Removing a Solar Panel Lease From Title Before You Sell in Ontario

Solar panels installed under a lease agreement — often tied to Ontario's earlier microFIT and FIT renewable energy programs — can complicate a sale in a way that owned panels don't. If the panels (or the equipment financing behind them) are registered against you as a security interest, that registration doesn't just disappear when you list the home. It has to be actively addressed before your buyer can take clear title.

If you're planning to sell a home with a solar panel lease or a legacy microFIT-style contract, understanding how that registration works — and how it typically gets cleared — helps you avoid a scramble in the final days before closing.

Why a Solar Lease Shows Up in a Title Search

When homeowners leased rather than purchased solar panel systems, the leasing company commonly registered a security interest to protect its ownership of the equipment. Depending on how the arrangement was structured, that interest may appear as:

• A registration under the Personal Property Security Act (PPSA) against the equipment (since leased panels are often treated as personal property rather than a permanent part of the land), or
• In some cases, an instrument registered directly on the property's title

Either way, this registration is the kind of encumbrance that a buyer's lawyer will flag during due diligence: it can affect marketable title and generally needs to be paid out, discharged, or otherwise resolved before or at closing.

Solar Leases vs. microFIT Contracts: Not the Same Thing

It's worth separating two related but distinct arrangements that sometimes get lumped together:

A solar panel lease is a financing arrangement — you don't own the panels outright, and the leasing company holds a registered interest in them until the lease is paid off, bought out, or otherwise ended.

A microFIT or FIT contract is a separate agreement with Ontario's electricity system operator that pays a set rate for electricity the panels generate and feeds back into the grid. Whether an existing microFIT-style contract can be assigned to a buyer, has to be terminated, or continues to run with the property depends on the specific contract's terms — this isn't governed by a single uniform rule, and older contracts vary. If your home has one, review your original agreement rather than assuming how it works.

Steps to Clear a Solar Lease Before Selling

Step 1: Locate Your Original Lease Agreement

Find the leasing company, the account details, and the payout or buyout terms. This is the starting point for everything else.

Step 2: Request a Payout Statement

Ask the leasing company for the current amount required to buy out or terminate the lease. This figure varies by company, remaining term, and your specific contract — there's no standard number to expect.

Step 3: Decide: Buy Out, Transfer, or Remove

Depending on the lease terms, you may have a few options:

• Buy out the lease before closing, so you own the panels free and clear and can discharge the registration.
• Transfer the lease to the buyer, if the leasing company allows assignment and the buyer is willing to take it on — this usually requires the leasing company's consent and buyer qualification.
• Have the panels removed, if neither buyout nor transfer works for your timeline or the deal.

Step 4: Obtain and Register a Discharge

Once the lease is paid out or otherwise resolved, the leasing company needs to provide a formal discharge of its registered interest. Your real estate lawyer typically coordinates getting this registered so it's off title (or off the applicable registry) by closing.

Step 5: Build the Timeline Into Your Closing

Payout and discharge paperwork from a leasing company can take real time to process. Sellers who leave this until the week of closing risk a delay — start well before you expect an accepted offer if you can.

What Happens If It's Not Resolved by Closing

If a solar lease registration isn't cleared by the closing date, it can hold up the transaction in a few ways:

• The buyer's lawyer may refuse to close until it's addressed, since it affects the buyer's ability to take clear title
• Funds from the sale may need to be held back (an escrow-style arrangement between the lawyers) specifically to pay out the lease immediately after closing
• In some cases, the closing date itself may need to be extended

None of these outcomes are unusual to manage — but they're avoidable with earlier planning.

A Quick Comparison: Owned vs. Leased Solar Panels When Selling

Frequently asked questions