Riverside County: How to Buy a Home With Solar Panels Without Inheriting a Bad Deal (October 2026)

Drive any street in Corona, Menifee, Temecula, Murrieta, Eastvale or the Coachella Valley and you will see rooftop solar on a large share of homes. For a buyer, those panels can be a real asset or a 20-year bill you never agreed to. The difference comes down to three questions: who owns the panels, which utility billing plan the system is on, and what paperwork transfers to you at closing.

The timing matters this year. The federal 30% Residential Clean Energy Credit is gone for anything placed in service after December 31, 2025, and California's property-tax exclusion for newly installed active solar systems becomes inoperative on January 1, 2027, 69 days from today. Meanwhile Riverside County has more homes on the market than buyers can absorb quickly, which gives you room to ask hard questions about the solar before you sign.

Riverside County market snapshot (September 2026)

Source: Realtor.com Residential Data, county core metrics file (month 202609, FIPS 06065).

The 30-year fixed rate averaged 7.32% in Freddie Mac's Primary Mortgage Market Survey for the week of October 22, 2026. On the median $629,000 home with 20% down ($125,800), the $503,200 loan carries principal and interest of about $3,457 a month. Add property tax at the 1% base rate (about $524 a month, before local voter-approved charges and any Mello-Roos) and you are near $3,981 before insurance.

How to run that payment yourself: monthly payment = L x r / (1 - (1 + r)^-n), where L is the loan amount, r is the annual rate divided by 12, and n is 360 months.

With 62 days on market and about one listing in six already cut, sellers in Riverside County are negotiating. Solar is one of the best places to negotiate, because many sellers do not know exactly what they signed either.

Step 1: Find out who owns the panels

Everything else depends on this. There are four common setups:

How to do it:

1. In your first written questions to the listing agent, ask: "Are the solar panels owned, financed, leased, or under a PPA? Please send the contract, the payoff letter if financed, and the transfer packet if leased."
2. Ask for the most recent 12 months of utility bills and the solar company's production history (most systems have a monitoring app the seller can export from).
3. Ask your title officer to flag any UCC-1 fixture filing recorded against the property. A solar company or lender often records one to put the world on notice that it owns or has a claim on the equipment.

Step 2: Check which billing plan the system is on

This is the most overlooked number in a solar home. California's investor-owned utilities, including Southern California Edison, moved new solar customers to a different billing plan in 2023.

• NEM 2.0 (older systems). Southern California Edison closed NEM 2.0 to new customers on April 15, 2023. Existing NEM accounts keep billing under NEM for 20 years from the system's original permission-to-operate (PTO) date. The 20-year clock runs from that original date, not from the date you buy the house.
• Net Billing Tariff, called the Solar Billing Plan by the utilities. Customers applying for interconnection since April 15, 2023 are on this plan. The CPUC explains that exported power is credited at a rate reflecting its value to the grid, which is "usually lower than the retail rate" but "can rise above the retail rate on late summer evenings." The plan requires a specific time-of-use rate (TOU-D-PRIME for SCE), bills monthly, and pairs best with a battery. The CPUC also states that the nine-year legacy period is guaranteed to "the original customer" who interconnected the system.

Why it matters: a system on NEM 2.0 generally produces more bill savings per panel than a similar system on the Solar Billing Plan without a battery. A 2018 NEM 2.0 system still has its plan until about 2038. A 2024 system without a battery may save noticeably less.

How to do it:

1. Ask the seller for the PTO letter from the utility (or the PTO date shown in the solar contract).
2. Look at a recent bill. It will show the rate plan (for example TOU-D-PRIME) and whether the account is NEM or Solar Billing Plan.
3. Check which utility serves the address. Most of the county is Southern California Edison, but the City of Riverside has its own municipal utility, Riverside Public Utilities, and parts of the Coachella Valley are served by the Imperial Irrigation District. Municipal and irrigation-district utilities set their own solar rules, so call them directly.

Step 3: If it is a lease or PPA, read the contract like a loan

When panels are third-party owned, you are taking over someone else's long-term contract. Fannie Mae's Selling Guide (B2-3-04) spells out how most mortgage lenders treat it:

• The lender must obtain and review the lease or PPA.
• The monthly lease payment must be counted in your debt-to-income (DTI) ratio, unless the lease delivers a set amount of energy for a fixed payment and includes a production guarantee that compensates you if the panels underproduce. PPA payments based solely on the energy produced may be excluded from DTI.
• Leased or PPA panels cannot be counted in the appraised value.
• The contract must make the solar company responsible for roof damage from installation, malfunction, defects or removal.

How to read the contract:

1. Find the monthly payment today and the annual escalator, if there is one (the yearly percentage the payment rises).
2. Find the remaining term and the end-of-term options (buyout, renewal, removal).
3. Find the transfer requirements: credit check, fees, and how long approval takes. Start this the day you open escrow.
4. Find the production guarantee and how you get paid if output falls short.
5. Find the removal-and-reinstall terms. If you ever need a new roof, someone has to pay to take the panels off and put them back.

Example of what an escalator does (example values, not a real contract): a $150 lease rising 2.9% a year reaches about $258 a month by year 20, and adds up to about $47,900 over 20 years.

Step 4: Run the qualifying math with the solar payment included

A lease payment counts against you almost like a car payment. Here is how it changes the numbers on the Riverside County median home.

Example buyer (example values): $13,000 gross monthly income, $500 a month in other debts, buying the $629,000 median home with 20% down at 7.32%.

Insurance, HOA dues and any Mello-Roos would push all three rows higher, so plug in your own figures.

Another way to see it: at 7.32%, a $150 monthly lease uses up the same budget as about $21,800 of mortgage. A $200 lease is about $29,100, and $250 is about $36,400. If you are close to your lender's DTI limit, a solar lease can shrink the price range you qualify for.

How to do it:

1. Give your lender the lease or PPA early, before you write an offer if the listing discloses it.
2. Ask the lender to run your approval both with and without the solar payment.
3. If the seller has an open solar loan, ask for a payoff letter. As an example (example values), a $30,000 balance at 7.99% over 20 years costs about $251 a month. Make sure it is paid off at or before closing, not passed to you.

Step 5: Use the solar to negotiate

In a market where 17.0% of listings have already been cut and the median home sits 62 days, you can make the solar part of the deal.

What to ask for:

1. Owned panels: ask for the installer warranty, inverter warranty and any roof-penetration warranty to be transferred, plus a recent inspection by a solar technician if the system is more than about 10 years old. Inverters often wear out before panels do.
2. Financed panels: require payoff at or before closing as a written term of the contract, and ask title to confirm any UCC-1 is released.
3. Lease or PPA: ask the seller to buy out the lease before closing, or to credit you toward the payments, or to prepay a portion. If the lease is above-market, say so and attach the numbers from Step 4.
4. Any solar home: make the contract contingent on your review and approval of the solar documents and, for a lease, on the solar company approving the transfer.
5. Roof: have your home inspector look at the roof under and around the panels. If the roof needs replacement soon, price the panel removal and reinstall into your offer.

Step 6: Know the tax rules that changed

• Federal credit is over for new installs. The IRS states that the 30% Residential Clean Energy Credit applies to property "installed anytime from 2022 through December 31, 2025" and "is not available for any property placed in service after December 31, 2025." If you buy a home and then add panels in 2026, do not count on that credit.
• California solar property-tax exclusion ends for new installs on January 1, 2027. The Board of Equalization's Letter to Assessors 2026/034 (September 1, 2026) says the exclusion "will become inoperative" on January 1, 2027, and that systems already excluded "will remain excluded from property tax until the property changes ownership."
• What that means when you buy a resale home: your purchase is a change in ownership, so the home is reassessed at your purchase price under Proposition 13, panels included. The seller's exclusion does not carry over to you.
• Buying a brand-new home with solar from a builder: the first buyer can claim the exclusion with form BOE-64-SES, if the builder did not already receive it. Starting January 1, 2027, that claim must be filed within three years of the purchase to be timely. Ask your escrow officer for the form at closing and file it with the Riverside County Assessor.

Mistakes to avoid

• Assuming the panels are owned because the listing says "solar." Always get the contract.
• Waiting until the last week of escrow to apply for the lease transfer.
• Letting a seller's open solar loan or UCC-1 filing ride through closing.
• Comparing your future electric bill to the seller's NEM 2.0 bill when your own account may be on a different plan.
• Signing a new solar contract after you move in without reading the CPUC's Solar Consumer Protection Guide first.

Your solar-home checklist

1. Ownership type confirmed in writing (owned, financed, lease, PPA)
2. Contract, payoff letter or transfer packet received
3. 12 months of utility bills and production data
4. PTO date and billing plan (NEM 2.0 or Solar Billing Plan) confirmed
5. Serving utility confirmed (SCE, Riverside Public Utilities, IID or other)
6. Lender has run your DTI with the solar payment
7. Title report checked for UCC-1 filings
8. Warranties listed and transferable
9. Roof inspected around the panels
10. Solar contingency and any seller credit written into the offer
11. BOE-64-SES on file if you are the first buyer of a new home with solar

What this means day to day

For a family in Murrieta or Indio, summer air conditioning is the biggest bill of the year. A well-placed, owned system on NEM 2.0 can make that bill much smaller for years to come. A leased system with a 2.9% escalator and a weak production guarantee can leave you paying the solar company and the utility at the same time. Read the contract before you fall in love with the kitchen.

Talk to Choice of America

If you are looking at a Riverside County home with solar, we will request the contract, read it with you, and build the solar terms into your offer. See our Riverside County page at https://choiceofamerica.com/riverside-county-real-estate.html or visit https://choiceofamerica.com/.

Call or text 833-THIS-BROKER (833-842-7465).

Dr. Hamid Rowshan, Choice of America. DRE #02004794. Company DRE #02240008.

This article is general information, not legal, tax or lending advice. Solar contracts, utility tariffs and lender rules vary. Confirm details with your lender, your utility, a tax professional and the Riverside County Assessor. Worked examples use example values where noted.

Sources:

• Realtor.com Residential Data, county core inventory metrics (September 2026, Riverside County FIPS 06065): https://econdata.s3-us-west-2.amazonaws.com/Reports/Core/RDC_Inventory_Core_Metrics_County.csv and https://www.realtor.com/research/data/
• Freddie Mac Primary Mortgage Market Survey, 7.32% as of October 22, 2026: https://www.freddiemac.com/pmms
• California Public Utilities Commission, Net Energy Metering and Net Billing: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/customer-generation/net-energy-metering-and-net-billing
• California Public Utilities Commission, NEM Revisit (D.22-12-056): https://www.cpuc.ca.gov/nemrevisit/
• California Public Utilities Commission, Solar Consumer Protection Guide: https://www.cpuc.ca.gov/solarguide
• Southern California Edison, Net Energy Metering: https://www.sce.com/clean-energy-efficiency/solar-generating-your-own-power/billing-incentives/net-energy-metering
• Fannie Mae Selling Guide B2-3-04, Special Property Eligibility Considerations (Properties with Solar Panels): https://selling-guide.fanniemae.com/sel/b2-3-04/special-property-eligibility-considerations
• IRS, Residential Clean Energy Credit: https://www.irs.gov/credits-deductions/residential-clean-energy-credit
• California State Board of Equalization, Letter to Assessors No. 2026/034 (September 1, 2026): https://boe.ca.gov/proptaxes/pdf/lta26034.pdf
• California State Board of Equalization, Active Solar Energy System Exclusion: https://boe.ca.gov/proptaxes/active-solar-energy-system/