That Rooftop Solar Lease Could Complicate Selling Your Hawaiʻi Home

Hawaiʻi has one of the highest rates of rooftop solar in the country, and a lot of homeowners got their system through a lease or a power purchase agreement (PPA) instead of buying the panels outright. It felt simple at the time — sign up, lower your electric bill, no big loan to worry about. What a lot of people don't realize is that arrangement may have quietly attached something to their home's title that shows up the moment they try to sell, refinance, or navigate a mortgage hardship.

Owning your panels vs. leasing them

If you bought your solar system outright — cash or through a solar loan — you own the equipment, plain and simple. But under a lease or a PPA, the solar company owns the panels. You're paying either a flat lease payment or a per-kilowatt-hour rate for the electricity the system produces, similar to how you'd pay a utility. The equipment on your roof isn't yours.

Why that shows up like a lien

To protect their ownership of the equipment, solar companies typically file a UCC-1 financing statement — a public filing that puts the world on notice that the panels on your roof belong to them, not to you. It isn't a mortgage lien in the traditional sense, but it shows up in a title search the same way a lien would, and a title company or buyer's lender will absolutely flag it.

How this complicates selling your home

• The buyer generally has to agree to take over the lease or PPA — and not every buyer's lender will allow that, especially if the buyer is financing with certain loan types.
• Or you have to pay it off or buy out the system before or at closing, which can be a significant unexpected cost if you didn't plan for it.
• Closings can get delayed while the title company works out exactly what needs to happen with the UCC filing before it can be cleared.

How this complicates refinancing — or a mortgage hardship

Some lenders won't refinance a home with an active solar lease or PPA UCC filing until it's resolved, since it clouds the title in a way their underwriting doesn't allow. And if you're already dealing with a mortgage hardship — considering a short sale, a deed in lieu of foreclosure, or even certain loan modifications — the solar company's filing is a separate obligation that has to be dealt with alongside your mortgage, not instead of it. It's an extra layer that catches a lot of homeowners, and their agents, off guard mid-transaction.

What to do about it

• Find your original solar paperwork. Determine clearly whether you own the system, financed it with a loan, or have a lease/PPA — the paperwork will say which.
• If you're not sure, check for a UCC filing. Hawaiʻi's UCC filings are searchable through the state's business registration system, and a title company can also check this for you.
• If you're planning to sell or refinance, deal with this early — not the week of closing. Contact the solar company about your options: transfer to the buyer, prepay/buyout, or early termination.
• If you're facing a mortgage hardship, tell your loss mitigation contact, real estate agent, or attorney about the solar lease upfront — it changes what a short sale or deed in lieu actually requires.

Getting the right help

The exact terms of your solar agreement — whether it can be transferred, what a buyout costs, how it interacts with your specific mortgage situation — depend entirely on your paperwork and your lender. I can help you understand how a solar lease fits into your bigger picture and make sure it isn't a surprise that derails a sale or hardship option later.