Solar panels are becoming increasingly common on homes throughout New Jersey. While they can help reduce electricity costs, they also introduce several considerations that buyers should understand before purchasing a home.
One of the more important things to recognize is that solar panels are not simply another component of the roof. They are part of an electrical energy system that may involve separate equipment, warranties, financing arrangements, and maintenance responsibilities.
During a New Jersey home inspection, certain visible components of a solar installation may be examined. However, there are limitations to what a standard home inspection can determine.
Here are several things buyers should understand before purchasing a home equipped with solar panels.
1. Are the Solar Panels Owned, Financed, or Leased?
This is one of the first questions buyers should ask.
Solar panels may be owned outright, financed through a loan, leased from a solar company, or operated under a power purchase agreement (PPA).
These arrangements are quite different.
When the panels are owned outright, they may be included in the sale of the property. If they are financed, buyers should determine whether the outstanding loan will be paid off before closing.
With leased panels, the solar company generally retains ownership of the equipment, and the homeowner makes payments under a contractual agreement.
A power purchase agreement is somewhat different. Instead of leasing the equipment directly, the homeowner agrees to purchase electricity generated by the solar system.
Buyers should obtain copies of all solar agreements and review the payment obligations, contract duration, annual increases, transfer requirements, and responsibilities for equipment maintenance and removal.
These are contractual and financial matters that fall outside the scope of a standard home inspection.
2. What Is the Condition of the Roof Beneath the Solar Panels?
Solar panels are commonly installed over asphalt shingle roof coverings.
One of the difficulties with inspecting a roof equipped with solar panels is that the panels conceal portions of the roof covering beneath them.
During a home inspection, accessible roof surfaces, visible flashing, roof penetrations, and other observable components are evaluated. However, the roof covering beneath the panels cannot be adequately examined.
This becomes particularly important when the roof is approaching the end of its expected service life.
Understanding the age and expected service life of the roof is particularly important when solar panels are installed.
If the roof eventually requires replacement, the solar panels may need to be professionally removed and reinstalled. This can add considerable expense to an otherwise routine roof replacement.
Buyers should determine the age of the roof, when the solar panels were installed, and whether the roof was replaced before the installation.
It is also important to determine who is responsible for the cost of removing and reinstalling the panels when roof repairs become necessary.
A relatively new solar installation over an aging roof deserves additional consideration.
3. What Does a Home Inspector Actually Inspect?
A standard New Jersey home inspection is a visual examination of accessible systems and components.
When a home is equipped with solar panels, the inspector may observe accessible electrical equipment associated with the installation, including visible wiring, conduits, disconnects, and connections to the home’s electrical system.
Visible damage, improper installation conditions, or other readily observable concerns may be identified.
However, a standard home inspection is not a comprehensive evaluation of the solar energy system.
It does not ordinarily include measuring electrical production, testing individual solar panels, determining system efficiency, or verifying the performance of the inverter and monitoring equipment.
The inspection also does not establish whether every aspect of the solar installation complies with applicable electrical and structural requirements.
A home inspection involves looking beyond the obvious conditions to understand how the various systems and components of the house work together.
Buyers who want a detailed assessment of the solar system should arrange for an evaluation by a qualified solar contractor.
4. Is the Solar System Actually Producing Electricity?
The presence of solar panels does not necessarily mean the system is operating properly or producing electricity efficiently.
Solar systems can experience reduced production due to equipment deterioration, inverter problems, damaged wiring, shading, or other conditions.
Many modern installations have monitoring systems that allow homeowners to track electrical production over time.
Buyers should request available production records and ask whether the system has experienced any operational problems.
Reviewing recent utility bills can also provide useful information about the home’s electrical costs.
However, past savings do not guarantee future performance. Electricity consumption, weather conditions, utility rates, and equipment performance can all affect the financial benefits of a solar installation.
5. Will Solar Panels Provide Electricity During a Power Outage?
This is a common misunderstanding.
Many homeowners assume that a house equipped with solar panels will continue to have electricity when the utility power goes out.
That is not necessarily the case.
Most conventional grid-connected solar systems automatically shut down when utility power is interrupted. This is an important safety feature intended to prevent electricity from being supplied back into utility lines while repairs are being performed.
A home generally needs specifically designed backup equipment, such as a compatible battery storage system and associated controls, to provide electricity during a power outage.
Some specialized solar equipment can provide limited backup power without a battery, but this capability should never be assumed.
Buyers interested in backup power should determine whether the home has the necessary equipment, how the system operates, and which electrical circuits it is capable of supplying.
6. Can Solar Panels Cause Roof Leaks?
Solar panels are typically secured to the roof structure using mounting brackets and attachment hardware.
Depending on the installation, these mounting points may require penetrations through the roof covering.
When properly installed and flashed, these penetrations are designed to remain watertight.
However, improperly installed flashing, deteriorated sealants, or defective mounting details can create opportunities for water intrusion.
Proper water management is an important part of protecting the roof and the building materials beneath it.
During a home inspection, accessible attic areas may be examined for evidence of leakage, including water staining, damaged roof sheathing, and other visible moisture-related conditions.
Keep in mind that attic insulation, finished ceilings, and concealed roof areas can limit the ability to identify leakage.
The absence of visible water staining does not guarantee that concealed areas beneath the solar panels are free from defects.
Buyers should request information concerning previous roof leaks, repairs, and warranties associated with the solar installation.
7. New Jersey Solar Panel Disclosure Requirements
New Jersey has established specific disclosure requirements concerning solar panel installations on certain single-family homes.
Under New Jersey law, P.L. 2023, Chapter 312, applicable sales disclosures address the identity of the solar installer and, when different, the company that owns the equipment or participates in a lease or power purchase agreement.
For applicable installations involving a lease or power purchase agreement, the documentation must also address whether the agreement is being transferred and include contractual documents that will become obligations of the buyer.
An important distinction is that this particular law applies to single-family homes with solar panels installed on or after January 16, 2024, subject to the law’s operative-date provisions. Other property disclosure obligations may also apply.
Buyers should have their real estate attorney review the solar documentation, including any financing obligations, warranties, transfer provisions, and agreements involving renewable energy incentives.
A home inspection evaluates accessible physical conditions. It does not determine the legal or financial obligations associated with a solar agreement.
8. What Should Buyers Request Before Closing?
When purchasing a New Jersey home equipped with solar panels, buyers should try to obtain the following information before closing:
- Documentation establishing whether the panels are owned, financed, or leased.
- Copies of any solar lease, financing agreement, or power purchase agreement.
- The original installation date and installer information.
- Available electrical permits and inspection approvals.
- The age and replacement history of the roof.
- Solar equipment warranties and transfer provisions.
- Maintenance and repair records.
- Recent electrical production records.
- Information concerning panel removal and reinstallation responsibilities.
- Confirmation of any outstanding financial obligations associated with the system.
Not every seller will have all of this documentation available. However, obtaining as much information as possible can help buyers better understand the system they are acquiring.
Solar equipment is another example of why buyers should consider the potential expenses of owning a home, not simply its purchase price.
Frequently Asked Questions About Solar Panels and Home Inspections
Do home inspectors inspect solar panels in New Jersey?
A standard home inspection may include observations of accessible electrical equipment and visible conditions associated with a solar installation. However, testing solar panel performance, electrical production, and system efficiency is outside the scope of a typical home inspection. A qualified solar contractor should evaluate the system when a more comprehensive assessment is desired.
Can solar panels cause roof leaks?
Yes. Solar panel mounting systems may involve penetrations through the roof covering. Improperly installed or deteriorated flashing and mounting details can allow water intrusion. Proper installation helps reduce this risk, but concealed roof areas beneath the panels remain a limitation during a visual home inspection.
Should I buy a house with leased solar panels?
A home with leased solar panels is not necessarily a poor purchase. However, buyers should carefully review the lease terms, monthly payments, potential annual increases, remaining contract duration, maintenance responsibilities, and transfer requirements. The agreement should be reviewed with the buyer’s real estate attorney before closing.
Final Thoughts
Solar panels can be a beneficial feature of a home, but buyers should not assume that every installation offers the same advantages or carries the same obligations.
The condition of the roof, the age of the equipment, the ownership arrangement, and the performance of the system all deserve consideration.
A thorough home inspection can provide valuable information about accessible components of the property and identify visible concerns. However, solar system performance testing and the review of contractual obligations require additional evaluation.
For anyone purchasing a home in New Jersey, understanding these distinctions before closing can help avoid unexpected expenses and misunderstandings after taking ownership.
John Martino is a Board-Certified Master Home Inspector and owner of LookSmart Home Inspections, serving Northern and Central New Jersey. Licensed since 2002, John specializes in residential home inspections, evaluating building systems, identifying safety concerns, and helping homebuyers better understand the condition of the properties they are purchasing.