Solano Real Estate Scene: Jim Porter
Article By: Jim Porter – March 10, 2026
Solar panels and now all these batteries and power purchase agreements are really a pretty new thing. These Solar leasing and finance companies that are leasing and doing loans secured by Solar equipment are filing UCC-1s and recording the document with the county. UCC-1 financing statements are primarily used to establish a legal claim (lien) on personal property used as collateral for loans and leases.
Solar is new, but the UCC-1 has been around since 1954 for business equipment loans, inventory financing, fleet financing, fixtures in real estate that are attached but may still be considered personal property by a lender, such as HVAC systems or large commercial appliances.
A UCC-1 is also used to secure loans on cattle, pigs and sheep as well as crops and farming equipment. What all of these things have in common is that all of this collateral secured by a UCC-1 is “chattel” which is defined as “a personal possession” and in the law books “an item of property other than real estate”. Well, guess what some residential mortgage lenders are doing to consumers, loan officers, realtors, and escrow officers around the country today? They are driving people nuts with inconsistent policies and misinformation because of laziness and a lack of legal advice. In fairness to these mortgage lenders, most of them do not underwrite and fund commercial real estate loans, but for heaven’s sake, it has been 10 years since Solar companies started doing leases and power purchase agreements and now that the 30% tax credit is gone, PPAs and leased solar might be 90% of all residential solar.
The terrific local title companies have been telling bankers for years that the UCC-1 filings that show up on a preliminary title report are not a lien against the real property, AKA, the house and the land it sits on, and yet many lenders still require the solar leasing company to terminate or subordinate the UCC-1 document which in some cases is a huge pain in the neck for people simply trying to REFI their home or take out a HELOC. Some solar companies are easy to work with, but some are just coming out of bankruptcy or a merger. The solar company needs to record a UCC-1 so they can REPO the panels if necessary, and they must NOTIFY the public via the recording to make sure potential buyers know the solar is not paid off. Lots of people blame the solar leasing companies for being slow on lease assumptions and subordinations, but when someone is simply trying to REFI, there is really no need for a subordination of the UCC-1 lien.
My friend Patty Penrod, VP at Old Republic Title has been in this business as long as me and she told me today “a UCC-1 is not a foreclosable lien, so creates no lack of priority for a new deed of trust, and ORTC has a $75 endorsement that insures this for an upcoming lender”. Thankfully, some lenders are accepting this title-insurance company’s endorsement in lieu of a formal UCC-1 subordination or termination, but some lenders are not and still looking at these recorded UCC-1s as a risk. This is driving consumers, escrow officers and loan officers nuts. Yes, driving me NUTS, but I love my job and I am sure the guidelines will change in the next year or so when more people complain and the Department of Financial Protection and Innovation steps up, or worse, someone loses a house because of a UCC-1. The bottom line is that if a person loses their home to a mortgage company foreclosure, unlike a junior lien or junior mortgage loan, the UCC-1 is NOT wiped out. The UCC-1 remains as the security instrument for the chattel collateral. The SOLAR leasing company will still own and have the right to their solar panels and battery.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
