This is the foundational question from which every other solar consideration flows. The answer determines whether the system has appraised value, whether there is a lien on the title, whether the buyer assumes a monthly obligation, and how the transaction is structured.

Owned (paid cash): The system is real property, passes to the buyer at close, has no lien, and can contribute to the appraised value of the home. The simplest scenario in a solar real estate transaction. Verify documentation of ownership and confirm no UCC-1 was filed during a prior financing period that was never terminated.

Financed (solar loan): The buyer owns the system but has an outstanding loan. Some solar loans are recorded as liens against the property (particularly PACE loans — Property Assessed Clean Energy loans, which are collected through the property tax bill). PACE loans in particular require special attention because they transfer with the property and become the buyer’s obligation at close. Ask specifically whether the solar financing is a PACE loan, a personal loan, or a home equity instrument.

Leased or PPA (Power Purchase Agreement): The solar company owns the equipment. The homeowner pays monthly for the right to use the energy produced. This structure involves a UCC-1 filing, a lease agreement with specific transfer provisions, and a credit qualification requirement for the buyer to assume it. If the buyer does not qualify or does not want to assume the lease, the seller must buy it out or arrange removal before or at closing.

Before making an offer on a home with a leased solar system, request a copy of the full lease agreement. The terms that matter most:

PACE loans deserve particular scrutiny. Unlike a standard solar loan, a PACE loan is typically recorded as a special assessment against the property and collected through the property tax bill. It does not disappear at closing — it transfers to the buyer. Some lenders will not originate a mortgage on a property with an outstanding PACE lien without specific loan program eligibility. Ask the seller explicitly: is this a PACE loan? And request the county assessor’s property tax bill showing any special assessment.

Solar production declines over time. Standard panel degradation is approximately 0.5% per year, meaning a 10-year-old system produces roughly 5% less than when installed. But degradation is not the only production variable — inverter efficiency, panel soiling (dust and bird debris are significant in Phoenix’s desert environment), shading from tree growth or added structures, and orientation all affect output.

Request the last 12 months of utility bills alongside the solar monitoring app report for the same period. Compare what the system is producing against what the installer originally promised. If the seller claims the system covers 85% of the home’s electricity needs but the monitoring data shows 60% production relative to consumption, that gap represents a cost the buyer will carry — not the savings the listing implies.

Also confirm the buyer’s home energy use patterns. A home with two electric vehicles charging overnight, a hot tub, and a casita will have very different consumption patterns than the single occupant household for whom the system was sized. A system that “perfectly covered” the previous owner’s usage may fall well short for a family of five with a pool and two EVs.

APS and SRP are not interchangeable, and the financial value of an existing solar system differs materially between them.

SRP’s lower export credit rate means solar systems in SRP territory typically produce less financial offset than equivalent systems in APS territory. Confirm the utility by address (not city name, as territory boundaries do not follow city lines) and ask when the system was interconnected — this establishes when the 10-year export rate lock expires. A system interconnected in 2019 has its rate locked through 2029. A system interconnected in 2014 may already be on a post-lock reduced rate.

When a solar company leases panels to a homeowner, it typically files a UCC-1 financing statement (sometimes called a fixture filing) to establish its ownership interest in the equipment. This filing appears in the title search and must be resolved before the property can transfer with clear title.

There are three ways to clear a UCC-1 on a leased solar system at closing: the buyer qualifies for and assumes the lease (the solar company updates the filing to reflect the new owner), the seller pays off and terminates the lease (the company files a UCC-3 termination statement, which should appear on the title), or the solar system is removed and the roof is restored (relatively rare, typically used when no other option exists). Buyers should ensure their escrow officer identifies any UCC filings early and confirm a specific resolution path — not just the intent to resolve — before their inspection contingency expires.

Appraisal treatment of solar systems depends entirely on ownership structure and comparable sales in the neighborhood.

Owned systems: An owned solar system is real property and can be included in the appraised value. However, the appraiser must find comparable sales of homes with owned solar systems to support a value adjustment. In West Valley submarkets where solar adoption is high, comps may exist. Where they do not, the appraiser may make no adjustment regardless of what the seller paid for the system. A $25,000 solar installation may add $5,000–$12,000 in appraised value — or zero. The gap between installation cost and appraised value is a seller expectation problem, not a buyer problem — but it affects the negotiation if the seller has priced the home with a full solar premium.

Leased systems: Leased systems are generally not counted in the appraised value. The homeowner does not own the asset; from the appraiser’s and lender’s perspective, the solar equipment is personal property belonging to the solar company, not a home fixture with transferable ownership. Fannie Mae, Freddie Mac, FHA, and VA guidelines all treat owned and leased solar differently, and leased systems carry no value for appraisal purposes under standard guidelines.

A solar system has two distinct warranties that buyers should document:

Panel product warranty (typically 10–25 years): Covers manufacturing defects in the panel itself. Most major manufacturers offer 25-year warranties. Confirm the manufacturer is still in business — several solar panel manufacturers have exited the market, leaving homeowners with warranty instruments that have no enforceable counterparty.

Panel performance warranty (typically 25 years): Guarantees that output does not degrade more than a specified percentage per year (usually less than 0.5%/year, or 80–90% of original output at 25 years). Request the degradation spec sheet and ask the seller for the most recent monitoring report showing actual production.

Inverter warranty (typically 10–15 years): The inverter converts DC electricity from the panels to AC current the home can use. It is the component most likely to require replacement first — and it is not typically covered by the panel warranty. A system with 13-year-old inverters on a 10-year inverter warranty is outside the warranty window. Inverter replacement costs $1,500–$4,000+ depending on the system size and type. Ask the seller for the inverter brand, model, age, and warranty documentation.

Installer workmanship warranty (typically 10 years): Covers the installation work, including roof penetrations and electrical connections. Confirm the solar installer is still in business and honoring warranties. Some Phoenix-area solar installers from the 2015–2020 boom period are no longer operating.

This is the question most buyers never think to ask — and one of the most consequential in Phoenix’s climate. Solar panel installation requires roof penetrations for mounting hardware and conduit runs. Those penetrations frequently void the original roofing contractor’s warranty or the roofing manufacturer’s warranty, because the roofing system’s integrity was altered by a party other than the original roofer.

Ask the seller: does the roof still have an active warranty? Was the original roofer notified and did they approve the solar installation? Did the solar installer provide their own roof penetration warranty, and for how long? The answers determine whether a roof problem discovered after closing is covered by anyone — or whether it is entirely the buyer’s financial exposure.

In Phoenix’s climate, a standard asphalt shingle roof lasts 12–20 years. A concrete tile roof lasts 30–50 years. If the roof is approaching the end of its expected lifespan and the warranty was voided by solar installation, the buyer inherits both the solar system and the roof replacement cost with no warranty backstop on either the roof or the penetration points. A separate roof inspection — distinct from the general home inspection — is appropriate on any solar-equipped home, particularly where the roof age is within 7 years of expected end of life.