Yea, that’s a real odd title for a blog.. and I am not even sorry for something I did or my company did, but I am forced to apologize for the industry I am in.
We’ve known for many years that real estate agents were not giant fans of solar systems on homes but we weren’t able to put our fingers on exactly why. In the past we either got the cold shoulder or were told they wanted to focus on just the sale and nothing else.
Fast forward several years (like 7) and we now know the truth. Throughout the State of New Jersey there are real estate agents from countless agencies who have horror stories about trying to sell a home that has a Solar Lease/PPA on it. The solar is a black eye to the listing and they often hear the buyer loves the home but wants the solar removed.
The best part is some of those agents know solar works and are equally impressed with its capabilities. I spoke to one today at a networking event that actually said:
“There are homes in Colts Neck and Red Bank, massive homes, that run their entire homes on solar and have $30 or less electric bills. It’s amazing how well the solar can work.”
To get to the bottom of why this is the situation, what the correct information is and what the solution is… I must get into the details so please forgive me for the length of explanation. You will find we explain things here at EcoMen because we don’t want to make stuff up and we want people to be informed.
A Solar Lease/PPA is like renting an apartment. You get all the benefits of a structure over your head at a lower cost than a full mortgage and maintenance on a home but you don’t get to derive all the benefits like deducting mortgage interest and building equity in your home.
A Solar Loan is like a Mortgage. You get all the financial benefits of the home but you use someone else’s money in order to make it happen and pay interest in the process.
A Cash Purchase is… well… a Cash Purchase. Everything is yours, no interest, nothing. For those of us who have such reserves.
The challenge comes when a homeowner has a Solar Lease/PPA. These are contractually obligated 20-25 year arrangements that are not really breakable. If sold properly, the home should be receiving cheaper electric bills and that reduction should be locked in over time. However, not all companies sell Solar Leases/PPAs that are in the best interests of the homeowner because let’s be honest.. not all homeowners actually read the fine print. This makes the solar not the benefit it should be. Also, a vast majority of these Lease/PPA systems were sold by national companies that no longer exist and who’s remaining online reviews are not so good. The new buyer rightfully feels concerned and backs away from the deal, wasting the real estate agents time and the homeowner selling the home.
The solution to this is to have a knowledgeable person take a look at the existing paperwork and make a value assessment of the system. Assuming the system has been operational for a year or more, has no issues, is structured at a lower rate than the existing utility and has a very low or non existent escalator.. you are probably ok. What needs to happen is this value assessment needs to be made upfront before the listing is shown so the agent is armed with all the information needed to make that sale a success. The existing homeowner needs to contact the Solar Lease/PPA company and initiate the Transfer Process which all Lease/PPA companies support.
Should the homeowner have been sold a negative Lease/PPA where they are actually paying more than the utility, this is not something that can be helped. Sadly, that situation is not good and it hurts all solar companies, even those who did not participate in such selling practices.
When a customer has a Solar Loan or purchased the system with cash, such problems don’t exist. Typically these clients did more homework and know what their systems are producing and they can either transfer the loan to the new buyer or buy it out themselves and add an appropriate amount to the listing as the home basically comes with decades of prepurchased electricity.
To conclude, I am sorry you have to sell homes that sometimes have poor financial products on them which burden the sale. This should never happen when you sell clean solar and it is a black mark on the industry at large. What EcoMen can do is offer to be your trusted advisor to help in these listings as we can advise if the home is receiving savings or not receiving savings. A look at their existing utility bills and any paperwork (especially the agreement) from the Lease/PPA company can provide us the data needed to get you answers.
We look forward to building a relationship with you by trying to help resolve problems others may have left you. Give us a call to talk more about this. You will find we are a different solar company.
Solar Solutions for New Jersey, New York, and Eastern Pennsylvania