“Solar is Great, But Creating Mortgage Issues”

I recently questioned the practices going forward in the solar panel industry. Seems that leasing isn't the only problem. While the energy bills end up being low, the cost of purchassing and/or leasing is high and complicated. I love the idea of solar, but I think that we are a long way off from mainstreaming their use with all of these obstacles in our way.

Yes, the second mortage moves into first place when you try to refinance the first.  So you do need the consent from second to subordinate their position!!!

Interesting. I've shown houses where the solar system was supposedly assumable by the new owner - I didn't realize the implementation was done with a second mortgage. Now I know what questions to ask next time I come across that situation.

We do so many cash or owner financing sales with the off grid, no year round road maintained properties with lots of acreage. Those properties don't fit the underwriting regs for sure.

I have wondered when/if we will begin to see solar mortgages begin to initiate foreclosure proceedings for nonpayment. Joe, this serves as an excellent precaution. I have reblogged.

Thanks Joe, for bringing this important topic the attention it deserves!

I have solar panels and we are thrilled with them.  But there are so many issues to sort out leasing vs. owning, how to pay for them, is the company reputable, etc.  We did purchase and finance our panels - but no second mortgage for them on our house; I wouldn't have done that. A  good part of the financing was at 0% and the rest below 3% so it made financial sense. Between the lowered energy costs, the tax credits, the SRECs that we get to sell on the open market - it still costs less than our previous electric bill.  

So much for taking my house off the grid. LOL  I just had a lender speaking to me about just this issue.  Said leased panels are also difficult to deal with in a mortgage.  Damned if we do, damned if we don't (go green)

And all the solar company cared about was to get those panels up and get paid.  All else is to the owner to resolve.  There could be future issues down the road with potential buyers that don't like the looks of those panels

I can see where this could be a very big problem and prevent someone from moving forward with their plans.  Not well thought out at all!

It's bad....I can't even get my buyers to write offers on homes with solar, unless they are completely paid off...which is very rare. 

Joe Petrowsky Where we, as Realtors are getting into problems, is in the area of leased systems, as others before me have noted.

Good morning Joe Petrowsky,

How did I ever miss this post! So glad I always check in with Kathy Streib 's post on her "Ah-ha" moments for the week. We are starting to see sellers purchase solar panels and are happy with them but they are expensive and they don't add the value to the home they are expecting.  I find Like Karen Fiddler, Broker/Owner most buyers shy away from homes with them unless they are paid off..which I find is rare too!

Good Sunday morning Joe Petrowsky -

With New Mexico having so many long and full days of sunshine solar is really becoming a big deal here.  Thanks for sharing your knowledge my friend.

It's a shame that when buyers are trying to go green they get the shaft instead.  It seems it may be years before solar panels are really beneficial to homes -value wise.

Joe Petrowsky surprisingly enough, those who market solar panels always underplay this fact! As per them, we don't need to worry about ANYTHING!

Thanks for this most informative post.  It seems there are a lot of things to consider.

I know that the return on investment can be years for solar. I applaud everyone who takes the step to purchase it and hope it will become the norm in our future.  Maybe it makes more sense to include it as part of the purchasing of a property so it is included in the mortgage which is what I was told made sense. How can someone still purchase solar and steer clear of any misleading sales tactics and the fine print in the refi? Thanks for your informative post.

This has not been a popular way to heat the home in my area, but there are solar panel systems out there. I listened to one presentation about solar heating, and it sounded very attractive, but also very expensive. Thanks for additional information on the potential problem when reselling.