I bought a house with ‘free’ solar panels. Now a lender says I owe $45,000 on a debt I never agreed to

Rooftop solar panels can often be an attractive selling point for homebuyers. They promise relief from the costly, traditional electric grid while striking a blow for sustainable energy.

Though those sun-soaking panels might be generating clean energy and lower utility bills, here’s a reminder for homebuyers: when a listing promises “free solar,” it’s worth digging deeper before taking that claim at face value.

Consider the case of a young couple who bought their home about a year and a half ago, when the solar panels were pitched as a perk. The Zillow listing led with all caps:

“FREE SOLAR PANELS!!!!”

Their agent repeated the claim. Nothing in the closing paperwork suggested otherwise.

They assumed the panels were simply part of the house, no different from the flooring or built-in appliances included in the sale. The purchase contract referenced “existing improvements and fixtures,” and no solar loan or lease was disclosed. They closed, moved in and didn’t think twice.

That all changed months later.

According to SolarReviews, solar power now accounts for more than 160 gigawatts of energy capacity in the U.S., underscoring solar’s growing role in the power grid (1).

More than 4.7 million homes have solar panels, with California, unsurprisingly, leading the nation in installations.

The issue for our homeowners surfaced during a routine mortgage refinance. The lender asked for proof that the solar panels were owned outright. The couple couldn’t provide it because they’d never been given any documentation related to the system.

Their contract didn’t specifically list solar panels as personal property, and the disclosures were silent on financing. When they contacted the solar company, they learned the system had been installed in 2020 and financed by the original homeowner through a third-party lender. That owner had since died.

The lender refused to share details without the account holder’s permission, which was impossible to obtain. Even so, the refinance went through.

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Weeks later, the couple received mail addressed to the deceased former owner. One envelope, from the solar lender, showed an overdue balance of roughly $12,000 and a remaining principal north of $45,000. That’s when alarm bells went off.

Most residential solar loans are either unsecured or secured personal loans, meaning the obligation is tied to the borrower’s credit, not automatically to the property itself (2). Homeowners are often surprised to learn they’re not automatically responsible for a solar loan they never agreed to assume.

Here, the lender has never contacted the couple, never demanded payment, and continues billing the deceased owner. No lien appeared during two separate closings.

That strongly suggests the couple isn’t on the hook for the debt and that the lender’s ability to pursue them is limited.

Ownership of the panels can be a gray area because the lender retains a security interest until the loan is paid off. In practice, repossession is rare because used panels have little resale value and removing them is costly and complex (3).

As solar installations become more common, these loan situations are, too. According to EnergySage, the average residential solar system costs nearly $30,000 before incentives (4), often financed over 15 to 25 years. When those contracts aren’t clearly disclosed, buyers can inherit confusion, if not outright risk.

Homeowners who discover surprise solar debt generally shouldn’t rush to pay or engage with the lender. Doing so could imply acceptance of the loan. Instead, experts recommend confirming whether a lien exists, preserving documentation showing the panels are paid off, and consulting a real estate attorney if a lender ever asserts a claim.

This situation likely could have been avoided with clearer disclosures and written proof at closing. Solar panels may be home improvements, but they’re often tied to complex financial contracts that deserve the same scrutiny as a mortgage.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Solar Reviews (1); Greenridge Solar (2); Arizona Senior Citizen’s Law Project (3); Energy Sage (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.