When Eric and Jennifer Martin installed solar panels on their home back in 2016, it seemed like a good plan. They signed a 20-year lease with a company called Solar City, now owned by Tesla.
The Martins, who are disabled and live on a fixed income in Haslet, recently decided to sell their home to pay for future medical bills. That sale would include the solar panels.
The investor lined up to purchase the property had a caveat: He will purchase the home only if the solar panels are off. And with 14 years left on the lease, the solar company refuses to remove them, even if Eric, a 42-year-old veteran, pays the whole lease in advance.
Now, almost two years since they put the house on the market, the sale is still paused – and the solar panels remain on the Martin home.
“I understood it was going to be 20 years, but I didn’t understand that it would be a lease. They never said that once,” Eric Martin said. “If I had known it was going to be as much of a hassle as it is trying to get them off, I definitely wouldn’t have gotten them.”
For the Martins, the solar system proved beneficial to their electric bill. But with the monthly payments due on the lease, their total cost still remained about the same.
“I think the most I’ve ever had with electric with (the panels) on there would be $70 a month,” Martin said. “But you still had your monthly payment, which is still $151. So you’re still looking at 200 and something dollars a month.”
As panels become increasingly popular, real estate agents and even solar companies are encouraging homeowners to consider the impact that installing panels could have on the potential to sell their property in the future.
The Texas Realtors Association said consumers should research and do their due diligence on whether adding solar panels to their property is the right fit for them. If solar panels are purchased outright, they can often increase a home’s value. But leased panels usually don’t add any value because a third party still owns them – not the homeowner.
Texas has had such a strong real estate market over the past few years that sellers could make the demands for buyers to keep the panels or else lose out on the house, said Russell Berry, chairman of the board at Texas Realtors.
“Now that (the) market’s changed a little bit, we’re getting into the situation where solar panels that have been installed recently are causing some issues when it does come to selling the property,” Berry said.
The main issue with leased solar panels is that if a house is sold, the system’s lease must be transferred to the next owner or remain in the current owner’s name. But if neither of the owners want the panels, that’s where issues arise.
“You have to talk about when somebody’s going to purchase the property, are they going to be able to take over that lease?” Berry said. “Are they going to be able to qualify for that loan? Is the loan going to put them in a secondary position when they get their home loan? All of those things are super, super important when talking about solar panels.”
The lease the Martins signed back in 2016 does not include any provisions about removing solar panels before the end of the lease. The lease also does not allow the renter to purchase the system at the contract’s conclusion.
Tesla did not respond to a request for comment before the publication date.
Jim Cushman, the general manager of Current Solar in Fort Worth, said leasing panels makes sense only for a small sect of potential customers. Many disabled veterans don’t qualify for solar tax credits because their federal disability payments are not counted as taxable income. Therefore, those Americans do not have the tax liability that would qualify them for a credit, he said.
The tax credits are the main mechanism that makes purchasing and installing solar panels affordable, Cushman said. If you don’t qualify, leasing may be the sole path to getting solar panels.
“For some families, (leasing) is the only way that they can actually go solar,” Cushman said. “And for some families, that can reduce their month-to-month expenses. However, things can get really complicated on the tail end if you don’t know what you’re signing up for.”
He added that leases represent a very small percentage of the overall residential solar market. While leasing was the more popular option in the early 2010s, that dynamic flipped in 2017 when solar panel ownership took over the majority of the market, according to research by GreenTechMedia.
Current Solar doesn’t offer leases because of the complications associated with a home sale, Cushman said. Customers that qualify for the tax credit will reap the benefits of either selling their solar power system as an asset on their home or reinstalling that system on a new home, he said.
“If you’re tax exempt because you’re a veteran, you’re clergy or you’re on Social Security and you don’t have the tax liability, then it might be worthwhile to look at a lease,” he said. “If you’re not in that group of people, a lease, 99 out of 100 times, is not going to make sense for you.”
As solar panels grow in popularity, the industry as a whole has remained mostly unregulated in Texas, Berry said.
“(Solar panel sellers) don’t have any kind of obligation to even mention these things when they’re signing people up. They expect people to just kind of read (the contract),” he said. “It’s an education issue and the consumer has to do their due diligence. Just because it sounds like a good deal and they’re going to lower your bills and everything. It may not be a good deal.”
The Martins remain in limbo as they continue their attempts to reach Tesla representatives, which can take hours at a time. If he or the home investor remove the solar panels themselves, Eric Martin would still be on the hook for the entirety of the lease and could be sued if he doesn’t make payments, Martin said.
Currently, Martin’s only way out of this solar panel lease is if the house goes into foreclosure. Only then would Tesla remove the panels. Unfortunately, that option is not viable for the couple, who need the money to pay their medical bills.
“If it wasn’t for the fact that we need the equity in the house for medical reasons, I’d say just let it (go into) foreclosure,” Martin said. “It’s just been a nightmare.”
Martin’s advice to people considering a solar leasing agreement? “Run.”
“If I’d known it was going to be anything like it is, I would have never once put them on my house to begin with,” he said. “Just when you think you’re getting ahead of them, you know, maybe something might work out, it all just falls apart.”
Sandra Sadek is a Report for America corps member, covering growth for the Fort Worth Report. You can contact her at sandra.sadek@fortworthreport.org or follow her on Twitter at @ssadek19.
Haley Samsel is the environmental reporter for the Fort Worth Report. Her position is supported by a grant from the Marilyn Brachman Hoffman Foundation. Contact her by email or via Twitter.
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