A funded solar agreement does not travel with the roof by itself. Here are the three ways it ends up at sale, what a buyer’s lawyer will ask for, and the four clauses worth settling before you sign rather than at settlement.
Most people ask this question about two weeks too late.
The system went on the roof four years ago. It works, nobody thinks about it, and then the site goes to market and a buyer's lawyer asks for a copy of the solar agreement. Now it matters, and now there is a settlement date attached to it.
The answer is simpler than it feels, as long as you know it before you need it. A funded solar agreement does not travel with the roof by itself. It is a contract between a provider and a party, and at sale it has to be dealt with deliberately: passed to the buyer, paid out, or priced into the deal.
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Send us your bill →Two structures cover most funded solar in Australia.
A solar power purchase agreement (PPA). A provider owns the system on your roof. You buy the power it makes at an agreed rate for an agreed term.
A solar lease or equipment finance. You make regular payments for the system over a term, and ownership usually sits with you or passes to you at the end.
Either way, there is almost always a second document underneath the first: a site licence or access agreement that gives the provider the right to come onto the property, install the system, and get to it for the life of the agreement. That document is the one that touches the land, and it is the reason a sale is not just a billing change.
Our own model is called Total Care. We fund the system, build it and run it, and you pay a fixed rate for the power over a term of 10 to 25 years. There is no upfront capital outlay, fees apply, and it is subject to credit assessment and contract terms. If you are comparing offers rather than reading your own, our guide on how to compare commercial solar PPA providers sets out the ten rows worth putting side by side.
1. The buyer takes it on. The agreement is transferred, usually by novation, which means the buyer steps into the seller's position and the seller steps out with no tail. Assignment is the other route, and it is not identical: an assignment can leave obligations behind. The provider's consent is normally required either way, and a provider with its own financing behind the system may need its financier's consent too.
This is the usual outcome where the system is doing its job, because the buyer is acquiring a building with cheaper power already attached.
2. The seller exits early. The agreement is terminated and paid out before settlement, so the building changes hands clean. What that costs depends entirely on the exit terms, which is why question two below is the one worth asking first.
3. Nobody deals with it, and the price deals with it instead. The buyer discovers the agreement in due diligence, does not want to inherit it, and reduces the offer or asks for an undertaking. This is the expensive version of the same conversation.
The one thing that does not happen is the agreement quietly disappearing at settlement.
None of this is unusual. It is just a list, and it goes faster when the seller has it ready.
Every one of these is easier to answer at signing than at sale. Ask them of any funded solar agreement, including ours.
1. Can the agreement be transferred to a new owner or occupier, and whose consent is needed?
Get the answer in the contract, not in an email. Ask whether consent can be withheld, and on what grounds.
2. What does it cost to get out early, and how is that figure calculated?
A number you can work out yourself is worth far more than a number someone else works out later. Ask for the formula and a worked example at year five and year ten.
3. What is registered, and where?
Against the property, against the company, or both. Ask for the registration details so they can go in the data room on day one.
4. What has to be disclosed to a buyer, and who prepares it?
Disclosure obligations on a sale vary by state and by contract. The practical question is who assembles the pack, and how long they need.
Your lawyer should read the actual agreement. This is general information about how these contracts normally work, not legal advice, and no two agreements are worded the same.
A building with solar on it is usually a better building. Just price what you are inheriting.
Where the party paying for power is not the party that owns the building, there is a third seat at the table from the start. A tenant cannot grant long-term access to a roof it does not own, and a landlord has no reason to agree to anything that complicates a future sale unless somebody asks early.
For clubs and not-for-profits the same logic applies to the board rather than the lease: the people who will be in the chairs in year twelve are not the people signing in year one, so the transfer and exit terms are part of the board paper, not the fine print.
Transfer, early exit and what gets registered are all dealt with in the Total Care agreement, and we will walk you through those three clauses before you sign rather than after you have accepted an offer. That is the conversation we would want a buyer to hear us having with a seller.
Ask us for them by name, in writing, and ask the same of anyone else you are comparing. A provider who will put the transfer clause and the exit method in front of you at the start is telling you something about the next fifteen years.
A funded solar agreement is a long contract attached to a building you might not own forever. That is not a reason to avoid one. It is a reason to read four clauses before you sign instead of after you have accepted an offer.
If you want to know what your own site would do on its own numbers first, the bill is the place to start.
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Does a solar PPA transfer automatically when I sell the building?
No. The agreement is a contract, and it has to be dealt with as part of the sale. It is usually either novated to the buyer, which puts them in your position, or terminated and paid out before settlement. The provider's consent is normally required.
Can a buyer refuse to take over the solar agreement?
Yes. That is why the transfer and exit terms matter. If a buyer will not take it on, the realistic options are paying it out before settlement or dealing with it in the price.
Is the solar system part of the property?
Not necessarily. Where a provider owns the system, the agreement and the site licence are usually written so the equipment stays the provider's property, and that interest is commonly registered on the Personal Property Securities Register. Your lawyer should check what has been registered on your site.
What should I ask before I sign a funded solar agreement?
Four things: whether it can be transferred and whose consent is needed, what an early exit costs and how that is calculated, what is registered and where, and what has to be disclosed to a future buyer.
Does this apply to a solar lease or equipment finance as well?
The structure differs but the questions are the same. A lease or finance contract still has a term, an exit cost and a transfer clause, and it still shows up in due diligence.
This is general information about how funded solar agreements normally work in Australia, not legal advice. Terms vary between providers and no two agreements are worded the same, so your lawyer should read the actual contract and advise on your own circumstances.
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