What is the newest headache for seniors and their probate estates? Solar panels.
It is trendy to install solar panels on existing houses. By the time a salesperson has finished showing fancy graphs and charts about how much a homeowner will save in energy costs, and thrown about some jargon about reducing the carbon footprint, most people cannot sign the paperwork fast enough.
Types of Solar Agreements
Therein lies the problem. There are so many types of deals, varying definitions, and non-standard terms that many solar agreements are either incomprehensible or sorely lacking in details.
Solar Panel Installation Contracts
For example, take solar panel installation contracts. They fall primarily into 3 categories, all dealing with payment.
In the first category, a buyer can purchase the panels and pay the entire cost up front. When the panels are installed, they become a fixture of the house. This type of transaction has the least complications for a senior or a probate estate because the panels are sold when the house is sold.
In the second category, a buyer can finance the purchase of the panels. The solar panel company usually places a lien on the property. This type of transaction is more difficult because the underlying note must be either paid off or assumed by the buyer when the house is sold. There may be other requirements that the solar panel company has that must be satisfied.
In the third category, a buyer can lease the panels. This is the most troublesome transaction to manage. A buyer of the property must negotiate with the solar panel company to assume the lease, or the lease must be paid off by the seller. Because it is not unusual for the leases to be 20 or 25 years long, the buy-out can be substantial.
Solar Power Purchase Agreements (SPPA)
There are also solar power purchase agreements. Some of these agreements provide that the company will own the solar panels and the homeowner agrees to pay for the energy produced by their system. The homeowner is obligated to keep the solar system on their roof for a period of years. The agreement may also limit how the electricity can be used and could include escalation clauses that allow the energy costs to increase every year. These agreements can be difficult to transfer to new owners.
Understanding Your Solar Panel Contract
Evaluating the contracts can be daunting. The Department of Energy recommends that homeowners understand their total electricity usage and how to optimize energy efficiency before they sign a solar system contract. There are online tools to determine a home’s suitability for solar panels and to get a home energy audit. Solar rebates, credits, HOA rules, and incentives vary by locale in Texas, making it difficult for homeowners to know if they are getting accurate information or the best deal.
For seniors, solar panel contracts are especially challenging. It often makes no sense for an 80-year-old to enter a 25- year lease for solar panels or a 20-year contract to purchase solar power, yet those types of contracts continue to be pitched.
Texas passed SB 398 in the 87th legislative session to provide that companies must make some required disclosures to homeowners. Chapter 113 of the Texas Business and Commerce Code addresses sales and leasing of distributed renewable generation sources. Chapter 229 of the Texas Local Government Code addresses what types of installations municipalities can restrict.
Required disclosures, however, only go so far. No one, especially a senior, should enter into a contract involving solar panels before carefully reading and understanding it.
Hammerle Finley Can Help With Your Legal Needs
Virginia Hammerle is in her fourth decade of practicing law. She is Board Certified in Civil Trial by the Texas Board of Legal Specialization and an Accredited Estate Planner. Contact her at email@example.com or visit www.hammerle.com. This column does not constitute legal advice.