Low Lease Price 5.52kw

Txrancher
Txrancher Registered Users Posts: 24 ✭
in Solar Beginners Corner #1
I am considering this lease arrangement on a 5.52kw system. what do you think ?? looks like under 4 year payback at .10 kwh

20 year lease, $2900 upfront, zero monthly charges, zero charges for the juice it creates. they maintain and insure. at lease end they will remove for free.

This seems like a good deal to me because if I purchase, I will not get the federal credit, as my income is not taxable.

this lease is based on Oncor paying them the $2/watt rebate, if I DYI a system they dont pay me the rebate

I am 56 years old, so Im not too worried about what happens after I turn 76, hope I make it that far

it seems my very worst exposure is $2900, and being a bit of a survivalist mentality.....ok Im a weirdo....if the "war breaks out" no one will be able to repo my system and I will have juice, although this system does not include a batt bank, Im on my own for that

worse case senario
they go belly up, someone takes away the system. however they will need a court order, I wont just say OK, and I am out $2900 minus any juice I got


best case scenario
either when they go belly up or in 20 years, they decide that 20 yr old panels are not worth the cost of removing and I keep them for no extra cost

My wife and I built the cabin ourselves with cash, so please dont think I will be frightened by "holes in the roof"
its a brand new metal roof and I will fix the holes myself somehow. here is a pic of the cabin on 20 acres in Texas.


5.52kw

24 panels Schuco 230 watt solar panel with 20 Year Warranty

SMA Sunny Boy 5000 Inverter with 20 Year Warranty
Racking roof mount system & extra roof flashing
PV Wire, Conduit, Disconnects, Combiner Boxes, Conductors, etc.
Online Performance Monitoring, E-Mail Alerts, LCD Graphic Display

System Design & Installation including a 20 Year Labor Warranty
Designs, Permits, Engineering, & Interconnection Agreement



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Comments

  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #2
    Re: Low Lease Price 5.52kw

    The price seems reasonable, yes your risk is all of the above but probably low. I have seen leases here as low as $0.50 a watt installed one time payment with a $99 residual.
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  • a0128958
    a0128958 Solar Expert Posts: 316 ✭✭✭
    #3
    Re: Low Lease Price 5.52kw

    I have an 8.1 KW (DC) leased system in the Oncor service area so you may be able to compare notes. See http://www.welserver.com/WEL0043/ for a lot of detail.

    Summary comments:

    There are leasing companies available to you in this area who have zero up front charge. You will have a monthly lease for 5, 10 or 20 years, though, with a residual due at the end of lease.

    Your $2900 cost is essentially your installation cost since a 20 year lease is close to lifetime ownership. At 5.52 KW (DC), your installed cost is thus $0.52/Watt. I don't know of any solar installation firm, lease or conventional purchase, where this amount is enough to cover employee costs, overhead, insurance, and making a profit, even when you include all of the things the company gets from you (the Oncor rebate, the tax incentive, and depreciation expense). Especially when the equipment is top of the line like what you list (Shuco panels, SMA inverter).

    It's even more questionable when you note that the leasing company is extending to you a 20 year warranty on the inverter. At some point 10+ years, that inverter will have to be replaced.

    Adding to the question is no residual charge at the end of 20 years.

    All in all, as presented, the deal doesn't make financial sense. I'm not saying the leasing company didn't offer you the terms you noted - I am saying that from a business point of view, from the leasing company's point of view, the deal is not profitable.

    I'd go into this deal with a high degree of skepticism.

    Best regards,

    Bill
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #4
    Re: Low Lease Price 5.52kw

    Usually how they play it is to book the value of the install at like $8 or $9 a watt and then get the tax deals at that value, so 30% of ($9 - $2 rebate) = $7 X .30 = $2.10 plus $2 a watt rebate + $0.52 = $4.62 which is actually above the install cost here, which is running about $4.25 a watt.

    Using those numbers it is a push on profit.
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  • a0128958
    a0128958 Solar Expert Posts: 316 ✭✭✭
    #5
    Re: Low Lease Price 5.52kw

    Yep, that's the depreciation part of the equation that I mentioned as one of the cash flow income streams available to the installer. For the Dallas area, booking the value of installs these days at $8 to $9 per watt would be dishonest.

    Best regards,

    Bill
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #6
    Re: Low Lease Price 5.52kw
    a0128958 wrote: »
    Yep, that's the depreciation part of the equation that I mentioned as one of the cash flow income streams available to the installer. For the Dallas area, booking the value of installs these days at $8 to $9 per watt would be dishonest.

    Nobody said it was good practice but nothing stops them from valuing it at any price they deem reasonable.
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  • kpc01
    kpc01 Registered Users Posts: 1
    #7
    Re: Low Lease Price 5.52kw

    any updates as to what you did? I'm in a similar situation and just outside Plano in Oncor area. I am trying to get a decent size system but they are wanting to do emphase microinverters and a little more money. Sounds like I'm dealing with the same company as you, but I haven't been able to find anything about feedback. The first quote was for 4.6kW and was about $3600 but the 7.8kW is around $6700 so we are getting pretty high in cost at this point.
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