Solar Panels & Reverse Mortgages in Ontario

Ontario homeowners who have invested $15,000 to $30,000 in rooftop solar panels often wonder whether that investment will help or hurt their reverse mortgage application. The answer depends almost entirely on one factor: whether you own the panels outright or lease them. Owned solar systems can boost your home's appraised value by $10,000 to $25,000 or more, while leased panels can create a lien on your property that complicates — or even blocks — a reverse mortgage from CHIP by HomeEquity Bank, Equitable Bank, Bloom Financial, or Home Trust.

How Solar Panels Affect Ontario Home Appraisals

When you apply for a reverse mortgage through a broker like Rick Sekhon, the lender orders a professional appraisal of your property. The appraiser evaluates everything from location and square footage to upgrades and energy systems. Solar panels fall into the "upgrades" category — but their treatment depends on ownership structure.

According to the Canada Mortgage and Housing Corporation (CMHC), energy-efficient upgrades are increasingly recognized as value-adding improvements in Canadian residential appraisals. The Appraisal Institute of Canada has also published guidance noting that solar photovoltaic systems can contribute positively to market value when properly installed and owned.

Factor	Owned Solar Panels	Leased Solar Panels
Impact on appraised value	✓ Positive ($10K–$25K+)	✗ Neutral to negative
Title encumbrance	✓ None	✗ Lien registered on title
Reverse mortgage compatibility	✓ Fully compatible	✗ May require lien removal
Transferability at sale	✓ Included with home	✗ Buyer must assume lease
Monthly cost to homeowner	✓ $0 (system paid off)	✗ $50–$150/month lease

The Owned Panel Advantage

If you purchased your solar panel system outright — whether you paid cash or financed and paid off the loan — the panels are a permanent improvement to your property. Appraisers treat them similarly to a new roof, upgraded HVAC, or finished basement. In Ontario's housing market, a 10 kW owned solar system installed in 2022–2025 can add $12,000 to $20,000 to your appraised value, depending on system age, condition, and local market comparables.

The Leased Panel Problem

Between 2009 and 2018, thousands of Ontario homeowners entered into solar panel lease agreements through companies participating in the province's microFIT and Feed-in Tariff (FIT) programs. These lease agreements typically registered a lien or encumbrance on the property's title — and that creates a direct conflict with reverse mortgage lenders.

All four major reverse mortgage lenders in Canada — CHIP by HomeEquity Bank, Equitable Bank, Bloom Financial, and Home Trust — require a first-priority lien position on your property. A pre-existing solar lease lien can subordinate the lender's position or create title complications that delay or prevent approval.

"If there's a lien on title from a solar lease, we need it discharged before we can register our mortgage. It's one of the most common surprises homeowners face during the application." — Rick Sekhon, Reverse Mortgage Broker

Ontario's Solar Programs and Net Metering Income

Ontario has gone through several iterations of solar incentive programs. Understanding where your system fits helps you estimate its impact on your reverse mortgage.

Program	Active Period	Status in 2026	Impact on RM Appraisal
microFIT (< 10 kW)	2009–2017	Contracts expired or expiring	✓ Owned systems add value
Feed-in Tariff (FIT)	2009–2016	Most contracts expired	✓ If panels owned, adds value
Net Metering	2018–present	Active	✓ Reduces hydro costs, adds value
Canada Greener Homes Grant	2021–2024	Closed	✓ If grant used, panels are owned
IESO Grid-Connected Program	2025–present	Active	✓ Net metering credits

Net Metering and Energy Savings

Ontario's current net metering program allows homeowners with solar panels to feed excess electricity back to the grid and receive credits on their hydro bill. For a typical 10 kW system in southern Ontario, this can mean:

• Summer months: $80–$150/month in hydro savings or credits
• Winter months: $20–$50/month in savings
• Annual savings: $600–$1,200 depending on system size and usage

According to the Independent Electricity System Operator (IESO), Ontario's net metering program had over 38,000 active participants by the end of 2025, with residential solar installations growing 18% year-over-year.

These energy savings don't directly increase your reverse mortgage amount — the loan is based on appraised value, not operating costs — but they do strengthen your overall financial position in retirement. Every dollar saved on hydro is a dollar that can cover property taxes, insurance, or daily living costs. For homeowners exploring ways to improve retirement cash flow, solar savings provide a meaningful boost.

How microFIT Contract Expiry Affects Your Situation

If you were part of Ontario's microFIT program, your 20-year contract is either expired or approaching expiry. Once the contract ends:

1. You own the panels — they're permanently attached to your property
2. The FIT income stream stops — you no longer receive above-market rates for exported power
3. You can switch to net metering — reducing your hydro bill instead of earning income
4. The panels still add appraised value — though slightly less than during peak FIT income years

This transition actually simplifies the reverse mortgage process. With the FIT contract expired, there's typically no remaining lien or encumbrance related to the program.

What Solar Panels Are Worth to Your Reverse Mortgage

Let's walk through a real-world example to show how owned solar panels affect the numbers.

Worked Example: Barrie, Ontario Bungalow

Detail	Without Solar	With Owned Solar
Property type	3-bed bungalow, 1,400 sq ft	Same property
Base appraised value	$620,000	$620,000
Solar system	None	8.5 kW, installed 2021
Solar value added	$0	+$15,000
Total appraised value	$620,000	$635,000
Eligible RM amount (35% LTV)	$217,000	$222,250
Additional borrowing power	—	+$5,250

The $5,250 difference may seem modest, but it's meaningful — especially when combined with the $800–$1,000 in annual hydro savings the system generates. Over a 10-year reverse mortgage horizon, that's $8,000–$10,000 in energy savings alone.

Value Depreciation of Solar Systems

Solar panels do depreciate over time, which affects how appraisers value them:

System Age	Estimated Value Retention	Appraisal Impact
0–5 years	85–100% of install cost	✓ Strong positive
6–10 years	60–80% of install cost	✓ Moderate positive
11–15 years	40–60% of install cost	✓ Mild positive
16–20 years	20–40% of install cost	✓ Minimal positive
20+ years	10–20% of install cost	✓ Slight positive

Even older systems retain some value because modern panels are warrantied for 25 years and typically produce 80%+ of their rated output at year 25. An appraiser familiar with solar technology will factor in remaining useful life and energy production capacity.

How to Remove a Solar Lease Lien Before Applying

If you have leased panels and want to proceed with a reverse mortgage, you have several options. Rick Sekhon Reverse Mortgages regularly helps clients navigate this process:

Option 1: Buy Out the Lease Most solar lease agreements include a buyout clause. The cost typically ranges from $5,000 to $15,000 depending on the remaining term. Once you buy out the lease, the company discharges the lien, and you own the panels free and clear.

Option 2: Request Lien Subordination Some solar companies will agree to subordinate their lien to the reverse mortgage lender's first-position mortgage. This requires cooperation from both the solar company and the reverse mortgage lender — it's not always possible, but worth exploring.

Option 3: Have the Panels Removed If the lease buyout is too expensive and subordination isn't available, some homeowners opt to have the leased panels removed entirely. The solar company handles removal since they own the equipment. This eliminates the lien but also eliminates the energy savings.

Option 4: Use Reverse Mortgage Proceeds for Buyout In some cases, the reverse mortgage can be structured so that a portion of the proceeds immediately pays out the solar lease buyout. This requires coordination with your broker and the lender, but it's been done successfully.

For homeowners considering this alongside other financial strategies, our guide on debt relief options for Ontario seniors covers how reverse mortgage proceeds can consolidate various obligations, including lease buyouts.

Lender-Specific Attitudes Toward Solar Panels

Each of the four major Canadian reverse mortgage lenders has slightly different guidelines regarding solar installations:

Lender	Owned Panels	Leased Panels	Battery Storage
CHIP (HomeEquity Bank)	✓ Accepted, value recognized	✗ Lien must be discharged	✓ Accepted if owned
Equitable Bank	✓ Accepted, value recognized	✗ Lien must be discharged or subordinated	✓ Accepted if owned
Bloom Financial	✓ Accepted, value recognized	✗ Case-by-case review	✓ Accepted if owned
Home Trust	✓ Accepted, value recognized	✗ Lien must be discharged	✓ Accepted if owned

All four lenders view owned solar panels positively. The panels demonstrate that the homeowner has invested in the property and that the home is well-maintained — both of which are favourable signals during underwriting.

The Financial Services Regulatory Authority of Ontario (FSRAO) oversees mortgage brokering in the province and requires that all liens and encumbrances be disclosed during the mortgage application process. Your broker is obligated to identify any solar lease liens during the title search and address them before closing.

Should You Install Solar Panels Before Applying?

If you're considering a reverse mortgage and also thinking about installing solar panels, the sequencing matters:

Install First, Then Apply for RM:

• ✓ Solar panels increase appraised value
• ✓ Higher appraisal means higher eligible borrowing amount
• ✗ Requires upfront capital ($15K–$30K) you may not have

Apply for RM First, Then Install Solar:

• ✓ Use reverse mortgage proceeds to fund the installation
• ✓ No upfront capital needed
• ✗ Initial appraisal doesn't include solar value boost
• ✗ Borrowing amount based on lower pre-solar appraisal

Use RM Proceeds for Solar Installation: This is actually the most common approach Rick Sekhon Reverse Mortgages sees among clients. Homeowners access their equity, use $15,000–$25,000 for a solar installation, and enjoy energy savings for decades. The solar system then adds value to the home, partially offsetting the mortgage balance growth over time.

For those planning broader aging-in-place modifications, combining solar with accessibility upgrades can be an efficient use of reverse mortgage funds.

Battery Storage and EV Chargers: Additional Considerations

Many Ontario homeowners are pairing solar panels with battery storage systems (like Tesla Powerwall) and electric vehicle chargers. These additions also affect appraisals:

• Battery storage ($10K–$18K installed): Adds $5,000–$12,000 to appraised value and provides backup power during outages
• EV charger ($1,500–$3,000 installed): Adds $1,000–$2,500 to appraised value as EV adoption grows

Both are treated as owned improvements if purchased outright, and both are viewed positively by all four reverse mortgage lenders.

Homeowners exploring the financial side of solar plus reverse mortgage strategies may also find our posts on reverse mortgage home renovations in Ontario and how much you can get from a reverse mortgage helpful for planning.

If you're thinking about using a reverse mortgage to fund solar — or wondering how your existing panels affect your application — a free consultation can give you specific numbers for your property.

Get your free Ontario Reverse Mortgage Guide →

Frequently Asked Questions

Do solar panels increase my reverse mortgage amount?

Yes, if you own the panels outright. Owned solar systems typically add $10,000 to $25,000 to your home's appraised value, which increases your eligible borrowing amount. At a 35% loan-to-value ratio, a $20,000 appraisal boost means approximately $7,000 more in available funds. Leased panels do not add value and may create lien complications.

Can I get a reverse mortgage if I have leased solar panels?

It depends. Leased solar panels typically register a lien on your property's title, which conflicts with the reverse mortgage lender's requirement for first-priority lien position. You may need to buy out the lease, negotiate lien subordination, or have the panels removed before your application can proceed. Your broker can advise on the best path.

Will my net metering income affect my reverse mortgage eligibility?

Net metering credits are not considered income for reverse mortgage qualification purposes — reverse mortgages are based on your age, property value, and location, not income. However, the energy savings improve your overall cash flow, which helps you maintain property taxes, insurance, and other obligations that reverse mortgage lenders require you to keep current.

How do appraisers value solar panels on Ontario homes?

Appraisers consider the system size, age, condition, remaining warranty, energy production capacity, and local market comparables. A newer, larger system in good condition adds more value. Appraisers also look at whether the system is owned or leased, as only owned systems contribute to appraised value. The income approach (energy savings capitalized) and cost approach (depreciated installation cost) are both used.

Should I install solar panels before or after getting a reverse mortgage?

Most homeowners find it practical to get the reverse mortgage first and use a portion of the proceeds to fund the solar installation. This avoids the need for upfront capital. While the initial appraisal won't include the solar value boost, the long-term energy savings and property value enhancement can partially offset mortgage balance growth over time.

Does FSRAO regulate how solar panel liens interact with reverse mortgages?

FSRAO regulates mortgage brokering in Ontario and requires full disclosure of all title encumbrances during the application process. While FSRAO doesn't specifically regulate solar lease agreements, any lien discovered during the title search must be addressed before a reverse mortgage can close. Your licensed broker is obligated to identify and help resolve these issues as part of the independent legal advice process.