Solar Panel Company

Kruite · April 2019

I will provide more details if needed but here is the scoop.

I was curious if a solar company's offer was better than another I received (and flatly rejected; they want at least 124 a month and that just isn't going to make my monthly expenses cheaper within the next 5 years)

Solar Company B wants to lease me a 24 panel array which they say will generate about 8,400 kWhrs over the course of a year (have yet to determine if that's true, but let's give them the benefit of doubt here)

The deal is for $80/month a couple months after they install/insulate/redo the attic space. They estimate a lower end savings of $500 a year, up to $985 (including their monthly lease). Except that they own the panels, will offer me warranty for any replacement/repair of said panels free of charge, and I cannot claim a tax credit for having them on my property. I will have the option at the end of a 20 year lease to purchase the panels at a market rate (they are the sole deciders of what this current market rate is) after which I will be solely responsible for replacement/repair.

I suspect this is a shit deal. Even if I can save money on utilities, the real value of such an investment should be considering the tax credit and the long term payments of owning said panels.

What do you guys think? If you need more information I can go through the contract in more detail; but this was my first pass impression.

bowen · April 2019

I think solar leasing is a raw deal and you're better off just getting an equity loan on your house and using that to install them. But yeah that's a lot of "what ifs" to really make a decision tbh.

Enc · April 2019

Yeah if you are going to get a loan, get it through your mortgage holder. That way if you sell at least the whole affair easily goes with you. Lots of cases out there where the company, or the new buyer, aren't interested in seeing you leave or continuing your lease leaving you stuck with the panels on a house not your own.

Mugsley · April 2019

Here's a quote from a Clark Howard article from 2017, when Solar was (heh) heating up (emphasis mine):

While some people buy their system outright, most people put solar on their home through a lease agreement—often called a power purchase agreement (PPA).

With a lease, there are no upfront installation costs for you. You just pay a flat monthly fee or rate for the equipment and the energy you generate. The solar company typically handles necessary permits and takes any tax breaks or renewable energy credits—not the homeowner. They’re also the ones who handle ongoing maintenance and repair.

But there is a drawback to a PPA. Installing solar with a PPA does create a drag when you sell your home, because a buyer has to qualify for both a mortgage and the long-term PPA on your panels. Very often, it can be harder for a buyer to qualify financially for the PPA than for the mortgage to buy your home!

Ultimately, my preference is for you to buy solar equipment, rather than lease it, if you’re financially able to do so.

Jasconius · April 2019

They're building a mandatory solar neighborhood in my town. I talked to the construction manager, and out of 105 homes built & sold, only ONE of those buyers decided to actually take ownership of the panels as opposed to leasing them. These are high end homes, the people buying them are not reckless with their money. A big reason why I think they're going with lease is that is the panels themselves are something like 20 grand out the door, and maintenance? lol

You're looking at the end-of-lease in the wrong light. You're concerned about buy-after-lease and market rate of 20 year old solar panels that may well be uber obsolete.... but you're forgetting that you can tell them to just take the fuckers off and go lease some new ones (or buy new ones since in 20 years they'll probably be way cheaper)

The conventional home-ec wisdom of buying them over leasing them, in my opinion, does not hold up in this unique circumstance, mostly due to the variables of availability and price of maintenance, overall reliability of the product itself (do you know? does anyone?) and the future of the panel industry & technological innovations

I would lease, and I would be looking at things like guaranteed production (do you still pay full lease price if the panels don't produce as advertised?) and early termination penalties (let's say a panel technology comes out that's 6 times better.... do you have to wait another 10 years? Or can you pay a penalty and get out?)

Then finally make sure their estimate is taking your roof geometry and exposures into account... in the neighborhood I'm referring to, the production is pretty variable (tens of dollars per month variable) based on how the house and panels are oriented.

Kruite · April 2019

Not sure if they have a good grasp of what the panels will actually do on my roof; but I have plenty and space east and west for them to place them.

The terms of the lease say they will pay the difference towards my account in regards to that saving estimate, but only for the first year (aka, if I only save 100 rather than 985, they will credit 885). The lease is oddly specific about this bit.

ceres · April 2019

Does either company have a minimum time frame you can have their stuff around and use the service, or can you really just tell them you're done after next month and have them cut everything off with no penalty?

tinwhiskers · April 2019

JJust to be clear you will pay them, $80 a month. So $960 a year? They will generate 8400 KWH a year. In order to "save" $500 a year, you need to be paid $1460 for that electricity so 17.5c per kWh. In order to save 985, 23.2c per kwh.

I'd check your electric bill and see if that is anywhere near what you are paying, or just look here for averages. https://www.chooseenergy.com/electricity-rates-by-state/

Also the panels will degrade over time. So depending on the panels, you might be getting only 95% of that number by year 2/3 and <90% of it from years 5 to 15.
https://energyinformative.org/lifespan-solar-panels/

This just seems like a scam. Maybe I've misunderstood it, but I always thought leasing worked on a "they put up the put up the panels, pay you a pittance, but after 7/8/10 w/e years the panels are yours".

With how you are explaining this....

Here is how I would do this as them(as a scam). I would sell you the shittiest solar panels possible, probably ones no where near making 8400 kwh a year. Eat whatever I have to pay you in year 1(and you'll recognize some savings from basically just having your roof reinsulated and shaded. And then laugh all the way to the bank as you don't generate anywhere near enough electricity to cover the leasing cost on the panels.

Think of it in terms of ROI. Their return on this is only 19k, and they are going to collect it incrementally over 20 years. And they have to be financing most of these costs in some way(though the tax credit will offset some of this). If they put up a 10k system, and are paying 4% on it, at the end of it they;ll have made ~5k over 20 years on a 10k outlay. Thats a 2% annual return for them. It's shit. But if they put up a 5k system, eat the $500 to you at the end of the year, now they're making 12k over 20 on a 5500 outlay. That's 5%, compound.

Hell the real goal is probably to install the panels, claim the tax break, and in 1-2 years when you realize you are getting screwed, charge you a bunch of lease brake fees, and end up in the black and have all the equipment to install on someone else.

mts · May 2019

We lease our panels and our rate is not limited to a year. The rate does go up at an equal rate to what you might see with normal electric. If we under produce we don't pay more we still pay our base.
They cover any issues to the roof/leaks etc. We got ours through sunnova/trinity

zepherin · May 2019

One of the advantages of buying new is a tax credit, but the best value for solar comes from if you have roofing problems, that way you can roll the fix into the credit.

Jasconius · May 2019

the way it works where I referenced is, the panels are wired into the grid

the solar panels take 100% of their energy and feed it back to a power company controlled battery farm

they pay you for the electricity in the form of subtracting it from you bill. your hope is that the amount you save in electricity is more than what you pay on the lease

My realtor has a friend who is in this program, and he says they NET about $60 per month, but that's in a massive 5 bedroom house with 3000sqft air conditioned in south florida

Part of the appeal of this particular lease program is that it's sponsored by the power company themselves... I think I would question any random independent agency pushing a solar lease on you. How do you know they'll even be in business in 15 years?

bowen · May 2019

Really though if you've got equity in your home a HELOC or collateral loan will be a lot cheaper than you'll expect. Average solar installation is about $15k in the US per home. 10 year loan would be something like ~$160 a month with a 5% interest rate (you can do better than that on most HELOCs if your credit isn't shit).

Yeah that's about double what they were offering, but all the savings are yours, including any tax rebates and energy programs in your area. That's 10 years instead of 20 too, and most panels only have a lifespan barely longer than 20 years. You purchasing them at market rate after all that time? No way.

Unsecured credit line might even be a better option than what they're offering for lease.

Kruite · May 2019

tinwhiskers wrote: »

JJust to be clear you will pay them, $80 a month. So $960 a year? They will generate 8400 KWH a year. In order to "save" $500 a year, you need to be paid $1460 for that electricity so 17.5c per kWh. In order to save 985, 23.2c per kwh.

I'd check your electric bill and see if that is anywhere near what you are paying, or just look here for averages. https://www.chooseenergy.com/electricity-rates-by-state/

Also the panels will degrade over time. So depending on the panels, you might be getting only 95% of that number by year 2/3 and <90% of it from years 5 to 15.
https://energyinformative.org/lifespan-solar-panels/

This just seems like a scam. Maybe I've misunderstood it, but I always thought leasing worked on a "they put up the put up the panels, pay you a pittance, but after 7/8/10 w/e years the panels are yours".

With how you are explaining this....

Here is how I would do this as them(as a scam). I would sell you the shittiest solar panels possible, probably ones no where near making 8400 kwh a year. Eat whatever I have to pay you in year 1(and you'll recognize some savings from basically just having your roof reinsulated and shaded. And then laugh all the way to the bank as you don't generate anywhere near enough electricity to cover the leasing cost on the panels.

Think of it in terms of ROI. Their return on this is only 19k, and they are going to collect it incrementally over 20 years. And they have to be financing most of these costs in some way(though the tax credit will offset some of this). If they put up a 10k system, and are paying 4% on it, at the end of it they;ll have made ~5k over 20 years on a 10k outlay. Thats a 2% annual return for them. It's shit. But if they put up a 5k system, eat the $500 to you at the end of the year, now they're making 12k over 20 on a 5500 outlay. That's 5%, compound.

Hell the real goal is probably to install the panels, claim the tax break, and in 1-2 years when you realize you are getting screwed, charge you a bunch of lease brake fees, and end up in the black and have all the equipment to install on someone else.

my bill is about 9.5 cents per kWhr. including the fuel adjustment. I'm going to tell them I'm not interested. As soon as this guy started to try and get my to sign all these on the spot after the initial "assessment" my red flags went up.

hold on a second. re reading the early termination section and it's quite bold. I'll repost the juicy bits

Kruite · May 2019

The contract defines the whole lease as "Term" and defines what counts as a default in a different section.

This is labeled "5.Term, Early Termination"

...If we choose to end this agreement after a default by you and repossess the Solar Equipment, then you agree to pay all reasonable costs incurred by us in repossessing, storing, and selling or otherwise disposing of the solar equipment from the Premises and detaching the solar equipment from the Premises; these costs will be charged to you based on our actual out of pocket costs incurred as a result of repossessing, storing, and selling or otherwise disposing of the solar equipment. Alternatively, in the event of default, we may accelerate the amounts due under this Agreement, at our option and in our sole discretion. If we choose to accelerate the amounts due under this agreement and you fail to pay that amount to us immediately after our demand, or if you otherwise fail to pay us any amounts owed under this agreement when due, you agree to reimburse us for all our reasonable our of pocket costs associated with collection of amounts you owe us under this agreement, including but not limited to all out of pocket court costs and attorney's fees, which fees, if applicable, shall not exceed 25% of the amount payable under the lease."

it goes on like that.

There's a clause in there that claims that this agreement is binding to any of my heirs.

Also there's a forced Arbitration clause in there, which I can only opt out of by mailing in a notice of declaration of refusal within 30 days of signing.

There are no terms in which I can cancel the lease; I am able to cancel within 7 days of the start date.

so yea, I think I'm going to pass

bowen · May 2019

binding to your heirs

lmao, boy howdy I sure hope no one ever challenges them legally because that contract isn't worth piss

CelestialBadger · May 2019

"Let's go green!"
"OK, only if you sell your firstborn son to us."
"Scratch that, let's shovel some coal."

This sort of thing is what gives green energy a bad name.

Hevach · May 2019

"Binding on heirs," is a common thing in leases. Usually ends up meaning, "We can basically take your entire estate but can't touch your heirs' stuff."

bowen · May 2019

Assets like that are usually just taken back aren't they? There's no reason for the successor issue when they have a tangible good they can just reclaim on a death or new mortgage. Or am I thinking about this wrongly?

Enc · May 2019

Its usually just a way to trick people without lawyers, which recently made heirs often are.

Kruite · May 2019

Yes but the way it's worded its as though they may want to go after me for the whole lease. They also wanted 1800 dollars anytime the panels may need to be removed or relocated, so I suspect all those unspecified fees would be of that order or magnitude at the very least.

You don't sign an agreement like that when it's worded as though they are going to screw you over and you sign away any right to object to being fucked.

V1m · May 2019

It does seem kinda like an attempt to turn you into a sunlight-sharecropper on your own property.

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