The Truth About Assigning a microFIT Solar Contract When Buying or Selling A Home

WhoWe are seeing more and more homes with solar panels and many are tied to a 20 year contract under Ontario’s microFIT program which pays the homeowner for the solar power generated and fed back into the electricity grid.  So what happens when one of these homes is sold?

We recently sold what appears to be, the first home in our area that was subject to a microFIT contract.  In the agreement with the Ontario Power Authority (OPA), it clearly states that the agreement can be assigned to a new buyer.  In this case, it said, “The Supplier may assign its rights and obligations under this Agreement with the consent of the OPA, which shall not withhold its consent unreasonably…”

Upon contacting the OPA hotline, we were directing to the instructions for assignment found here. It outlines 5 basic and simple steps.  First, the owner goes online and initiates the assignment request including the proposed effective date which in this case, was the closing date of the home sale.  Check. Done.  Next, the home buyer goes online and registers and obtains a microFIT registrant IS.  Check. Done.  It also says the Buyer needs to set up a generator account with their local utility distribution provider.  Check.  Done.  So far so good.  But wait.

At this point, the instructions say that the buyer will receive an email inviting them to complete “Form B.”  Specifically, the instructions say, “Once Part A of the assignment request is submitted by the Assignor, the Assignee will receive a message in their My microFIT Messages Inbox. The message will include a link to the microFIT Contract that is being assigned and will request the Assignee to complete Form B of the assignment request.”  This is where it all fell apart.  The Buyer never got the invitation.

The Buyer and the Seller both sent emails to the microFIT team and neither got an answer.  Given that we had a fairly fast closing ahead, this was a bit of a worry.  So I emailed the team outlining, step by step, the problem.  I got a response very quickly that said,

Hello Marg,

Please note that only the Assignor is able to initiate a Contract Assignment request. The OPA does not initiate microFIT Contract Assignment requests on behalf of Suppliers.

Regards,

microFIT Contract Team

This can become a long story but suffice to say, this began a game of Who’s On First that brought bureaucracy into the limelight like never before.  They wouldn’t answer the buyer or seller and, they would answer me but only to say the buyer or seller had to be the ones to email.  Both had done so several times with no response.  I replied explaining this situation and got the identical response as above two more times.  I finally resorted to something I never thought I would do…

Twitter.  I went on and “followed” the OPA and then tweeted about how ridiculous it was.  Much to my surprise, it worked!  I got an email the day after my Tweet that said,

Margaret Scheben-Edey,

Please feel free to respond to this email with any questions you may have regarding microFIT Contract FIT-MUxxxxxx.

Regards,

microFIT Contract Team

Yahoo!  So, I replied to that email only to get one back saying that they would contact the assignor and assignee but wait, I then realized that the contract number was NOT the one we were assigning but rather, my own for my own home which had absolutely nothing to do with this!  So I emailed them back pointing out the error and low and behold, I got an email saying,

Hello Marg,

Please note that only the Assignor is able to initiate a Contract Assignment request. The OPA does not initiate microFIT Contract Assignment requests on behalf of Suppliers.

Regards,

microFIT Contract Team

AHHHH!!!!!!!!!!  See what I mean about a game of Who’s On First?  During this charade, I called the hotline and the poor gal I spoke to said that nobody, including her own department, had contact names or numbers for the microFIT team.  It seems they are a secret department insulated from the general public.  The gal on the phone explained that she had several callers complaining of the same problem and that she could do absolutely nothing but wish me luck.  Luck?!

Then it hit me.  Maybe they wouldn’t assign the contract until AFTER the sale was completed.  The clue was that the assignee was supposed to provide a property PIN number (registration of sale document) and that the PIN would not match the applicants name.  BINGO.  After emailing them once again with a generic question not tied to any person, house or contract asking if the PIN had to match the owners name, the answer was yes.

The Bottom Line:  There is seemingly no way to initiate the transfer process before a sale is completed.  A buyer can register for a microFIT ID and, they can set up a generator account with the local utility distributor.  The current home owner (seller) can go online and request an assignment but, there it stops.  Until the registration is completed and a new PIN is assigned to the new buyer, the process cannot be completed.

In our case, knowing that this was new for everyone, I included a clause in the offer saying that any revenue generated after the closing date would be assigned in full to the buyer.  Our local electricity utility also kindly agreed, with everyone’s written direction and consent, to forward any revenue from the closing date forward, to the new buyer.

It is important that anyone buying or selling a home that is subject to a microFIT contract be aware of the steps involved as well as the timelines in assigning the contract to a new buyer.  In the end, it’s worth it.

As an Accredited Green Broker® with the National Association of Green Agents and Brokers as well as the owner of a home with solar panels subject to microFIT agreement, it’s my pleasure to assist people with their green real estate goals and questions. Please feel free to email me or call at 705-446-1762.

 

 

 


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About Marg

is an award-winning real estate Broker who has successfully been helping people move since 1989. When it’s time for a move in or out of a bigger, smaller, better, more expensive, less expensive, newer, older, house, condo, farm, investment property, vacant lot or business, talk to Marg.

This entry was posted by Marg on Thursday, February 20th, 2014 at 10:30 am and is filed under Selling Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

9 Comments

  1. Mary Ann Higgs says:

    Dear Marg; Very helpful info. We have a micro-fit contract and our house has just been listed. We’ve had real estate agents and appraisers weigh in on the ‘value’ of the contract and how to communicate with potential purchasers about their options on that score. As vendors we have a book value but also a range of higher value based on projected future income discounted for inflation. Some appraisers just assume some arbitrary number as an annual maintenance cost, others ignore that possibility. We registered for HST to get the HST on our components and installation back and are filing quarterly but could have gotten organized for annual but haven’t. Our application for the HST rebate was audited since our local utility hadn’t assessed HST for the first half year and CRA seemed in the final analysis to have reduced our refund by a portion of what they would have received if there had been HST on it from the start. It was all just too new and the auditor was in B.C., required copies of all sorts of documents and took forever to issue a decision.
    As we go to sell our house we are advising that the purchaser can break down their offer into $x for the house and $y for the solar so long as the total satisfies us..and will need to register for HST if they want to avoid paying HST on that portion of their acquisition which we would have to charge but it would be a ‘wash’ and require no cash if they were registered by the time of the transfer of interest. Thereafter they have an ongoing role as tax collectors/filers which is a nuisance but not a cost. If they ‘pay’ more than our book value, they have more room to depreciate and we will have some capital gain. I don’t know how CRA would see a sale at less than book value? They might disallow our claim for a loss perhaps? Thoughts? Thanks in advance.

  2. Mary Ann Higgs says:

    Have most residential micro-fit account holders not registered for HST? Foregoing the refund of the 13% HST paid on the original acquisition? Seemed worth the tracking and filing thereafter to get $5000 or so back within the first year to pay down financing.

  3. Marg says:

    Great comments Mary Ann and thanks for sharing your thoughts. It is a complicated area and each situation may be different so I would agree that anyone putting in a system should obtain professional advice.

  4. Jan says:

    We are in the process of selling our farm to our son but we would like to keep the income from the microFIT solar panels and he’s fine with this as he has to borrow less money. The problem is the IESO won’t allow the contract to stay in our name if we don’t own the property. This makes things a little problematic if our son decides to sell the property in the future. Wondering if anyone has a formula for valuing the panels as we may need to take this into consideration.

  5. Marg says:

    This is a tricky issue and one I have heard of other people struggling with. First, there are many different versions of the original contract and they address options differently. I assume you’ve reviewed that. The second question is about ownership and it does say you have to own however, there are all kinds of commercial companies leasing rooftops so there is a way around it. Perhaps consult one of them because heavens knows, you’ll never get an answer from the microFIT people. Jan, when you figure it out, will you post it here? A lot of people are landing on this post asking similar questions so I’m sure your hard work will help someone else. Thanks for posting.

  6. Bob Hudspith says:

    We are planning to sell our house. We have 15 years left on a microfit contract for a 10KW system that generates income at .80 /KWH. Do you have experience with how much we should be able to increase the value of the house with the inclusion of this contract.

  7. Bob Hudspith says:

    We are planning to sell our house. We have 15 years left on a microfit contract for a 10KW system that generates income at .80 /KWH. Do you have experience with how much we should be able to increase the value of the house with the inclusion of this contract.

  8. Marg says:

    Hi Bob
    We have the same contract as you so it’s a question I too am interested in. There doesn’t seem to be enough data out there to really say but I would treat it as though you had an income suite – there is value to that income and someone will pay for that value. Of the ones I’ve sold to date, they have gotten back the original purchase price however they were smaller systems. I would aim for that figure if your income justifies it and see what happens. Will you let me know the outcome? I’d like to keep track where possible and I know the other readers of this blog would appreciate it as well. Thanks.

  9. Dieter Heinrich says:

    Considering how long this program has been running, I’m surprised that there isn’t a well-travelled path for this.

    I have a system, but nowhere in the paper work do I have a contract per se that says I will be paid X for Y years. Does anyone else have their deal in writing?

    Simply adding the original cost of the installation to the price of the house seems arbitrary because the value depends on how many years are left in the contract. I imagine in the world of finance there is a formula for how much to pay for an asset’s future earnings.

    Remember too that the solar panels will keep on producing after the contract.

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