A Homebuyer’s Comprehensive Guide to Solar Panel System Due Diligence

Purchasing a home with an existing solar panel system offers both environmental benefits and potential energy savings. However, it’s vital to conduct thorough due diligence to ensure you’re making a sound investment. This comprehensive guide provides detailed steps and insights into evaluating a home’s solar panel system.

1. Understand the Role of Building Science Companies

Building science companies specialize in evaluating the efficiency and performance of solar panel systems. They often use advanced tools, such as drones equipped with infrared cameras, to conduct energy audits and inspect solar panels. As a buyer, considering a consultation with a building science company can provide you with a detailed analysis of the solar system’s condition and performance. They can assess if the panels are producing energy as expected under various weather conditions and identify any underlying issues.

2. Assessing Solar Panel Performance

It’s crucial to assess the solar panels’ performance, especially in areas with high solar irradiance. Solar panels should operate efficiently, and any underperformance can be a sign of malfunction. During inspection, look for consistent coloring and temperature across all panels. Variations can indicate damaged or inefficient panels. An infrared analysis can be particularly revealing, showing hot spots or inconsistencies invisible to the naked eye.

3. Review the Solar Contract

Thoroughly review the solar contract for terms related to projected production and actual output. Discrepancies between these figures can indicate issues with the system. Ensure the contract is clear on the expected energy production and compare this with actual output data from utility bills or monitoring systems.

4. Physical Inspection for DamageConduct a thorough physical inspection of the solar panels for any signs of damage, such as cracks or breaks, which are often caused by environmental factors like hail or debris. Even small damages can significantly impact the system’s efficiency. Request high-resolution photos or drone imagery for a closer look at each panel.

5. Analyzing Energy Audit and Utility Bills

An energy audit can provide a clear picture of the solar system’s performance. Request recent utility bills to analyze the energy production and consumption figures. Compare these with the projections made at installation. This helps in understanding if the system is adequately meeting the home’s energy requirements.

6. Lease vs. Ownership Clarification

Clarify whether the solar panels are leased or owned. Leased solar panels come with ongoing payments and specific contract terms, while owning them outright may offer more financial benefits and control. Understand how either scenario will impact your long-term costs and responsibilities.

7. Maintenance History and Warranty Check

Inquire about the maintenance history and warranty of the solar panels. Regular maintenance is key to their longevity and efficiency. Check if the warranty is still valid, if it’s transferable, and what aspects of the system it covers.

8. Impact on Home Insurance

Ensure the solar panel system is covered under your home insurance policy. Some policies might cover the cost of removing and reinstalling the panels if roof repairs are needed, while others might not. This can have significant financial implications given how much hail the Denver metro area receives and the frequency with which roofs are replaced locally.

9. Negotiating Repairs with the Seller

Ideally, any repairs or replacements of damaged panels should be the seller’s responsibility. Ensure that these issues are resolved before closing. Accepting concessions for repairs can lead to future challenges and uncertainties if the installation company is no longer in business or if replacement panels are no longer in production.

10. Selecting a Reliable Solar Company for Repairs

If repairs or replacements are necessary, seek recommendations for reputable solar companies. Conduct thorough research, checking for reviews and past work before making any decisions. Avoid companies that require large upfront payments and ensure transparency in their pricing and services. Verify with your installer that working with a third-party won’t void the warranty.

Conducting due diligence on a home’s solar panel system is a critical step in the home buying process. This guide provides a roadmap to evaluate and understand the system’s condition, performance, and financial implications and was drafted following a conversation with the experts at E3Power, a Denver building science company that can perform a solar panel evaluation during the inspection period. Remember, seeking advice from solar energy experts and real estate professionals can provide additional insights and help you make an informed decision. Your due diligence will contribute to a rewarding and sustainable living experience in your new home.