Many homeowners who participated in a program that let them repay the cost of solar panels and other energy improvements through an annual surcharge on their property taxes must pay off the loans before they can refinance their mortgages, two government-chartered mortgage companies said on Tuesday.
The guidance came from Fannie Mae and Freddie Mac as efforts to resolve a dispute over the program — called Property Assessed Clean Energy, or PACE — have failed.
Approved by 22 states, the programs let municipalities sell bonds to finance improvements in energy efficiency. Homeowners typically pay back the loans over 20 years through an annual property tax assessment. As is the case with other property tax assessments, a lien is placed on the home that has priority over the mortgage if the homeowner defaults.
In July, the Federal Housing Finance Agency, which oversees Fannie and Freddie, effectively derailed the program when it issued guidance to lenders stating that the liens violated the agency’s underwriting standards. Fannie and Freddie buy and sell most of the nation’s home mortgages.
That guidance led to the halt of most PACE programs and left in limbo those homeowners who had already taken out energy improvement loans.
On Tuesday, Fannie and Freddie issued guidance to lenders stating that borrowers with sufficient equity in their homes must pay off the loans before refinancing. Those homeowners without enough equity to take cash out of their home to pay off the lien can refinance with the loan in place.
“Fannie Mae will not purchase mortgage loans secured by properties with an outstanding PACE obligation unless the terms of the PACE program do not permit priority over first mortgage liens,” according to the guidance.
The program’s proponents have argued that it overcomes obstacles to installing expensive solar panels and making other energy efficiency improvements that reduce greenhouse-gas emissions while creating jobs.
In response to the Federal Housing Finance Agency’s actions, the California attorney general’s office filed a lawsuit in July against Fannie and Freddie, as did the Sierra Club. Meanwhile, legislation has been introduced in Congress to allow the program to go forward.
“It’s absolutely clear now that the F.H.F.A. is not at all interested in working out a solution that would allow PACE to proceed — the agency appears intent only on obstructing the program,” Janill L. Richards, a California supervising deputy attorney general, wrote in an e-mail.
“Also, this is another example of the agency treating PACE financing as loans, where, under state law, they’re assessments, and under law, the obligation to pay runs with property and passes on sale,” she added.
A spokeswoman for the housing agency, Stefanie Mullin, said she had no comment.
Legislators and Obama administration officials have been negotiating with the housing agency in an effort to address its concerns while letting the program continue.
But on Thursday, the housing agency’s acting director, Edward J. DeMarco, sent a letter to Representative Ed Perlmutter, Democrat of Colorado, stating that those discussions had failed and reiterating the agency’s opposition to the program.
“PACE programs are implemented state by state and locality by locality without uniform standards for consumer protections and appropriate underwriting,” Mr. DeMarco wrote. “F.H.F.A. found this particular initiative threatening to the safe and sound operations of its regulated entities and directed that appropriate steps be taken to address such risks.”
Recently, I seem to be getting a lot of questions about PACE (Property Assessed Clean Energy) Programs that would allow you to finance a new solar electric system in your property tax bill (see earlier entry: 
New California Law AB920
What Rate Will SDG&E Pay?
When Could Oversizing Make Sense?
This new law changes the maximum cap from 2.5% to 5% of the utilities' peak demand. This could be a very big deal in the future. What it means is that before this change the utilities only needed to agree to "net meter" up to 2.5% of their peak demand. So once this was reached homeowners would no longer have the availability of net metering for their solar electric system. However, this maximum has been doubled which means many more homeowners for a longer period of time will be able to setup net metering with the utilities to take advantage of Solar Electricity. 
This energy is measured in kWh (which stands for kilowatt-hours). 
Solar electric systems are expected to last 20 to 40 years depending on who you ask. Even at the low end of that range that's a long time. Think of all the changes in your life from where you were 20 years ago. 
To know more about how your system is running, you will need to use a meter of some sort. Your utility meter is a good indicator of whether your system is working or not. Midday during a bright sunny day your utility meter should run backwards when not much electricity is being used in the house (see also 
There are two main types of inverters: large string inverters and microinverters. This may be a bit of an oversimplification but it's sufficient for this discussion. String inverters for the home are typically a large metal box that hangs on a wall in the garage or on an outside wall. They are fairly heavy at about 50 to 100 lbs. Typically they are are a couple of feet wide by a few feet tall and less than a foot deep. They take up space. 
PC
technology is rapidly evolving and so are solar electricity solutions.
So it seems very likely that there will be a better solution in the
future, but this is part of continuous change that will likely last for
many years. Many of today's solar power solutions are excellent and
will be even better in the future. To help make a decision just look
at the costs of the system and the savings and think of it as an
investment (see 
Did you know you can get your electric meter to run backwards? And it's completely legal. If you invest in a solar electric system (see also article 
Sunny Area Available to Install Solar Panels - First you must have a relatively large area to install solar panels. Typically, this is a large rectangular roof area that is free of shade throughout the year. This area could also be triangular ( 
Panels Southerly Facing - The solar panels should be facing generally South (at least here in the Northern Hemisphere) to improve power production of the panels. Southeast and Southwest are also usually good choices. East and West facing are ok. But avoid northerly directions, because you will get a poor energy harvest because northerly directions get less direct sunlight. 
Daily Sun Path - Everyday the sun rises in the East, passes overhead, and sets in the West. Anything that will block sunlight as the sun crosses the sky can cause shading problems. Shading can be caused by trees, shrubbery, hills, nearby homes, chimneys, vents, etc. Shading will reduce the amount of power that is produced by the solar electric system. Avoid shading. 
Protection from Rising Electric Rates