar provider the remaining value of the contract. Check your contract for the exact terms and any transfer fees.

Do I have to pay off my solar loan when I sell?
Usually, yes. A solar loan is typically paid from your sale proceeds at closing, like your mortgage. If a UCC-1 fixture filing was recorded, escrow will want it released. Ask your lender for a payoff demand early.

What is a UCC-1 filing on a solar home?
It's a notice filed to show a company's interest in the solar equipment. Fannie Mae says a precautionary filing that covers only the leased equipment, not the home or land, is acceptable for a buyer's loan. A fixture filing tied to a solar loan normally gets paid and released at closing.

Do I have to pay off PACE before I sell?
Often, yes. Fannie Mae won't buy a loan on a home with an unpaid PACE balance, and the CPUC notes some lenders require it to be paid before they lend. Ask your PACE administrator for a payoff amount before you list.

Does the buyer keep my NEM 2.0 solar billing?
The CPUC says NEM 2.0 systems can stay on that tariff for 20 years from the interconnection date. Buyers should confirm the details with the utility before closing.

Related Articles

• How Much Does It Cost to Sell a House in Simi Valley?
• California Seller Disclosures in Plain English
• The California Escrow Process, Week by Week
• Get Your Simi Valley Home Ready to Sell: 30-Day Checklist

Selling a Home With Solar?

We'll help you sort out the solar paperwork early and show buyers what the system does. Schedule a call or call or text 805-424-6226.

Sources

• California Public Utilities Commission, California Solar Consumer Protection Guide (leases, PPAs, PACE, selling your home), viewed November 3, 2026.
• California Public Utilities Commission, Net Energy Metering and Net Billing, viewed November 3, 2026.
• Fannie Mae Selling Guide, B2-3-04, Special Property Eligibility Considerations: Properties with Solar Panels, viewed November 3, 2026.

Steve Hise and Tricia Garcia, Real Estate Toolbox at eXp Realty, 1720 E Los Angeles Ave, Suite F, Simi Valley, CA 93065
Steve Hise CA DRE #01702055 | Tricia Garcia CA DRE #02032007

This article is general information, not legal, tax or financial advice. Your solar contract's terms control; check with your solar provider, lender and escrow, and talk with a CPA or attorney about your situation.