Should I assume a solar lease?

[J.P.M.]

And dont forget, if you do buy this house, and you do assume the lease... if you ever decide to sell for whatever reason, you will go through this all over again.

I would really push for the buy out, even if I had to put some money in the hat.

I wouldn't put money in something I didn't want. I might be willing to tolerate something I didn't want that's ill suited to my needs for some price relief from the seller - like half the sum of the remaining payments or more.

[J.P.M.]

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.

But the imaginary carrot of nothing down with no concern for future consequences is a strong lure for the myopically nearsighted.

[J.P.M.]

Yep. Same situation is happening to an acquaintance of mine. Divorce is forcing sale of home, but all potential buyers have refused to assume the lease and buyout price far exceeds the value of the equipment.

And more PITA: Determining the fair value of the equipment. I'm not sure that's even possible in any remotely reliable sense.

[Alisobob]

Leases are an albatross around the neck as you are finding out.

And dont forget, if you do buy this house, and you do assume the lease... if you ever decide to sell for whatever reason, you will go through this all over again.

I would really push for the buy out, even if I had to put some money in the hat.

[thejq]

People are just "funny" when it comes to these leases, and that article further proves that...it's this stigma that you have this contract for 20 years...but what's your contract with the POCO? Indefinite? What are you going to do, cancel your electricity? Not likely.

My parents are like that with their cell phone bill. They have T-Mobile pre-pay because they don't want a contract. They've had the same phone number for years and will continue to do so, but for some reason, they feel better about not being on a contract.

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.

[ericf1]

Leases are an albatross around the neck as you are finding out.

Yep. Same situation is happening to an acquaintance of mine. Divorce is forcing sale of home, but all potential buyers have refused to assume the lease and buyout price far exceeds the value of the equipment.

[J.P.M.]

The current owner's usage is a lot more than your current usage. However, you have not much more than a vague idea of what your usage will be in the new home. Looks like maybe lower than your current usage, but with a larger home , hard to say. You'll probably use a lot less A/C. My guess is you'll stay ~~ the same as your current usage.

Many leases are sized for close to 100% offset, which seems to make approx. sense given the system size, likely output and current owner's usage.

While not a fan of leasing, partially for reasons this thread admirably exhibits, I'd agree with those who suggest playing a little hard ball with the owners and looking for some price relief - probably about $30K because: 1.) A lease is not something you want and didn't know about. 2.) The system, even if it were not a lease, is not of your choosing and is oversized by a factor of 2 for your needs, and you have no intention of paying more on a monthly basis than you'll use.

I'd also remind the seller/agent that electric rates for the upper tiers are actually going DOWN real soon, making the monthly payment even less attractive.

FWIW: I understand the idea/emotional tug of the "perfect house". I've owned one many times. There is always another house.

Leases are an albatross around the neck as you are finding out.

[Alisobob]

Also, the seller may be willing to subsidize our assumption of the lease - so perhaps a $30K payment from the seller would even things out?

Bingo...

[HX_Guy]

Except if the buyer is too educated and knows the same system will cost him much less if he buys it outright and keep it for 20 years. For example, my calculation of my energy cost is ~ $0.06/KWh over 20 years. So why should I lease a system that costs more than twice / KWh? Especially if the production is too much, and the excess is sold back at $0.04/KWh (the current SDGE wholesale rate).

Well sure...IF the potential homebuyer has plans to do solar anyway, then a purchase would definitely be the way to go. But I'd say that's the exception, and not the rule. Most people would probably just stay with the status quo and pay the POCO their rates.

People are just "funny" when it comes to these leases, and that article further proves that...it's this stigma that you have this contract for 20 years...but what's your contract with the POCO? Indefinite? What are you going to do, cancel your electricity? Not likely.

My parents are like that with their cell phone bill. They have T-Mobile pre-pay because they don't want a contract. They've had the same phone number for years and will continue to do so, but for some reason, they feel better about not being on a contract.

[gvl]

^ That

http://www.bloomberg.com/news/articles/2014-06-23/rooftop-solar-leases-scaring-buyers-when-homeowners-sell

[thejq]

Well in those instances the seller and or realtor probably did a poor job of educating the buyer of what exactly they are buying.

What exactly is the argument against buying a house that has a fixed/set electric bill that's lower than it would otherwise be if the house didn't have solar...and it costs you nothing additional out of pocket.

Except if the buyer is too educated and knows the same system will cost him much less if he buys it outright and keep it for 20 years. For example, my calculation of my energy cost is ~ $0.06/KWh over 20 years. So why should I lease a system that costs more than twice / KWh? Especially if the production is too much, and the excess is sold back at $0.04/KWh (the current SDGE wholesale rate).

[HX_Guy]

Well in those instances the seller and or realtor probably did a poor job of educating the buyer of what exactly they are buying.

What exactly is the argument against buying a house that has a fixed/set electric bill that's lower than it would otherwise be if the house didn't have solar...and it costs you nothing additional out of pocket.

[gvl]

With some exceptions I suppose, the majority of the buyers will want to leverage the situation to their monetary benefit by making the seller to pay out a portion of the lease, and the amount will likely exceed all the savings from the reduced electric bill that the seller has accumulated prior to the sale of the home, especially if this is a relative recent leasing contract. Not to mention some buyers might just be scared off by this additional complication which may lead to the need to lower the asking price in the first place.

[HX_Guy]

My only problem with leases is that you're likely to lose $$$$ in the event you need to sell your home. Other than that I think it is a great idea.

Lose money in what sense?

[gvl]

My only problem with leases is that you're likely to lose $$$$ in the event you need to sell your home. Other than that I think it is a great idea.