residential leasing

russ

Re: residential leasing

@ JBurgesss - Thanks!

Now to read and understand it!

Russ

newenergy

Re: residential leasing

Jburg - thanks for posting all that.

Energy Efficiencies wrote: »

Sorry, but I couldnt handle reading 11 pages of posts...I dont offer any type of lease program to clients because I figure if they have good enough credit to qualify for a lease, then they should buy the system outright with a second mortgage, remodel loan, etc. The payback here is around 7 years with the local rebates from the utilities and feds, and less than 4 for business because of MACRS..not including rate increases..so why would you even think of leasing...other than the no out of pocket some leasing companies offer...get real. This poster is going to pay out of pocket probably significantly close to buying the system. if you are paying for example 15% less on your bill for EVER, you can just as easily pay a loan off monthly and own the equipment in less time than you can buy out on the typical lease... Leasing companies are there to make money. PERIOD.

One other thing....when they come take the solar property off your roof, do they re-shinge? If not, what covers the roof penetrations that were made to install the system?

Energy Efficiencies,

I sell solar in SoCal so I'm no competition for you there in CO. I know this is probably a huge question and too much trouble, but is there a short answer for how you figure the value of the MACRS?

JJones

Re: residential leasing

russ wrote: »

@ Energy Efficiencies - Agreed 100% - The old saying that when something sounds too good to be true it usually is applies.

Claims are made that are totally unsupported - no supporting documents offered. The leasing sites do NOT offer their lease up for public inspection - wonder why?

Utilities are much more controlled and regulated. The leasing companies are much more like Kirby vacuum cleaner or home siding salesmen - get in and get a deal - the details are none of the suckers business anyway.

The offer of a 500 dollar kickback if you line up a friend or neighbor is really low in my opinion.

Actually I was offered $750 by one leasing company that visited my home.

lesyl

Re: residential leasing

I’m the original poster. It’s taken me a long time to screw up the nerve to make this post, but I hate it when someone starts a thread and then doesn't follow up with a eventual conclusion. So here it goes.

In spite of all my passionate defense of leasing, we ended up buying a system. Short version of a long story: I was finally persuaded to get a couple more recent bids for buying. It turns out much has changed in the relatively short time since our last bids. In the end, the final cost of buying cost was about the same as leasing. But clearly with purchasing come some big advantages.

In my own meager defense, I always readily admitted that buying is better than leasing. But when I thought there was a huge difference in final costs (I think it was 2 to 3 times), this seemed liked one of the very rare cases when leasing actually made sense. I’m glad to see someone posted the full SolarCity lease because I would still argue that there times when leasing makes sense, and there are a lot of misconceptions out there about leasing. In fact, both owners of the companies we dealt with admitted that leasing had its place.

But I’ll also admit it seems like those cases when it make sense are a lot fewer than I thought just a few months ago. Leasing clearly no longer made any sense in our situation.

The system was turned on Dec. 6. It’s produced 275 kWh hours in that time; 224 of which has gone on the grid as surplus.

So, there you have it. Let the I told you so's begin.

solar_dave

Re: residential leasing

lesyl wrote: »

I’m the original poster. It’s taken me a long time to screw up the nerve to make this post, but I hate it when someone starts a thread and then doesn't follow up with a eventual conclusion. So here it goes.

<snip>

So, there you have it. Let the I told you so's begin.

No I told you so from this quarter! Congraties on getting your system running, how about some details of the purchase.

PS Glad your time here paid dividends.

russ

Re: residential leasing

Don't think I saw anything about the grid connect part in the Solar City lease.

It would be the responsibility of Solar City as I see it but there was no section specifically stating how it was all to work.

The system seems sized so that you would always buy some power from the grid.

Other weak points in that lease seemed to be - (I am definitely not a lawyer! though I probably wouldn't admit it if I were)

1) If you decide to sell and the new owner didn't want the system - you have to eat it - this was the case for any circumstances you want out of the lease

2) You give them the legal right to an easement to the system

3) Roof repair responsibility was very, very limited - 3 inches around any penetration

4) A limited one year installation warranty? The overall warranty is for the life of the lease though

5) No equipment brand names

6) If the system fails they repay you the lease cost during the outtage - forget what make up power costs you

7) A ten year output guarantee

8) You provide them high speed internet access at your cost

9) Damage caused by a power surge is not their problem - meaning it is yours

10) You guarantee to maintain all risk insurance coverage in the amount of 33,750$

11) No purchase option

12) You have to keep trees and bushes trimmed - what if it your neighbors tree?

13) You have to keep the panels clean

14) Sales taxes, real estate taxes and the like are to your side

15) All tax credits, solar offsets, RECs and the like are the property of Solar City

16) You guarantee to keep the system clear of all liens

17) The lease and all obligations are passed on to you heirs - meaning payments, maintenance etc even if they are a few states away.

18) Don't declare bankruptcy

All in all, the lease seemed more fair than I had expected.

Russ

drees

Re: residential leasing

lesyl wrote: »

The system was turned on Dec. 6. It’s produced 275 kWh hours in that time; 224 of which has gone on the grid as surplus.

Congrats on getting your system online and following up! Have details on the system you ended up going with?

mike95490

Re: residential leasing

lesyl wrote: »

.....
The system was turned on Dec. 6. It’s produced 275 kWh hours in that time; 224 of which has gone on the grid as surplus. .

Holy Cow ! What size is it, and what do you expect to harvest/consume in the summer with long days ?

niel

Re: residential leasing

can i take a guess at about 3.5-4kw system? mike brings up a good point for why so much excess over that which you use? are they cutting you checks at the end of the year?

lesyl

Re: residential leasing

It's a 4.2 kWh system and is estimated to produced around 8,400 kWh year. This time of year we typically use anywhere from 250 to 350 kWh a month. During the summer months, we'll use between 1300 to 1800.

wdegrace

Re: residential leasing

You know, you couls also purchase solar on your own cheaply by simply installing a smaller system. OR, use microinverters...that way you can slowly build a larger system over time. Literally, you can install one panel and one microinverter and spend what you can actually afford.

AND PV prices are trending downward! Maybe in two years the prices will be more appealling to you.

I would not go with any kind of "plan" with any company. Whats the guarantee that they will even be around in 5 years.

bmet

Re: residential leasing

russ wrote: »

All in all, the lease seemed more fair than I had expected.

Russ

Another 17 reasons why I am in the wrong business.

solarix

Re: residential leasing

In my area, the outfit of "young kids" pushing a PPA deal and aggressively expanding their business, just went belly up and the owners lost their house and everything. Now we have a bunch of solar customers with nobody supporting them and a bad impression in the community in general. Chalk another one up to fancy financing.

Solar Experience

Re: residential leasing

BB. wrote: »

One thing I will caution you about adding solar PV system to your home... I would not count on it adding any value to your home... Perhaps you might be able to justify $0.30 on the dollar in the sales price to a potential buyer--but many folks are afraid of solar PV and it may actually decrease the value of your home (unless you remove it).

Couple thoughts on this.

Acceptance of solar will probably increase over the period of the lease, its mostly a culture shock issue. There will come a time when solar is expected. Whether an installation looks the same in ten years is another matter. Panels will probably become more aesthetic as more flexible materials technologies advance.

Moore's law applies to solar circuits and they will become increasingly efficient. When considering future value, ask yourself how much demand there is for a ten to twenty year old computer system, and you will have some insight into how much value those will have to a prospective home buyer several years from now.

As personal power generation becomes more available, devices which take advantage of that capacity may appear.

Of course the flip side is in the inevitable price increase of conventional fuel sources.

While there is a lot to be said for meeting your energy needs now, rather than later, to me it makes more sense to add as you are capable than to make a lease based on assumptions about your current power requirements. At the end of your lease cycle, the technology will probably be obsolete and the players in the market may have changed dramatically.

Seems to make more sense to own outright.

russ

Re: residential leasing

From what I saw in the Solar City lease, two points (of several) that I would be uncomfortable with - Points I copied from the previous post.

1) If you decide to sell and the new owner didn't want the system - you have to eat it - this was the case for any circumstances you want out of the lease

17) The lease and all obligations are passed on to your heirs - meaning payments, maintenance etc even if they are a few states away.

You can not easily move away and just leave the house empty.

Russ

BB.

Re: residential leasing

Solar Experience wrote: »

Panels will probably become more aesthetic as more flexible materials technologies advance.

I would be very leery of flexible panels--It is difficult to make the glass panels last more than 5-10 years--Flex panels (plastic, etc.) just seem to fall apart in many applications. Plus the flexing (wind, thermal expansion, etc.) can cause eventual mechanical failures in sealing, wiring, panel material, etc.

I would want to see some real world installations with a decade or two under their belt (or very good accelirated life testing results) before I spend a lot of money on them.

Moore's law applies to solar circuits and they will become increasingly efficient. When considering future value, ask yourself how much demand there is for a ten to twenty year old computer system, and you will have some insight into how much value those will have to a prospective home buyer several years from now.

Moore's law really applies to electronic circuits and the ability to scale them down to smaller and smaller physical sizes--Saving space, energy, and increasing speed.

Solar panels themselves, are based on large physical size to capture the solar energy and the physics of the materials involved. You might improve efficiency of a silicon solar panel by a few percentage points by playing to glass surface treatments, transparent front electrodes, etc...

To to go from 15-18% to nearly 40%, you need to change material to Galium Arsenide (used in space and 10-100x the cost) and such.

People are working hard to reduce costs (thin film/printed panels/etc.)--But, in my humble opinion, you are not going to see things double/halve every two years (Moore's law).

However, we did have a nice run down in pricing in the last decade or so of solar panels themselves from $10+ per watt down to $3-$1 per watt... But it is hard to believe that can continue (raw material costs for glass/plastic/labor/frames/mounting racks/wiring/etc.).

-Bill

BB.

Bringing back an old thread on Solar Leasing...

Interesting article on SunRun's business model vs how it affects the home owners, estates, and eventual sales:

https://www.bloomberg.com/graphics/2019-sunrun-solar-panels/

Basically, conservation saved much more money (new owners, less energy intensive lifestyle--Aka, not a HAM radio person):

Two days after walking through Jug’s ham shack, we made an offer. A week later, just before we entered escrow, we learned the solar array hadn’t belonged to Jug. It was, in the language of the industry, a third-party-owner, or TPO, system, belonging to Sunrun Inc., the largest provider of residential solar in the U.S. I started looking into the TPO model. It’s used less often than it once was, but it’s been important in making residential solar, once out of reach for most people, much more widespread. The reason is simple: Homeowners usually pay nothing upfront. A company like Sunrun puts solar panels on your roof, connects them to your home, and claims a tax benefit for owning the system. Going forward, you pay Sunrun to provide the bulk of your electricity needs instead of your utility.

I’d soon learn that the system was tied to the title of the house. It appeared that if we bought Jug’s place, we’d have to assume his lease arrangement with Sunrun. I wasn’t sure how I felt about this as a buyer, but it definitely piqued my curiosity as a journalist. I set out to examine the value proposition carefully.

....

There’s more to the story, including the fact that Jug’s solar panels never worked at full efficiency. This was because of what Sunrun characterized as “severe shading” caused by the next-door neighbor’s tree. That’s right: Sunrun installed the system beneath a big old tree. This makes me again question the judgment of Jug’s salesperson. Sunrun has a production guarantee—if the system underperforms, you get a credit. In Jug’s case, $203 was credited to his account on July 17, 2017, half a year after his death.

As I write this I’m pregnant. The life Alex and I pictured the first time we walked through Jug’s house, now our house, is taking shape. And let me tell you about our electricity bill. Had we assumed Jug’s lease, we’d be paying $79 a month to Sunrun (the second escalator would have kicked in) plus at least $10 to SoCal Edison to stay on the grid, minus $7.50 for net metering. We’ve been in the house 10 months, and our average SoCal Edison bill is $30. Compared with becoming Sunrun customers, we’re saving $50 a month. We’re going to give some of that to help protect the environment.

FYI--Somebody is making money with GT Solar "financing deals"--But it is probably not you.

-Bill