Should I assume a solar lease?

[silversaver]

I have 2 friends both have SP lease with high lease payment. the buy off price is way too high. Actually they are the ones told me not to go with SP because of the premium price...

[J.P.M.]

Just curious as to whether any of those older leases ca. 2011 were prepaid like mine.

They were not.

[Ian S]

BE CAREFUL !! READ THE LEASE !!

I've looked at more than a few Sunpower leases over the last 6 yrs. or so. None of them, regardless of vendor, show the type of valuation schedule for early buyout as shown in Ian's lease.

Some of them (prior to 2013 it seems), show some drop in year 7 more than other years - an ~~ 8% to ~ 15% drop in that year of the year one value, dropping the residual buyout value to about 60% of what is almost always an inflated original price.

After that year, the buyout price decline goes back to a more linear decrease year/year.

I don't doubt Ian's veracity one iota, but maybe AZ requirements are diff. than CA. See Sec. 8 and Exhibit B of the lease agreement for particulars, but in any case, read the lease.

Just curious as to whether any of those older leases ca. 2011 were prepaid like mine.

[J.P.M.]

The problem with buyout of this system is that it's too early into the lease to make sense. The lessor will lose important tax benefits. Based on my lease's buyout provisions - only applicable to homeowners who sell (except for that one magic year 7) - the cost of the buyout is huge for the first few years but declines until year seven after which point it starts to rise again. Of course those provisions may only apply to the prepaid lease not monthly. If anyone has a monthly SP lease, it would be interesting to compare.

[ATTACH=CONFIG]6300[/ATTACH]

BE CAREFUL !! READ THE LEASE !!

I've looked at more than a few Sunpower leases over the last 6 yrs. or so. None of them, regardless of vendor, show the type of valuation schedule for early buyout as shown in Ian's lease.

Some of them (prior to 2013 it seems), show some drop in year 7 more than other years - an ~~ 8% to ~ 15% drop in that year of the year one value, dropping the residual buyout value to about 60% of what is almost always an inflated original price.

After that year, the buyout price decline goes back to a more linear decrease year/year.

I don't doubt Ian's veracity one iota, but maybe AZ requirements are diff. than CA. See Sec. 8 and Exhibit B of the lease agreement for particulars, but in any case, read the lease.

[foo1bar]

now you have 27k in hand, why buy it out?

IMO it's only worthwhile to buyout if can buy out for significantly less than the payments over next 19 years.

At this point, buyout now vs. pay over 19 years is a simple net-present-value / best-use-of-funds question.

Now, the lease company will cover his SP system for next 19 yrs and he has $27k in hand. Why not?

He also has a $268/month obligation with that $27k in hand.
If he could get rid of the $268/month obligation for $35K, it's probably the right choice to do that.
If it would cost $75K then that's not the right choice.

[silversaver]

now you have 27k in hand, why buy it out? I'm sure the pay off is going to be high. $268 X 12 months X 19 yrs = $61,104(remaining total payment) -$27000 (credit) = $34,104 (total payment of 19 yr.)

Now $34,104 /12 months / 19 yrs = about $150 net per month.

Now, if you purchase a 11.45kW SP @$4/Watt = $45,800 - 30% Fed credit = his net cost $32,060. That is almost the SAME amount he pays for next 19yrs!!! That means he is financing a 11kW SP system for 19yrs with almost 0%!!!

Now, the lease company will cover his SP system for next 19 yrs and he has $27k in hand. Why not?


Please don't talk about the system might be too big for him....etc. This is just a break down.

[Ian S]

Big +1 on that. Also, check the lease terms with respect to buyouts.

The problem with buyout of this system is that it's too early into the lease to make sense. The lessor will lose important tax benefits. Based on my lease's buyout provisions - only applicable to homeowners who sell (except for that one magic year 7) - the cost of the buyout is huge for the first few years but declines until year seven after which point it starts to rise again. Of course those provisions may only apply to the prepaid lease not monthly. If anyone has a monthly SP lease, it would be interesting to compare.

ScreenHunter_01 Apr. 09 12.07.jpg

[J.P.M.]

Now if yiu can negotiate a buy out with the lease

Big +1 on that. Also, check the lease terms with respect to buyouts.

[MikeInRialto]

Now if yiu can negotiate a buy out with the lease

[Ian S]

Hello everyone. The seller is giving us $27K back at the close of escrow so that should pay for the solar lease for about 1/2 of the time remaining on the lease and we have now agreed to assume the lease.

Sounds like a good deal. Glad it turned out well for you.

[ernie24]

Hello everyone. The seller is giving us $27K back at the close of escrow so that should pay for the solar lease for about 1/2 of the time remaining on the lease and we have now agreed to assume the lease.

[J.P.M.]

Hah, and try that in Phoenix when it's 114º outside.

I realize it's not everyone's cup of tea, but folks did it for a long time before Willis Carrier came along.

[HX_Guy]

That may be true for that person you know, but living in a home without a connection to the grid is not necessarily allowed everywhere.

Most towns and cities in the US require utility connection to keep their Certificate of Occupancy. Anyone that wants to totally disconnect needs to know what regulations they have (or don't) need to meet for where they live.

Hah, and try that in Phoenix when it's 114º outside.

[SunEagle]

I know what you are saying.

If I cancel my poce, I will not lose my house.
If I do not pay the poco, I will not lose the house either.
If I cancel a solar panel lease without a payout or if I do not pay my solar panel lease than most likely I could lose my house since their is a lien against it.

And yes, years back I knew a person that canceled the poco. That person had the meter removed and the wires from the pole to the house disconnected and lived there for many years after that.

That may be true for that person you know, but living in a home without a connection to the grid is not necessarily allowed everywhere.

Most towns and cities in the US require utility connection to keep their Certificate of Occupancy. Anyone that wants to totally disconnect needs to know what regulations they have (or don't) need to meet for where they live.

[HX_Guy]

I know what you are saying.

If I cancel my poce, I will not lose my house.
If I do not pay the poco, I will not lose the house either.
If I cancel a solar panel lease without a payout or if I do not pay my solar panel lease than most likely I could lose my house since their is a lien against it.

And yes, years back I knew a person that canceled the poco. That person had the meter removed and the wires from the pole to the house disconnected and lived there for many years after that.

Actually you wouldn't lose your house if it had a lien on it...you just wouldn't be able to sell it until the lien was satisfied.