Buying a house with leased Solar

[socialleper]

I'm looking at buying a house that has a solar lease through SunPower Capital LLC and don't really know what to expect. I've never owned at house with solar and don't know anyone that has them either.
What are the sorts of details I need to know as I go into this?
I know the current owner is 3 years into their 20 year lease. The current lease for a 1800 sqft house is about $250. This sounds a little high to me.

How lock tight are these leases? If I want to go to a different company is it like my cell phone or home mortgage where there is a way to change contracts or refinance?
Am I truly stuck with the same panels for 20 years? Are there occasionally upgrades as the technology improves or the equipment wears out?
We aren't looking to move out of this house again. Has anyone really contemplated what will happen at the end of these leases? The terms say you can buy it for "fair market value." Won't the market value of 20 year old panel be nothing?

[Mike90250]

Yes, buying a lease is problematic. The solar was installed for someone elses needs, it may be overkill for you, or not enough . And who pays for the repairs, and will they be prompt ? After 20 years, the street value would be "scrap" so you might get another 10 years of life, Whoops, got a roof leak, and the roofer has to move the lease panels, to fix it. Can he move the panels ? Do you have to call the lease company, have them move the panels, and then ding up the roof putting them back ?? Leases are toxic in my opinion,

[sensij]

Here is another similar thread:

https://www.solarpaneltalk.com/forum/solar-panels-for-home/solar-panels-for-your-home/309151-buying-vs-prepaid-lease

[peakbagger]

Run ! - The lease is second mortgage negotiated by someone else and has no real advantage to you. Have the seller get a buy out price and have them eat it as part of the negotiations. Unfortunately a lot of folks are in the sellers position. and they all are having to take hit when they sell.

[J.P.M.]

I'd tell them I do not want the equipment and want it removed before I consider buying the property. In the meantime, get a copy of the lease and read it. Note that the current leasee is responsible for the system, not you, and everything is done to protect the lessor. If they do remove it, insist that the roof be inspected for integrity before you go any further.

Suit yourself, but for all the other reasons given in this thread and lots of others, taking over a lease is, IMO, buying headaches and hassles.

Unless there is enough price relief from the home seller for you to buyout the lease (buyout being something the seller can and must do if you don't want the lease), I'd run from it. Too much hassle, unknowns and B.S.

[socialleper]

Yikes. I didn't realize there were a lot of problems with this. More and more houses where I live are getting them because electricity bills in the summer are easily between $400 to $600 dollars, around $200 in the winter, and its only cloudy when its raining, which isn't much. Only one house we've looked at had owned solar out of a dozen leases. I guess I thought this was a safer bet.

I really like the idea of solar panels, but buying them outright is impossible. Who has tens of thousands of dollars sitting around?

Ug, what a nightmare.

[J.P.M.]

Yikes. I didn't realize there were a lot of problems with this. More and more houses where I live are getting them because electricity bills in the summer are easily between $400 to $600 dollars, around $200 in the winter, and its only cloudy when its raining, which isn't much. Only one house we've looked at had owned solar out of a dozen leases. I guess I thought this was a safer bet.

I really like the idea of solar panels, but buying them outright is impossible. Who has tens of thousands of dollars sitting around?

Ug, what a nightmare.

Yea, and if you want to increase the likelihood of nightmares, get a leased system.

On the other hand, if you use your head, you can turn the situation to your advantage to lower the house price, or get to own the existing system for a song, or some combination of the two. That existing system is very probably not ideal for your situation. However, in the world of cost effectiveness, if the price is right a less than adequate system can be more cost effective than an ideal system if the price is low enough.

My experience is that people who leased did so more often because they were running, almost in panic from self inflicted high electric bills rather than moving toward lower electric costs, and while doing so fell victim to the common fallacious, pernicious and erroneous perception of nothing down. Their ignorance will probably cost them. They just don't know it yet. You did not create their problem. In a sense, you happen to be in a place to inform them and make a few bucks in the deal if you're a sharp and informed negotiator. It's just business.

[socialleper]

Here's what I have been able to figure out about the lease.

The rate started at $238.46. It is at 259.34 now and will be 405.40 at the end of the lease.
Edison says that the Generating Facility Nameplate Rate (kW) is 7.242kw
The estimated monthly energy production of Generating Facility (kWh) is 1043kWh
The house was built in the late 80s and has be well maintained. The HVAC unit is original. Its a single story 1800sqft house.

My current house is a two story with 1900 sqft, built around the same time, and there are only been some minor upgrades to a couple of the windows (I'm NOT a handy guy, and we usually don't have the cash to do big projects.)
My February bill from Edison was $213, with a totally monthly usage of 939 kWh and a daily average of 31 kWh.
In August my bill was $474, a total monthly use of 1820 kWh, and a daily average of 62.75 kWh.

Does taking over this lease make any financial sense?

[Wy_White_Wolf]

...
Does taking over this lease make any financial sense?

No. Leases are cheap to get solar on the house but cost you more in the long run.

WWW

[J.P.M.]

Does taking over this lease make any financial sense?

Probably not from my vantage point. The PITA factor isn't real favorable either.

[socialleper]

Probably not from my vantage point. The PITA factor isn't real favorable either.

Can you please explain that the PITA factor is?

[socialleper]

I can't wrap my head around how popular leases are if so many people don't like them.
The leases are unpopular, but buying solar outright is cost prohibitive. If both options are unpopular, how are there so many houses with solar?

[J.P.M.]

I can't wrap my head around how popular leases are if so many people don't like them.
The leases are unpopular, but buying solar outright is cost prohibitive. If both options are unpopular, how are there so many houses with solar?

Since you ask, some thoughts/opinion based on living in an HOA and reviewing 88 solar installations over the last 8 yrs. or so, about half of them leases:

Many folks are running from self induced high electric bills in semi-panic mode rather than moving toward sane energy use in a long term, cost effective manner.

Leases have low first cost. That's strong bait, but usually false economy. Leasing solar makes about as much sense as leasing furniture or appliances, but it's nothing down and immediate results.

Justified or not, more than few of those folks have a woody for the POCO. Anger, frustration and fear do not make for good decision making environments.

The crap peddlers feed them goes down easily because it looks like a fix to their problems. It's meant to be so, and at least partially relies on the ignorance and emotions described above.

Many residents are keeping up with the Jones. I've noticed what seems to be a rather strong tendency for PV systems to be clustered, often with 3-6 or so arrays on adjacent homes.

The ignorance of most folks with respect to residential energy use, PV and it's efficacy and cost effectiveness is sort of directly proportional to the probability of seeing an array on a roof. Ignorant people are easy marks.

At the end of the analysis, IMO only, while there are exceptions, if more folks were better informed and thought about what they were doing in a proactive way, there would be a lot fewer PV systems on roofs, at least in my HOA, those that did exist would be a lot smaller and better designed, and for the purposes of your inquiry, there would be a hell of a lot fewer leases, if any.

Still, not my house, life, money, and it's a free country. Just seems a lot dumber to me than it once was.

Just sayin'.

Take what you want of the above. Scrap the rest.

[sunnyguy]

1043kwh at $259 is $0.25/kWh. That's about the same you are paying without solar, but once you add back in the grid tie fees you will be paying more.

A new 7.2kwh system should cost around $15,000 after tax credit. Even if financed by a 10% loan you would pay it off in 7 years at $250/mo and actually own the equipment.

[SunEagle]

In Florida the POCO's are supporting a new bill that they state is needed to protect the electrical consumers by keeping out companies that can lease solar systems.

While I do not like the idea that the POCO's are in total control of solar here, I kind of like the idea that fast talking solar leasing companies can't take advantage of someone that is fooled into paying way too much for a pv system.