Short answer: it depends on which of three paths the purchase contract puts the PPA on, and you should know which one before you sign the assignment. A solar power purchase agreement stays with the house unless somebody pays the provider to end it. So on an off market deal in Maryland the PPA is either assumed by the buyer at closing, prepaid or bought out from the seller's proceeds, or bought out by you after closing as part of the rehab budget. Each path changes your number. This article walks through all three, what shows up on title, and how to think about it when the exit is a retail resale.
What is a solar PPA and why does it matter on a flip?
A solar PPA is a contract where a third party owns the panels on the roof and the homeowner agrees to buy the power those panels make at a set rate per kilowatt hour, usually for 20 to 25 years, often with an annual escalator. The homeowner never owns the equipment. A solar lease is the cousin: a flat monthly payment instead of a per kilowatt hour rate, same ownership setup. The Maryland Energy Administration says it plainly: with a lease or PPA the solar company owns the system, your payments can rise over time, and the state and federal incentives mostly go to people who bought their system outright.
For a flipper that matters in two places. First, the provider records a security interest against the property, so title is not clean until it is dealt with. Second, your retail buyer at the end of the flip has to be approved to take over the contract, and plenty of them walk when they see a second monthly bill on a roof they did not choose. The spread you underwrote on a 1990s colonial in Bowie or a split level in Glen Burnie can shrink by the buyout cost if nobody priced it in.
Do I have to assume the PPA when I buy the house?
No. Assuming it is the default, but it is one of three ways the contract can be handled, and the purchase contract decides which. Here is how they compare for a cash buyer who plans to resell within a year.
| Path | Who pays the provider | What you get at closing | Fit for a flip |
|---|---|---|---|
| Assume the PPA | Nobody up front. You take over the monthly bill. | House plus a contract you must transfer again at resale. Credit check on you. | Weak. You carry the bill through the rehab and face the transfer twice. |
| Seller prepays or buys out before closing | Seller, from sale proceeds on the closing statement. | Panels stay, contract ends or is prepaid, fixture filing released. | Best. Clean title, owned panels, no second bill for your retail buyer. |
| You buy it out after closing | You, as a rehab line item. | House with the contract still attached until the provider cashes your check. | Workable if the quote is in writing before you sign and the price reflects it. |
Providers usually offer two numbers. A prepayment is the remaining power payments discounted to today, often called net present value. A buyout is the fair market value of the equipment, sometimes set by an appraiser the provider picks. On a system that is ten years in, the buyout can run well into five figures, which is why it has to be a line in the deal, not a surprise at the table.
How does a solar PPA show up on title in Maryland?
It shows up as a UCC fixture filing in the land records of the county where the house sits, and the title company will treat it like a lien until it is released or assigned. Solar systems are fixtures under the Uniform Commercial Code, and Maryland routes fixture filings to the circuit court clerk for the county of the real property instead of the normal state filing, per the SDAT instructions for Maryland UCC filings. So a title search in Anne Arundel, Howard or Prince George's County pulls it up next to the deed of trust.
The provider will say the filing covers only the equipment, not the house, and on most contracts that is true. Read the collateral description anyway. Then plan for the paperwork lag: transfer and release departments at the big providers routinely need two to four weeks, and a 30 day close with a PPA on it needs the request sent the week the contract signs.
I'm flipping it. Which option is best for the resale?
Owned panels with the contract gone, every time. Your retail buyer is almost always financing, and a lender reviewing a PPA on the property wants to see that the filing covers only the solar equipment and that the buyer qualified for the transfer. That is extra underwriting friction on a sale you want to close in 30 days. An owned system with no filing is just a roof feature. Here is the order of operations we use when a house we sign has one.
- Get the contract. Provider name, start date, term, rate per kWh, escalator, and the transfer and buyout clauses. The seller has it or the provider will email it with the seller on the request.
- Pull the fixture filing. The title company can pull it from the county land records with the title order. Confirm the collateral is the equipment only.
- Request both quotes in writing. Prepayment and buyout. Ask whether the panels stay with a manufacturer warranty after a buyout, since monitoring and service usually end when the contract does.
- Decide who pays. If the seller is paying, it goes on the closing statement and the release is a condition of closing. If you are paying, add it to the rehab line and compare the total to the comps.
- Price the resale without the panels. Run the four comps as if the roof were bare. If owned panels get you a little more from a retail buyer, that is cushion, not basis.
One more variable that is specific to this market. Maryland houses on PPAs signed from about 2012 to 2018 are the ones hitting the off market pipeline now, through estates, tired landlords and pre foreclosure. Those systems are mid contract, the escalators have compounded, and the buyout quotes are at their least friendly. A house in Columbia with a 2015 PPA is a different underwriting problem than one in Dundalk with panels the owner paid cash for, even if the roofs look the same from the street.
How this works on an Old Line deal
When a house on the list has a PPA, ask us which path the contract is on before you sign the assignment. We would rather tell you by text that the seller is buying it out from proceeds, or that it is being assumed and the quote is such and such, than have you find a fixture filing in the title commitment ten days before close. Every PPA and every provider is different, so the dollar figure for a specific house is a phone call, not a page on this site. The package on every deal carries the price, resale band, rehab line and four comps, and you can see what is under contract right now on the current deals page. Questions about a house you are underwriting go to Sebastian by text or email.
Questions buyers ask about PPA houses
Can the PPA company stop my closing?
Not directly, but their fixture filing on the land records will stop the title company from issuing a clean policy until it is released or formally assigned. Treat the provider like a lienholder with a slow mailroom and start the paperwork the day you sign.
Will the panels add value when I resell the flip?
Owned panels usually help a little. A PPA or lease the buyer must assume usually hurts, because the retail buyer sees a second monthly bill and a credit check. Price the resale as if the panels were not there, and treat anything above that as a bonus.
What if the seller stopped paying the PPA?
Arrears follow the contract, not the deed, but the provider will not release or transfer until they are paid. Ask for a payoff letter that includes past due amounts and have the title company pay it from the seller side of the closing statement.