The Board of Directors of Nā Hale O Maui (NHOM), after review of several solar power lease agreements (Purchase Power Agreement, Power Service Agreement, etc.), has determined that it is in the best interest of NHOM and our Homeowners to prohibit solar energy lease/power purchase agreements on our properties. We find that these agreements are extremely complex, and difficult to understand. This much is very clear: these Agreements favor the Solar Company; not the Homeowner, and they contain numerous clauses that may create significant problems for Homeowners who want to refinance or sell their homes.
The majority of NHOM properties are financed under the Federal National Mortgage Association (FNMA) “Fannie Mae.” The FNMA My Community loan program has enabled our income-qualified families to purchase our community land trust homes with a low down payment. These loans must conform to FNMA guidelines, including FNMA issued guidelines regarding Leased Solar Panels. None of the power lease agreements that we have reviewed conform to the FNMA guidelines.
This is why NHOM and our Homeowners simply cannot agree to participate in solar power lease agreements that could preclude the mortgage financing of their homes in the future for any refinancing or sale to another income qualified household.
Nā Hale O Maui continues to believe that solar energy is a viable alternative to fossil fuels. When appropriate, we encourage our homeowners to buy their solar energy system.
The homeowner will receive an initial credit of up to 50% of the selected contractor’s bid, subject to any reduction for reasonableness in year 1. The credit will be reduced over a period of 15 years, in equal annual amounts, from a maximum of 50% in year 1 to 0% by the start of year 16. The ECI credit will be added to the Limited Resale Price or Limited Refinancing Price calculation.
Additional Solar Lease issues: