Buying a house is an exciting but stressful moment in many people's lives. Buying one with a solar lease attached can be a great perk and be fully worth it, but it can also make things a little more complicated.

That's especially so if the leasing company is not a prominent one that has been in business for many years. Thankfully, a California realtor has advice on how to make sure you don't end up with buyer's remorse.

The scoop

In a TikTok video, Patricia Holter (@realtorpatricia_01) explained that if you are buying a home with an existing solar lease, taking on that lease could be part of the purchase agreement.

@realtorpatricia_01 Buying a house that has a solar lease (aka a loan for the solar), lets talk about what happens and what you should do if the home you want to buy has one! #californiarealtor #realtortiktok #californiarealestate #sacramentocounty #homebuyertips #fyp #firsttimehomebuyer #realestateagenttips ♬ original sound - Patricia Holter

If that's the case, Holter stresses doing your due diligence to make sure the terms are something you're comfortable with and to immediately let your loan officer know about the lease.

"Make sure it's not going to mess up your qualifications," Holter says. "Because if you're shopping around at the max of your preapproval letter, you might not qualify for this house with also having to take on that solar lease." The lease would actually be saving you money over your utility bills if the company is legitimate, often over $100 per month, but the loaning bank or credit union may not view it that way, and you don't want to run into surprises.

Rooftop solar panels are one of the best ways to lower your energy bills while reducing your reliance on fossil fuels that emit loads of air pollution. But solar options can feel overwhelming, which is why The Cool Down launched its Solar Explorer, a one-stop hub to connect you with partners who can make the process easier while also saving you money.

Palmetto's LightReach, for example, is one of the nation's best leasing programs that can get you solar panels with no money down, and Palmetto, a TCD partner, has been in business since 2010, so that's an example of a company you could trust. Another partner in the Explorer, EnergySage, does not oversee installs itself but can help you save thousands on buying solar panels by providing curated bids from local, vetted installers.

While many panels on a home may be bought outright and others are leased, some contracts for solar panels may be under what's called a power purchase agreement, too. A PPA is similar to a lease, but instead of paying a fixed monthly rate, the homeowner pays for the electricity generated by the panels at a fixed, lower rate than the local utility company would charge.

While it comes with a transferable contract, a PPA may be less likely to influence a mortgage approval since it is more tantamount to replacing the utility company rather than a committed lease.

Palmetto's LightReach, for example, offers either option plus free maintenance of the panels since it retains ownership, and either one can save the homeowner money. But prospective home buyers should do their diligence about any contract to understand the terms and whether it may affect their approval in any way, regardless, even if the panels should easily prove to be a money-saving perk once living in the home.

How it's helping

Holter's advice is particularly salient in California, where solar panels are required on most new construction homes.

If those panels are leased, Holter says buyers should ask to see the lease agreement and to know information like how many years the lease will last.

"Make sure to really dive into the documents of the solar agreement to make sure it's something you're comfortable with," she says. Leasing has become a more popular option in recent years for those who want to experience the benefits of solar energy without the upfront cost of buying solar panels.

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What everyone's saying

Commenters thanked Holter for her video, saying it was especially useful given the prevalence of solar panels on many homes.

"Great information!" one commenter wrote. "It's becoming so common."

Solar panels are even better when paired with other electric appliances, like a heat pump, to bring utility costs down further. TCD's HVAC Explorer can help you find the right heat pump (or another energy-efficient heating and cooling system) for your home and budget.

If you really want to save money, check out the free Palmetto Home app, which can unlock thousands of dollars in savings (up to $5,000) via simple actions in your everyday life.

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