El Paso is one of the best cities in the country for solar energy, receiving over 300 days of sunshine and ranking among the highest for solar irradiance in the continental United States. As a result, thousands of El Paso homeowners have installed solar panel systems over the past decade, and a growing number of homes hitting the market now come equipped with rooftop solar. But selling a home with solar panels introduces complexities that both sellers and their brokers need to understand. ProGen Real Estate helps solar-equipped homeowners navigate these issues to maximize their sale price and minimize closing complications.
Owned vs. Leased: The Critical Distinction
The single most important factor in selling a home with solar panels is whether you own the system outright or have a solar lease or power purchase agreement (PPA). This distinction fundamentally changes the dynamics of your sale. Owned systems are an asset that adds value to your home. Leased systems are an obligation that transfers to the buyer and can complicate or even derail a transaction.
If you purchased your solar system with cash or financed it with a solar loan that you have paid off, you own it free and clear. The system is a permanent improvement to the property, like a new roof or a swimming pool, and it conveys with the home at sale. If you financed with a solar loan that is not yet paid off, the loan balance must be satisfied at closing — either paid off from sale proceeds or refinanced. Either way, the panels transfer to the buyer as owned equipment.
Selling with a Solar Lease or PPA
Solar leases and PPAs are more complicated. Under a lease, a third-party company owns the panels on your roof and you pay a monthly fee to use the energy they produce. Under a PPA, the third party owns the panels and sells you the electricity at a set rate per kilowatt-hour. In both cases, the panels are not your property — they belong to the solar company, and the agreement has a term of 15 to 25 years.
When you sell, the buyer must either agree to assume the lease or PPA, or you must buy out the remaining contract balance. Lease assumptions require the buyer to qualify with the solar company, adding another approval step to an already complex transaction. Some buyers — particularly those using VA or FHA financing — may have difficulty qualifying or may not want the additional monthly obligation. The lease payment, even if modest, affects the buyer's debt-to-income ratio and can impact their loan qualification.
If the buyer is unwilling or unable to assume the lease, your options are limited. You can buy out the lease, which often costs $10,000 to $25,000 depending on the remaining term and system size. You can negotiate a partial buyout with the solar company. Or you can have the solar company remove the panels, which leaves you with a roof that may need repair where the mounting hardware was attached. None of these options are ideal, which is why solar leases are generally viewed as a complication rather than a selling point.
How Solar Panels Affect Home Value
Studies by the Lawrence Berkeley National Laboratory and the Appraisal Institute have found that owned solar systems add measurable value to homes. The most cited figure is roughly $20 per watt of installed capacity, which translates to $10,000 to $16,000 in added value for a typical 5 to 8 kilowatt residential system. However, this premium varies by market, system age, and whether the local appraiser knows how to properly value solar equipment.
In El Paso, the value-add for owned solar systems is real but not always fully captured in appraisals. The challenge is finding comparable sales — homes with similar solar systems that sold recently in the same neighborhood. Without good comps, appraisers may undervalue or entirely ignore the solar contribution. To maximize the appraised value, provide the appraiser with documentation of system specs, installation cost, warranty terms, historical energy production data, and electricity savings. The PV Value tool, endorsed by the Appraisal Institute, can help generate a credible value estimate for your system.
Marketing Your Solar-Equipped Home
When listing a home with owned solar panels, make the solar system a featured selling point. Include the system size in kilowatts, the estimated annual energy production, the average monthly electricity savings, the age of the system and remaining warranty period, and whether a battery storage system is included. El Paso buyers are increasingly energy-conscious, and the prospect of dramatically reduced electric bills — especially during summer months when cooling costs peak — is genuinely attractive.
For homes with solar leases, transparency is critical. Disclose the lease terms, monthly payment, remaining contract duration, and the process for assumption. Hiding or downplaying the lease will backfire when the buyer's lender discovers it during underwriting. Being upfront allows your broker to identify and focus on buyers who are comfortable with lease assumptions, saving time for everyone involved.
Buyer Concerns and How to Address Them
- Roof condition — buyers worry about panel removal and reinstallation if the roof needs replacement; provide documentation of roof age and condition, and confirm that the solar installation warranty covers roof penetration damage
- System age and remaining life — most solar panels are warrantied for 25 years and maintain 80 percent or more of original production capacity; provide the original warranty documentation
- Maintenance requirements — solar panels require minimal maintenance in El Paso; occasional cleaning to remove dust buildup is the primary need, especially after dust storms
- Electric bill history — provide 12 months of utility bills showing actual electricity costs with the solar system; this is the most powerful evidence of the system's value
- Inverter lifespan — string inverters typically last 10 to 15 years while microinverters last 20 to 25 years; if the inverter is near end of life, budget for replacement or pre-pay replacement as a selling incentive
Appraisal and Financing Considerations
Lenders and appraisers are becoming more sophisticated about solar, but gaps remain. Conventional loans generally handle owned solar systems without issue — the panels are treated as a permanent fixture and included in the appraisal. FHA loans are similar. VA loans through Fort Bliss also accommodate owned solar, though the VA appraiser must determine the contributory value independently.
For leased systems, lenders will evaluate the lease payment as a recurring obligation in the buyer's debt-to-income calculation. VA lenders in particular may scrutinize the lease terms carefully. If the monthly lease payment is $150 and the buyer's qualifying margin is tight, the lease could reduce the loan amount the buyer qualifies for. Working with a lender experienced in solar transactions is important for both the buyer and the seller.
El Paso Solar: A Strong Selling Point When Handled Right
In a city where summer electricity bills can easily exceed $300 per month for homes without solar, a well-maintained owned solar system is a genuine asset that attracts buyers and supports a higher sale price. The key is proper documentation, transparent disclosure, and working with a broker who understands how to market and transact solar-equipped properties. ProGen Real Estate — TREC #619091 — has experience guiding sellers through solar transactions, from listing strategy through closing. Call Josue R. Jimenez at (915) 691-1082 to discuss how to position your solar-equipped home for maximum value.