I think we probably can count on saving $40-$50 per month. The downside is you are taking on risk. You figure your breaking point, when your monthly savings are equal to the lease buyout, is probably 12 years out. For me I would never assume I was going to stay put for that long, I think 5-7 years would be the maximum I would want to assume. If you know you are going to stay put then you can come out ahead but its definitely not guaranteed.
There a other companies that will do these quotes all online. You can spend a couple minutes and get a couple of other quotes. If your committed to doing this PPA style lease at least get a couple of quotes and maybe save $60 per month. Your first quote isn't usually your best quote. Solar City might sweeten the deal if you get a better quote from someone else.
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I have a Solar City leased system scheduled for 8/15.
From my read of the contract I will pay 11.5 cents per kwh for ALL juice produced. No other payments to solar city. Any monthly over production will offset future power company use. So if we over produce a couple months the cold snowy months will be offset.
Seems like a good deal. I will know how good by February or March
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Electric rates go up and believe it or not go down too. In any one year, rates can take a big jump, then stay stable for a while, or decrease a little bit. Unscrupulous vendors and others with skin in the game capitalize on people's emotions and irrationality to fearmonger and peddle stuff to the ignorant. Often, taking a 10 yr. average tells a more reasoned tale. For most of the U.S. anyway, a 2 to 3% annual increase is probably closer to what's commonly been seen. More than that on a compounded, annual basis is most always B.S. Period.
Also, something I've noticed in people's usage, but hardly ever talked about: it seems to me that about half the increase in people's bills that I've seen is from increased usage, the other half or so is from rate increases. Usually, the folks who are the most indignant and farthest in denial about that are also the most ignorant about their situation. They use more, and blame the POCO for all the increase which is usually nowhere near as bad as they're told or believe.
Solar PV is a lot of fun, but it's about the least cost effective way to knock down an electric bill. Usually, other things like changing thermostat settings and turning off lights and appliances are more cost effective. After that insulation, sealing the building envelope, and such measures are next. In the end, it's always cheaper not to use something than to get more of it.Leave a comment:
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that is a riduclous price for that system. I have a 10kw (almost twice the size of your proposed) system on a 2300sq ft house that cost 37k to install. I paid just under 9k after rebates and tax credits. the fact that THEY get the benefit of your over production without it being applied to your bill means their proposal is shyte. find another dealer / installer. I am paid the same amount for what I over produce during the day as I pay for what I use at night up to a certain point. after that point I am still paid 50% of my price. which means most months I have a zero bill or a credit. and the credits pretty much pay for those months I don't have a zero bill.
as far as what they say your increase will be that is totally speculation and overblown for effect. Remember the sales guy is a shill and making a pitch. NEVER take them at their word without getting further research (which you are obviously doing)
you are saving 40 bucks a month in your worst month , but the fact that they are not paying you for over production means (IMHO) you are not saving near that much and it may actually wind up being a net loss to you rather than savings.
Math makes my head hurt so I will leave it to others to work the actual numbers.
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Thank you for your response.
Its true that the cost of buying your own would be better given current incentives. But I was wondering how much water their "omg your electric company's bills will increase by 5 or maybe 8% per year!" really holds? Has anyone's electric really increased by that amount?
My other question is that month to month would this system actually save any money? I know there are other ways to get into solar but lets pretend that buying isnt an option right now, am I better off staying with electricity than I am getting into this system?Leave a comment:
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Yeah so they jack up the purchase price because they don't want you to purchase, common for leasing companies to do that. My only issue is that at 33k its an overpriced system, at 39k its a joke. I would say $250 is fair market for their'30 year maintenance'.
I would get creative with financing, people talk about installing solar DIY. Probably better for most of us to pursue DIY solar financing. Solar City and other leasing companies are the easy and expensive way out. With some legwork and filing out some form you can save yourself thousands.
I don't know anything about your particular finances but other have mentioned 401k loans as an option(pay yourself interest while you make an investment yielding 15%), if you have equity you can cash out refi, you can look into government sponsored loan programs, buy lottery tickets, etc...
If it were me, I would try and get in early on the Mass Residential Loan program. I would email the person in charge and try to be an early adopter of this. I think this represents another subsidy that should be taken advantage of. I think there is a clear belief that many of the current incentives are lining the pockets of the lessors are lessees are getting only a small fraction of the subsidies and are taking on most of long term risk. I look at your deal and your break even point is probably 10 maybe 15 years out. The leasing company is probably whole 1 or 2 years into the lease.
Get some more quotes, tell them your are looking at for a target price in terms of $3.50/W or whatever you deem a good target price. See if people want your business. Once you know how much someone is willing to install a system on your house, the leasing equation is a lot easier to solve. If no one will touch your house for less than $4.50/W them maybe the current Solar City is a good deal, I think you will find otherwise. This is a lot like buying/leasing a car. You always start with a purchase price and then work through financing. Dealers love the sucker who focuses only on monthly payments.
Sorry I know I am rambling. I think leasing makes a lot of sense for financing solar in general(depreciating asset with positive tax implications etc). I just think there are a lot of variables and Solar City is good at playing the shell game.Leave a comment:
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They said IF I were to purchase the system with their included 30 year maint. warranty it would go for about 39,250!!With the lease I like to basically reverse it back to a purchase price and see where things land.
With the fixed cost option(the better of the two you were offered) you can take the present value of the 20 years of payments using a discount rate that you could reasonable borrow at, call it 5% then your present value is $12,000 + $2,000 which breaks down to a $14,000 purchase price or $1.86/w after incentives.
Add back the federal and state tax breaks(now you are at $3.35/w).
The SREC are more difficult but call it around $8,000 present value. I assumed 7 credits at $280 per over 10 years. Overall our pre-incentive price rose to $4.40. There is risk in my mind with the SRECs, I don't know the outlook for the prices of those. My intinct tells me the prices will drop as solar become more prevelent but Massachusetts seems to 'managing' the market by changing the targets each year. Someone more familiar with Massachusetts SREC market might be able to put a better figure on the value of SREC over a 10 year timeframe. There is a good article here on the subject:
The escalator option is pretty much a worse deal. You start with a present value of $15,000 rather than $14,000 using a 5% discount rate. Call it $0.13/W penalty for no down payment or $4.53/W
Take all this with a grain of salt, it is pretty back of the envelope calculations. I don't think $4.40/W installed is a great price. If you can find a source of funds for 5% then you would be better off looking at purchase. You should be able to get a system installed for $3.20-$3.50/W range but you will only know if you talk with some other installers. You might also ask what Solar City would sell you the system for, my guess is $33,000(bad deal). I am a big fan of the pre-paid lease if you have the cash to make the large upfront payment, you might look at those too. I think in these complex incentive states I might be more inclined to purchase, in California all we have is the federal tax break so pricing is much more transparent.
see attached for yearly breakdown purchase optionsLeave a comment:
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With the lease I like to basically reverse it back to a purchase price and see where things land.
With the fixed cost option(the better of the two you were offered) you can take the present value of the 20 years of payments using a discount rate that you could reasonable borrow at, call it 5% then your present value is $12,000 + $2,000 which breaks down to a $14,000 purchase price or $1.86/w after incentives.
Add back the federal and state tax breaks(now you are at $3.35/w).
The SREC are more difficult but call it around $8,000 present value. I assumed 7 credits at $280 per over 10 years. Overall our pre-incentive price rose to $4.40. There is risk in my mind with the SRECs, I don't know the outlook for the prices of those. My intinct tells me the prices will drop as solar become more prevelent but Massachusetts seems to 'managing' the market by changing the targets each year. Someone more familiar with Massachusetts SREC market might be able to put a better figure on the value of SREC over a 10 year timeframe. There is a good article here on the subject:
The escalator option is pretty much a worse deal. You start with a present value of $15,000 rather than $14,000 using a 5% discount rate. Call it $0.13/W penalty for no down payment or $4.53/W
Take all this with a grain of salt, it is pretty back of the envelope calculations. I don't think $4.40/W installed is a great price. If you can find a source of funds for 5% then you would be better off looking at purchase. You should be able to get a system installed for $3.20-$3.50/W range but you will only know if you talk with some other installers. You might also ask what Solar City would sell you the system for, my guess is $33,000(bad deal). I am a big fan of the pre-paid lease if you have the cash to make the large upfront payment, you might look at those too. I think in these complex incentive states I might be more inclined to purchase, in California all we have is the federal tax break so pricing is much more transparent.Leave a comment:
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Do they pay you for over production?
How big is your house?
I would get some other estimates and see if they are in line with the one you have.Leave a comment:
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Thoughts on this SolarCity proposal? **Photos inside**
Hello all, first post here so be gentle
Solar City came to me and made the pitch. See photos of the proposal (just the initial pitch) that they sent to me.
Also attached is my typical bill, which usually runs about 120ish per month.
So there is either the pay nothing down plan that puts us at 10.6 cents per kWh with yearly 2.9% increases
or the other pay nothing down plan that puts us at 15 cents per kWh with no increases for 20 years.
Or I could give them 2,000$ down and lock in 10.7 kWh for 20 years.
Any thoughts on this?
downsides to this?
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