4 ms·

Reminds me of an recent instance where some friends wanted to buy a house, but it had solar panels. The solar panels couldn't be included in the mortgage and my

Reminds me of an recent instance where some friends wanted to buy a house, but it had solar panels. The solar panels couldn't be included in the mortgage and my friends couldn't afford to buy them outright along with the downpayment on the mortgage. The house still remains unsold.

stephen_g 2y ago
Very curious where this is? Sounds ridiculous, what jurisdiction wouldn’t include them as part of the house? Utterly bizarre! Also why couldn’t they afford them? Is this the US where the equivalent of a $5000 system elsewhere in the world seems to cost $25K to install for some reason? Even then, with depreciation as long as it’s a couple of years old surely the residual value isn’t that much…?
- buggeryorkshire 2y ago
  There were many dodgy schemes in the UK years ago ("free solar panels! cheap electricity!") where people didn't realise there was a mortgage on the panels for 30 years+ which was now in the deeds of the house and made mortgage companies back out, suspect it's exactly this.
  - stephen_g 2y ago
    If they were under some kind of borderline-scam scheme like that, yes that would make sense. But that’s very different than just “having solar panels” that the OP said!
    - gambiting 2y ago
      Op just said "but it had solar panels" - which.....it does. And because it's such a common setup in the UK, every time you see a house with solar panels you can be almost certain it's done this way, not owned outright by the owner.
- QuadmasterXLII 2y ago
  The owners of the house may not own the solar panels: there's a psuedo-scam running around where they are installed for "free" by a company that then gets a lien on the house https://www.forbes.com/home-improvement/solar/solar-scams/ https://www.forbes.com/home-improvement/solar/solar-scams/
  - sumtechguy 2y ago
    This is probably exactly what happened. Those bad boys are not cheap to install either. Systems running well into the 30-50k levels to be paid over '20 years'. The system I put in would have cost about 45k after 20 years if I had taken their loan. I can buy all the electricity I need and 3 of my neighbors for that. As I had the money for up front it ended up costing me 16. Even then the 'ROI' is rubbish. Still cool to get a bill that is just interconnect fees though.
- gambiting 2y ago
  In the UK it's quite a common setup that you don't buy the panels outright, you sign a contract with a 3rd party company that installs the panels on your house and maintains them, but they own the panels, you can just use whatever electricity they produce and any surplus goes to the company owning the panels. The problem is that a lot of these companies went bust when the government ended the electricity export subsidy, and in most cases these panels were then transferred to a larger provider that honours the original contract but on the sale of the house they won't transfer it to the new owner - the only option is for the new owner to buy them outright. And because they rarely look at them in terms of current market value, they will quote you whatever the panels were brand new - which yes, absolutely can be in the £15-20k range, which is crazy by any measure, and you end up in this stupid situation. Usually the best option is actually to remove them instead, but as per contract - you are liable for the cost of doing so, which ends up costing few grand anyway, once you factor in scaffolding and labour and recycling and everything else. And so it's now a burden when it comes to selling the house.
- maxerickson 2y ago
  It could well be that the homeowner has them under some contract (so they may not be part of the house in that sense).
- CivBase 2y ago
  Iowa. I don't know the details, but I assume the solar panels were leased. My friends don't make a lot of money, so they're pretty limited in what they can afford up front. IIRC, the panels would have added around $10K.
thriftwy 2y ago
I wonder how the price of solar panels work WRT mortgage: Is there any government- or bank-approved formula for how much solar panels on a house cost? Otherwise why not sell them for $9.99 along with the house?
- gambiting 2y ago
  Because in most cases the leasing company that owns the solar panels will not transfer the lease to the new owner, they will only agree to sell them outright at some outrageous price(usually the cost of the panels when they were new, which usually has absolutely nothing to do with their current market value or in fact with the cost of a similar installation today).
- deleted 2y ago
  [deleted]
- bluGill 2y ago
  In many locations solar add zero value to the house. So it is possible that you owe more on the house+panels than you can get. Most buyers do not know the worth of solar and so won't pay anything extra for a house that has them (overall, a few are willing to pay, but others will see it as something they will have to pay to remove). Even if you find the one buyer who understands the value, the bank do not understand how it will affect finances and so assume zero - backed up with there are so few buyers who care that they don't see many higher offers coming in for houses with solar. I ate $20k on my last house because of the above.
jmyeet 2y ago
This is why you don't lease solar panels. This is common because there's little to no initial outlay but don't do it. Buy them or don't get them at all.
- AidenVennis 2y ago
  This is why you don't lease anything for your house. For example in The Netherlands you can lease a central heating boiler. I even have a friend that leased a couch once. It's always more expensive and you will have problems with your house when you want or need to sell it (except for the couch of course, that's just stupid...).

stephen_g 2y ago

Very curious where this is? Sounds ridiculous, what jurisdiction wouldn’t include them as part of the house? Utterly bizarre! Also why couldn’t they afford them? Is this the US where the equivalent of a $5000 system elsewhere in the world seems to cost $25K to install for some reason? Even then, with depreciation as long as it’s a couple of years old surely the residual value isn’t that much…?

buggeryorkshire 2y ago
There were many dodgy schemes in the UK years ago ("free solar panels! cheap electricity!") where people didn't realise there was a mortgage on the panels for 30 years+ which was now in the deeds of the house and made mortgage companies back out, suspect it's exactly this.
- stephen_g 2y ago
  If they were under some kind of borderline-scam scheme like that, yes that would make sense. But that’s very different than just “having solar panels” that the OP said!
  - gambiting 2y ago
    Op just said "but it had solar panels" - which.....it does. And because it's such a common setup in the UK, every time you see a house with solar panels you can be almost certain it's done this way, not owned outright by the owner.
QuadmasterXLII 2y ago
The owners of the house may not own the solar panels: there's a psuedo-scam running around where they are installed for "free" by a company that then gets a lien on the house https://www.forbes.com/home-improvement/solar/solar-scams/ https://www.forbes.com/home-improvement/solar/solar-scams/
- sumtechguy 2y ago
  This is probably exactly what happened. Those bad boys are not cheap to install either. Systems running well into the 30-50k levels to be paid over '20 years'. The system I put in would have cost about 45k after 20 years if I had taken their loan. I can buy all the electricity I need and 3 of my neighbors for that. As I had the money for up front it ended up costing me 16. Even then the 'ROI' is rubbish. Still cool to get a bill that is just interconnect fees though.
gambiting 2y ago
In the UK it's quite a common setup that you don't buy the panels outright, you sign a contract with a 3rd party company that installs the panels on your house and maintains them, but they own the panels, you can just use whatever electricity they produce and any surplus goes to the company owning the panels. The problem is that a lot of these companies went bust when the government ended the electricity export subsidy, and in most cases these panels were then transferred to a larger provider that honours the original contract but on the sale of the house they won't transfer it to the new owner - the only option is for the new owner to buy them outright. And because they rarely look at them in terms of current market value, they will quote you whatever the panels were brand new - which yes, absolutely can be in the £15-20k range, which is crazy by any measure, and you end up in this stupid situation. Usually the best option is actually to remove them instead, but as per contract - you are liable for the cost of doing so, which ends up costing few grand anyway, once you factor in scaffolding and labour and recycling and everything else. And so it's now a burden when it comes to selling the house.
maxerickson 2y ago
It could well be that the homeowner has them under some contract (so they may not be part of the house in that sense).
CivBase 2y ago
Iowa. I don't know the details, but I assume the solar panels were leased. My friends don't make a lot of money, so they're pretty limited in what they can afford up front. IIRC, the panels would have added around $10K.

thriftwy 2y ago

I wonder how the price of solar panels work WRT mortgage: Is there any government- or bank-approved formula for how much solar panels on a house cost? Otherwise why not sell them for $9.99 along with the house?

gambiting 2y ago
Because in most cases the leasing company that owns the solar panels will not transfer the lease to the new owner, they will only agree to sell them outright at some outrageous price(usually the cost of the panels when they were new, which usually has absolutely nothing to do with their current market value or in fact with the cost of a similar installation today).
deleted 2y ago
[deleted]
bluGill 2y ago
In many locations solar add zero value to the house. So it is possible that you owe more on the house+panels than you can get. Most buyers do not know the worth of solar and so won't pay anything extra for a house that has them (overall, a few are willing to pay, but others will see it as something they will have to pay to remove). Even if you find the one buyer who understands the value, the bank do not understand how it will affect finances and so assume zero - backed up with there are so few buyers who care that they don't see many higher offers coming in for houses with solar. I ate $20k on my last house because of the above.

jmyeet 2y ago

This is why you don't lease solar panels. This is common because there's little to no initial outlay but don't do it. Buy them or don't get them at all.

AidenVennis 2y ago
This is why you don't lease anything for your house. For example in The Netherlands you can lease a central heating boiler. I even have a friend that leased a couch once. It's always more expensive and you will have problems with your house when you want or need to sell it (except for the couch of course, that's just stupid...).