Solar Panels on Foreclosure

[Joe Onorato]

Question for everyone in the forums. What is your experience with solar panels and how the bank handles them? I'm assuming these would be a lien on a property like any other lien? The only reason I ask, is they don't seem to be being handled that way, but it could just be the rep I'm dealing with at the solar company.

Currently under contract on a property from Auction.com and there are solar panels. The company is Vivint. I was wondering your experiences if any when dealing with solar. We are at the finish line and obtaining the UCC release, and I'm not sure if the rep for Vivint is just not used to investors or what, but he's making it seem like we are assuming responsibility for the payments of the solar? He mentioned purchasing the panels or prepayment of the power.

If you need more information I'm happy to share but just curious as I'm expecting a ton of foreclosures over the next 3-5 years having solar, so this is my first experience with these. Thanks all in advance!

[Steve K.]

It’s very uncommon for a solar company to come across a situation like this (I’ve worked in solar for over 15 years and haven’t encountered a client’s property being foreclosed on), mostly because the credit threshold to lease solar panels is fairly high, above about 650 for most companies. Perhaps it will become more common as solar proliferates and the barrier to entry is lowered with newer financing products. Anyway my point is I’m not surprised that there is confusion with the bank and the folks at Vivint, as it’s likely the first time they’ve encountered this scenario. I would negotiate hard with Vivint and get a really good price on the system. They would much rather take some money for the system and get it off their books than lose money by coming out to remove it and repair the roof. They also probably won’t be able to resell the equipment as only new equipment qualifies for the tax credit and there isn’t much of a market for used solar equipment so you’re in a good position to negotiate. I’d start at something like half what they say the early buyout price is and go from there.