Buying a Home With Solar in Silicon Valley: Net Metering, Leases and What Transfers

Solar panels on a listing raise questions most buyers don’t think to ask: which net metering plan the system is on, how many years are left on it, whether the panels are owned or leased, and how that affects your loan. Here’s what transfers with a Silicon Valley home that has solar, and what doesn’t, based on the CPUC, PG&E, Fannie Mae, the IRS and the state Board of Equalization.

Net metering: find out which plan, and how long it has left

• Older systems (NEM 1.0 and 2.0). These legacy plans run 20 years from the system’s interconnection date, and PG&E says they’re tied to the system, not the owner. If the seller used 15 years, you get the remaining five.
• What can end legacy status early. Adding 1 kilowatt or 10% of capacity moves the system to PG&E’s Solar Billing Plan at its next true-up. Ask for the permission-to-operate date and confirm nothing was added.
• Newer systems (the Net Billing Tariff, often called NEM 3.0). Systems whose applications were submitted on or after April 15, 2023 earn hourly export credits that PG&E said ranged from about 2 cents to more than $2 per kilowatt-hour, depending on the month and hour. Systems connected by 2027 have their credit values set for nine years. The extra export bonus credit doesn’t pass to a buyer, so ask the utility how the rest of the plan transfers.
• City utilities have their own rules. In Palo Alto, newer systems are credited at the city’s export rate, $0.0990 per kilowatt-hour from July 1, 2026. Silicon Valley Power in Santa Clara runs its own program too.

Owned, leased or PPA: it matters for your loan

Under Fannie Mae’s rules:

• Owned panels can add value in the appraisal.
• Leased panels and power purchase agreements (PPAs) add no appraised value. Lease payments count in your debt-to-income ratio unless the lease guarantees production with prorated refunds; PPA payments based only on the power produced may be left out.
• Filings on title. A solar company’s fixture filing that ranks ahead of the mortgage has to be subordinated before closing.
• PACE financing on the panels has to be paid off at or before closing for the loan to qualify.

If the panels are leased or on a PPA, ask for the contract early and contact the provider about transferring it or paying it off.

Taxes

• The federal credit is over. The IRS says the residential clean energy credit can’t be claimed for systems completed after December 31, 2025.
• Property tax. Adding solar hasn’t counted as new construction for property tax, but that break ends when the home sells. Your assessment resets to the purchase price.

Gas, electric and two new disclosures

• New for 2026. Sellers must give an advisory that a home’s electrical panel may limit adding solar, electric heating or EV charging, and single-family sellers must disclose any limits they know of on replacing gas appliances.
• Bay Area appliance rules. The Bay Area Air Quality Management District’s zero-NOx standards apply to new water heaters under 75,000 BTU per hour starting January 1, 2027, and to new furnaces starting January 1, 2029. They’re standards for appliances sold, not a requirement to replace what a house has.
• HOAs can’t ban solar. Under Civil Code 714, restrictions that effectively prohibit solar are void, though reasonable ones are allowed.

Go deeper

Our Solar Lab checks what transfers for a specific system, and the Inspection Decoder helps you read the electrical and roof findings. For who supplies power in each city, see our guide to electricity providers.

Looking at a home with solar? Call the Boyenga Team at (408) 373-1660 or (650) 383-8606. Commissions are negotiable, and we offer bundled services, so ask us what’s included.