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Why can’t I mortgage my solar?

Patrick Rahming
I have been fortunate enough to visit countries all over the world, some called rich and some called poor.

One feature many of them share today, however, is the use of solar. From low flying airplanes or buses, solar water heaters or panels have become part of roof-scapes worldwide, from other Caribbean islands to South Africa to Australia. But not in The Bahamas.

What makes this more interesting is that in the early 1970s, when most of the world thought solar water heaters were a new invention, the remains of home-made solar heaters still graced the roofs of older Bahamian homes, especially those close to downtown, like those on Dowdeswell Street.

The major suppliers of solar water heaters at that time were Australia, Israel and Germany, and several installations were made locally, notably due to the evangelistic work of Bob Hart of SolaHart, probably the most passionate solar advocate of the time. That was more than 40 years ago.

Since then the addition of photovoltaic (solar electricity) has made the opportunity to save on energy bills even more available. So, why have most people avoided installing solar?

The first is that for the “ordinary” man there is the belief that government will eventually “solve the energy problem”, to which the informed response is, “Yeah, right!” The second is the reaction to first cost.

While a reaction to cost is to some extent reasonable, most people never actually determine their personal cost, happy to simply repeat what they hear at McDonald’s. “Solar is expensive.” In fact the cost of solar is quite scalable.

The homeowner can choose to have as much solar as they feel they can afford. For example, a solar water heater, which in the average home accounts for almost a third of the power bill, can be installed for less than $2,500 or so, which would pay for itself in less than three to four years. For the remainder of the 20-year life of the system hot water is free.

For pv (photovoltaic) the case is slightly more complex, but even more scalable. To replace the power company’s service could cost $15,000 to $25,000 or more, amounts that would most often require a loan or the draining of a healthy savings account. The payback time is irrelevant if the funds are not available.

Fortunately there is a solution. You don’t have to go off-grid all at once. For example, one local business has offered a 1K system capable of providing minimal lighting and power (especially in emergencies) for a few hundred dollars.

I am told they offered a single collector, a storage battery and a small inverter. How much power you would need to provide as a minimum is a personal decision, based on your pocket book and your sustainability goals, but the cost may be very manageable.

Wouldn’t it make sense, then, for new homes to be built with solar systems, where the cost would be included in the mortgage?

In fact, in more enlightened communities, these features are regarded as such important benefits, they attract reduced down payments and other incentives, as they increase the available funds customers have to pay their mortgages because of reduced power bills.

But what about those already with a mortgage who would like to add solar? Rather than being forced to take out a short-term, high interest loan for a solar system, why not simply adjust your mortgage by the amount needed?

The consumer would benefit from lower power bills, therefore more cash in hand, which means more money to make mortgage payments. This should make the banks happy.

As far as I am aware, the only two things needed to make solar as common here as it is elsewhere are consumers who understand that their power use is a personal commitment, and that solar is a major cost-reduction strategy, a small change in bank policies and government’s decision to waive the charges for “up-stamping” mortgages to facilitate the installation of solar.

Why not?