Should I assume a solar lease?

[HX_Guy]

Seriously?

So if I'm looking at a house, and they have a solar lease, as a buyer
A> I have to qualify to assume the lease
B> I have to pay $70K for a system that would cost me $30K to have installed
C> the system is likely oversized or undersized for me (which means I either pay extra to the POCO for power if it's oversized - or I pay extra to the leasing that I get no benefit from if it's undersized.
D> It's one more thing I have to worry about in what's very likely the biggest financial transaction I'll do in my life.

A) Qualifying for the lease is a pretty basic thing...it's credit score based and nothing else. If you qualified to buy the house, there shouldnt be an issue qualifying for the lease.

B) Well, that's what happens when you finance something. You're paying 3X probably of what the house actually costs over 30 years. And you're paying X amount more when you finance your car. I'd venture to say most people dont have $35k cash to pay for a system, and if they did, they probably wouldn't plop it all down on solar.

Most people who are buying solar are probably going to finance it I would assume and depending on the length of the loan (there are typically 12, 15 and 20 year loans)...the difference you end up paying vs a lease may be very close to the purchase if its a long loan. If it's a "short" term loan, like 12 years, then you overall pay less for the system but your monthly payments will be double at least, and much higher than what your normal electric bill probably was...most buyers can't and won't wrap their heads around that. The high monthly payment, even though it's for a shorter amount of time, gives them sticker shock.

Like I've said over and over...yes a cash purchase is better any day...but a lease is still much better than not doing solar at all.

[Alisobob]

Seriously?

So if I'm looking at a house, and they have a solar lease, as a buyer
A> I have to qualify to assume the lease
B> I have to pay $70K for a system that would cost me $30K to have installed
C> the system is likely oversized or undersized for me (which means I either pay extra to the POCO for power if it's oversized - or I pay extra to the leasing that I get no benefit from if it's undersized.
D> It's one more thing I have to worry about in what's very likely the biggest financial transaction I'll do in my life.

X2 on all points...

+ E> WTF is going to happen if I ever sell, and have to drop this lease on someone else?

[Ian S]

$268 x 12 months x 19 years is $61,104.

To buy a 11k system outright is about $44,000 - Minus the 30% rebate = $31k.

Why would you even consider paying double?

You're missing the point that it's essentially financed for 19 years. Do you also object to getting a 30 year mortgage on your home because you wind up paying double for it?

[SleepingDragon]

Honestly I won't be willing to buy any house with a solar lease or PPA.

[foo1bar]

All good points.

I guess for me, I just can't wrap my head around how people buying the house wouldn't want the solar, lease or otherwise.

Seriously?

So if I'm looking at a house, and they have a solar lease, as a buyer
A> I have to qualify to assume the lease
B> I have to pay $70K for a system that would cost me $30K to have installed
C> the system is likely oversized or undersized for me (which means I either pay extra to the POCO for power if it's oversized - or I pay extra to the leasing that I get no benefit from if it's undersized.
D> It's one more thing I have to worry about in what's very likely the biggest financial transaction I'll do in my life.

[J.P.M.]

All good points. How does SDG&E handle overproduction?

Currently, SDG & E pays NEM customers what they call the wholesale value of the energy - basically what they pay for the energy commodity itself. That amount has been running about $0.05/kWh +/- a bit for some time now.

At true up, if there is a net excess generation for the prior 12 months, the excess kWh will be rolled forward to the next year. Or, the cust. w/excess gen. can request a payment for the excess. The amount of payment is equal to about $0.05/kWh X the number of excess kWh for the prior year. That may change some with rate reform but looks to be not much change for now. In the now unlikely appearing situation that CA ever gets a SREC market going that may also effect things.

[Ian S]

Some of us wouldn't buy a home with an existing PV system on it for reasons that have already been discussed. Oversizing, overpriced, no roof maint., crappy installation
( as you may well attest) etc. to name a few.

All good points. How does SDG&E handle overproduction?

[J.P.M.]

All good points.

I guess for me, I just can't wrap my head around how people buying the house wouldn't want the solar, lease or otherwise.

I mean you need electricity right? So you can either buy it from the POCO at 15¢/kWh or whatever or you can get it from you leased system for 10¢/kWh. The end result is the same...why would the lower payment be a deterrent?

Again I go back to the stigma about it as the only real reason because when you look at numbers vs numbers, I can't see how it's not clear as day to someone.

Some of us wouldn't buy a home with an existing PV system on it for reasons that have already been discussed. Oversizing, overpriced, no roof maint., crappy installation
( as you may well attest) etc. to name a few.

[HX_Guy]

I wouldn't think solar lease and utility contract with POCO is a fair comparison. For the latter, you pay what you use and can cancel any time when you move. If you don't pay the utility, the most the POCO can do is to cut off your service and send the bill to collection. With solar lease, you have to agree to allowing them to put a junior lien on your property. Unless you go bankrupt, the lien cannot be dismissed, or until paid in full. Most people who sign solar leases don't realize that 20 years is a long time to commit. Very few will live in one place for that long. Unfortunately they don't know how bad the problem is until they want to sell.

All good points.

I guess for me, I just can't wrap my head around how people buying the house wouldn't want the solar, lease or otherwise.

I mean you need electricity right? So you can either buy it from the POCO at 15¢/kWh or whatever or you can get it from you leased system for 10¢/kWh. The end result is the same...why would the lower payment be a deterrent?

Again I go back to the stigma about it as the only real reason because when you look at numbers vs numbers, I can't see how it's not clear as day to someone.

[J.P.M.]

It really depends on many factors.... If someone choose to lease a SP system in CA, I don't think he/she isn't good with making financial decision..... (don't get me wrong, just IMO) especially when building a solar and selling it within 2 yrs.

Yes, solar is free and $0 down....

++++++++++1

[silversaver]

Depends on the market and the seller.

If I were the seller and the buyer showed me an estimate of $30K to buy a brand new system, but the buy-out was $70k I think I'd be willing to negotiate.
(Probably also be really pissed at the guy who sold me the system)

IMO someone who put 11kW solar system on the house roof - and then is selling 1-2 years later is most likely someone motivated to sell that house.
So they're probably going to be willing to make more concessions to make the deal close.

It really depends on many factors.... If someone choose to lease a SP system in CA, I don't think he/she isn't good with making financial decision..... (don't get me wrong, just IMO) especially when building a solar and selling it within 2 yrs.

Yes, solar is free and $0 down....

[foo1bar]

It is like a "Contingency" to purchase the house. you buy and you assume the lease. take it or leave it. I think that will be seller's attitude.

Depends on the market and the seller.

If I were the seller and the buyer showed me an estimate of $30K to buy a brand new system, but the buy-out was $70k I think I'd be willing to negotiate.
(Probably also be really pissed at the guy who sold me the system)

IMO someone who put 11kW solar system on the house roof - and then is selling 1-2 years later is most likely someone motivated to sell that house.
So they're probably going to be willing to make more concessions to make the deal close.

[gvl]

Seems to me that in an area - Carlsbad - where a typical home seems to go for in the neighborhood of $800K, getting some relief say $30K from the seller for the buyer taking on the lease doesn't seem outlandish to me. YMMV.

I can hear his/her wife/husband saying "I told you..."

[Ian S]

Seems to me that in an area - Carlsbad - where a typical home seems to go for in the neighborhood of $800K, getting some relief say $30K from the seller for the buyer taking on the lease doesn't seem outlandish to me. YMMV.

[silversaver]

It is like a "Contingency" to purchase the house. you buy and you assume the lease. take it or leave it. I think that will be seller's attitude.