I signed an Incorrect Solar Lease- Can I get out of it?

[Esherman27]

Hello,

I was forced to take over a 20 year SunRun solar lease to purchase my home. I had to docusign the lease agreement (all 19 pages). I've been in the house for 5 months, barely run the AC and I have already generated a $500 SDG&E bill. After several calls between solar and SDG&E I found out that the agreement I signed was not the correct agreement. There was a change order prior to install that lowered the KW. I contacted SDG&E to find that the 4 years the house has had solar, they have not generated any credits. I am under paneled for my home size. Can I get out of this lease due to the fact that I signed an agreement that wasn't correct and had the wrong generation breakdown and more panels then what was actually installed in my house? I need to let this go as I'm saving no money and the lease increases as the years go up. I most definitely was miss-lead and robbed of any savings.

[ButchDeal]

you might be able to negotiate with them based on the fact that they are NOT producing what the contract that you signed has ...

[Esherman27]

I hope you are right! 2 story home with under 4 KW of paneling in an area that gets up to 95 degrees.

[ButchDeal]

I hope you are right! 2 story home with under 4 KW of paneling in an area that gets up to 95 degrees.

I have a 2 story home (not relevant for either of us) and under 4kW (3kW to be exact) and in an area that gets really cold and hot with heat pump and all electric.

BUT my utility electric rates are low, and my solar is mostly for backup power, and I own it...

Are you sure you don't have a PPA (Power Purchase Agreement) instead of a lease? if it is a lease and it states one size array, but the house has a different size then you have a good legal argument for renegotiating or just getting them to remove it.

[Ampster]

It is probably worth an hour with a good attorney to find out if you have a good case and against whom. There may be a seller representation issue as well. You have more leverage with Sunrun because presumably they provided you with the assumption documents. The one fact I would check is whether the payments you have paid are based on the original system or the smaller system.
if it were me, my strategy would be to have the system removed.

[Esherman27]

ButchDeal- I wish I knew more about this. My ignorance is my biggest battle. I looked at what I signed and it says PPA, but so not clear how that's different as everyone referred to it as the lease. There was supposed to be (according to the lease I signed) 4.9KW installed. I still have not seen this change order but know it was paneled less. I have a case number with SUNRUN and it has been over the 48 hour call back they said would happen. I've left a VM and email with no return yet. From what I see on the lease, I was supposed to average 9400 KwH's a year. The one they installed I guess is closer to 7500 Kwh's a year. The house has never produced a credit, even the month we weren't living there and were just painting, etc.

Ampster, I plan to ask for removal. I'm hoping Homeowners insurance or something can back me for a lawyer or legal help. I reached out to my Broker and she says it is ultimately sunruns fault as they had be take over the lease with the incorrect contract.

[J.P.M.]

Well, unless someone put a gun to your head, you were not forced to sign anything.

As for being mislead and robbed, looks to me like your own ignorance is the culprit. Caveat Emptor.

That aside, my condolences on getting involved with SunRun.

When you write "agreement", are you referring to the agreement you signed for the home purchase, the agreement you signed with SDG & E, the agreement you signed with Sunrun, or what ?

What do you mean when you write "... the agreement I signed was not the correct agreement" ?

Did SDG & E tell you that what you signed was not the correct agreement ? Or, did you find out separately from SDG & E during/after conversations with SDG & E? If SDG & E told you the agreement was not the correct agreement, why does SDG & E think so ?

Who initiated the change order ? You ? Sunrun? The POCO ?

Why was the change order initiated ?

What do you mean "...they have not generated any credits" ?

What do you mean by underpaneled ? If you mean you still have a may have a bill, well, you most likely will. Almost every SDG & E customer does.

Do you know that PV systems have variable output based on array size and several other factors ?

Even though this was kind of a light A/C season around here, after 5 months of an AC season, and depending on how close you are to the ocean, $500 is maybe a bit atypically low for an electric bill, particularly if you're inland. What's your zip ?

How large is the system and how much has it generated in 5 months ?

From how you describe the situation, it's hard for me to understand just what the situation is. It seems to me that you need an education. I'd respectfully suggest you educate yourself about how residential PV works, how NEM works and how you use and pay for electricity before you go further. I suspect things will go better if you do.

[Esherman27]

J.P.M.- I appreciate your VERY literal take on my message but in a situation where I'm trying to be to the point the "full" details are left out. Clearly no gun, but if I wanted this "dream home" for my children, it came with the "need" to take over the solar lease. I have several friends in the same town with solar and all have more panels and no SDG&E bill, they all have credits (aka overproducing from what they are using per month).... The lease was 4 years in when I assumed it. We were most definitely miss-informed by the seller and sellers realtor, told there were no SDG&E bills and the system was a "money saver." I do agree a lot of this is my ignorance but the most basic point here is I signed a lease that had the wrong panel size and wrong generation breakdown. The change order occurred prior to installation. So the lease I signed 4 years later was the original lease prior to the CO of lowering the panels (I still have not heard from SUNRUN about the lower panel size and the why). There was nothing signed with SDG&E only, Sunrun. I asked SDG&E to look deeper into my bill and found the seller had lied about no SDG&E bills. The system is under paneled and has never produced a credit through SDG&E, they have always owed monthly for the overage needed to be supplied by SDG&E. The lease breakdown I signed averaged the monthly SDG&E bill to be about $5, it's closer to $200.
I wish I knew the actual size of the system but I have not seen the change order to know what is actually on my lease. I'm averaging a production of 720 Kwh's by the Solar, but using an average of 843 kwh's per month. Again I am very conservative with my electricity. Every other solar owner I know keeps the house roaring on AC at all times, I do not. No peak hour laundry, etc... I do understand my education is poor, but I looked into the lease I was given, not knowing the lease I was given was incorrect. It was a smaller system actually installed.

[ButchDeal]

ButchDeal- I wish I knew more about this. My ignorance is my biggest battle. I looked at what I signed and it says PPA, but so not clear how that's different as everyone referred to it as the lease. There was supposed to be (according to the lease I signed) 4.9KW installed. I still have not seen this change order but know it was paneled less. I have a case number with SUNRUN and it has been over the 48 hour call back they said would happen. I've left a VM and email with no return yet. From what I see on the lease, I was supposed to average 9400 KwH's a year. The one they installed I guess is closer to 7500 Kwh's a year. The house has never produced a credit, even the month we weren't living there and were just painting, etc.

Ampster, I plan to ask for removal. I'm hoping Homeowners insurance or something can back me for a lawyer or legal help. I reached out to my Broker and she says it is ultimately sunruns fault as they had be take over the lease with the incorrect contract.

If it sais PPA then it IS a PPA which is a Power Purchase Agreement. It is NOT a Lease.

A PPA is your are purchasing power from the company NOT leasing the equipment.
With a lease you are leasing the equipment and own all the production from it.
With a PPA you pay for the power (kWh) it produces but not the equipment.

[ButchDeal]

J.P.M.- I appreciate your VERY literal take on my message but in a situation where I'm trying to be to the point the "full" details are left out. Clearly no gun, but if I wanted this "dream home" for my children, it came with the "need" to take over the solar lease. I have several friends in the same town with solar and all have more panels and no SDG&E bill, they all have credits (aka overproducing from what they are using per month).... The lease was 4 years in when I assumed it. We were most definitely miss-informed by the seller and sellers realtor, told there were no SDG&E bills and the system was a "money saver." I do agree a lot of this is my ignorance but the most basic point here is I signed a lease that had the wrong panel size and wrong generation breakdown. The change order occurred prior to installation. So the lease I signed 4 years later was the original lease prior to the CO of lowering the panels (I still have not heard from SUNRUN about the lower panel size and the why). There was nothing signed with SDG&E only, Sunrun. I asked SDG&E to look deeper into my bill and found the seller had lied about no SDG&E bills. The system is under paneled and has never produced a credit through SDG&E, they have always owed monthly for the overage needed to be supplied by SDG&E. The lease breakdown I signed averaged the monthly SDG&E bill to be about $5, it's closer to $200.
I wish I knew the actual size of the system but I have not seen the change order to know what is actually on my lease. I'm averaging a production of 720 Kwh's by the Solar, but using an average of 843 kwh's per month. Again I am very conservative with my electricity. Every other solar owner I know keeps the house roaring on AC at all times, I do not. No peak hour laundry, etc... I do understand my education is poor, but I looked into the lease I was given, not knowing the lease I was given was incorrect. It was a smaller system actually installed.

I think with a PPA there shouldn't be an SDGE&E bill. You should be dealing with SunRun for your power. They have a contract with SDG&E.

If the system is producing then you should have some credits on the bill from SDG&E. So if you set up your own billing direct to them, did they turn it on as a net meter account? if so you should see two readings, one for consumption and one for generation (not neither is consumption nor generation your actual, just your grid consumption and grid feed in).

However generally with a PPA you purchase ALL the kWh from the PPA and they buy extra from the power company.
I would highly suspect that your billing is just net set up right and sunrun as usual has their head up their A$$.

[Esherman27]

ButchDeal- Yes definitely a PPA with all I now see, thank you for this info!!. The system is producing but not enough Kwh to handle what the house is using so I'm forced to pay the difference to SDG&E. So the average monthly Kwh currently producing (very sunny clear weather) from the system is 720 the house needs on average about 843 Kwh's per month to not owe. the original Lease (that I signed, not the change order) shows a 6 month average bill from SDG&E and how the new system with the panels would produce enough to almost never owe SDG&E but $5 a month. Since they didn't end up installing the breakdown I signed, we are under paneled and not producing enough. The biggest problem is I have no clue what this change order ended up being and what they actually installed.

[ButchDeal]

Right but you already have built up a $500 SDG&E bill in 5 months and you still have to pay SunRun for the kWh they give you which looks like 720kWh a month on an escalation basis.
So are you better off paying SDG&E $100 a month plus your payment to SunRun for the PPA
or would you be better paying SDG&E for all 843kWh directly? Not sure that you have much choice since you signed the contract but you might have a choice to renegotiate the contract since you signed an inaccurate contract.
They do not like to change or remove the PPAs because they have amortized the incentives and depreciation over time and it is very difficult to redo that early. So if you know that going in you can use it as negotiation. The system on your house is not what you signed for. It doesn't matter if they have a signed agreement with someone else you now own the house and they sent the wrong agreement. They can fix it, remove it, or just leave in pace with you as the new owner, but they are in breach of the contract at this time...

[J.P.M.]

I think with a PPA there shouldn't be an SDGE&E bill. You should be dealing with SunRun for your power. They have a contract with SDG&E.

If the system is producing then you should have some credits on the bill from SDG&E. So if you set up your own billing direct to them, did they turn it on as a net meter account? if so you should see two readings, one for consumption and one for generation (not neither is consumption nor generation your actual, just your grid consumption and grid feed in).

However generally with a PPA you purchase ALL the kWh from the PPA and they buy extra from the power company.
I would highly suspect that your billing is just net set up right and sunrun as usual has their head up their A$$.

Primarily for the OP's benefit and information:

Aside from the idea that PPA's are a minefield, and also that SunRun is one of the solar bottom feeders, there is no sound basis I can think of for believing a PPA ought to eliminate a POCO bill, especially if there is a change in home ownership which can have, and usually does have a substantial impact on how much electricity comes into a residence from the POCO, either up or down.

The way PPA's work - at least in CA - A PPA customer has a contract with the PPA provider, in this case SunRun. SunRun puts their system on the homeowner's property. The homeowner agrees to purchase (from Sunrun) all the power the SunRun owned system produces at a specified price per kWh, probably with some annual escalation in that price of something like 3 % or so. The Sunrun PPA's in my HOA all have 2.9 % annual escalation.

The system owner (SunRun) takes responsibility for keeping the system in working order. The homeowner has responsibility to not mess with the system, pay for all the power the system produces at the agreed price, and not allow shading to get worse, or at least not bitch if shading is changed, resulting in system output drops as a result (trees grow, neighbors build stuff, whatever) and the homeowner can do anything about it.

Once the PPA is in force, the homeowner is responsible for two sets of bills. One from Sunrun for the power produced, and one from the POCO for the difference between what the homeowner uses and what the Sunrun system produces. The solar energy purchase agreement is between SunRun and the homeowner. The POCO billing is NEM and to the homeowner. However, Sunrun is not responsible for excess production or billing/credit between the POCO and the homeowner, at least not for any PPA's I'm familiar with in my HOA, which is all from SDG & E. Nor is that the setup as described in any of their PPA contracts I've seen.

I believe the portion of your statement: "... and they buy extra from the power company." is not correct.

If the system produces more than an account uses for any POCO billing period, the homeowner will still be billed by Sunrun for the power produced at the agreed rate. The homeowner will also get a credit from SDG & E for the excess production. But and as most of the informred around this forum know, the reimbursement from SDG & E or most any POCO will be at a much lower per kWh rate (~ $0.05/kWh vs. ~ 3-4 times that much for power bought from Sunrun under the PPA for SDG & E customers). So, depending on how oversized the system is, a system that produces excess power will very likely wind up costing a homeowner more than if a system were not there at all. That's one pretty good additional reason, among many reasons why it isn't a good idea to oversize a system.

[J.P.M.]

J.P.M.- I appreciate your VERY literal take on my message but in a situation where I'm trying to be to the point the "full" details are left out. Clearly no gun, but if I wanted this "dream home" for my children, it came with the "need" to take over the solar lease. I have several friends in the same town with solar and all have more panels and no SDG&E bill, they all have credits (aka overproducing from what they are using per month).... The lease was 4 years in when I assumed it. We were most definitely miss-informed by the seller and sellers realtor, told there were no SDG&E bills and the system was a "money saver." I do agree a lot of this is my ignorance but the most basic point here is I signed a lease that had the wrong panel size and wrong generation breakdown. The change order occurred prior to installation. So the lease I signed 4 years later was the original lease prior to the CO of lowering the panels (I still have not heard from SUNRUN about the lower panel size and the why). There was nothing signed with SDG&E only, Sunrun. I asked SDG&E to look deeper into my bill and found the seller had lied about no SDG&E bills. The system is under paneled and has never produced a credit through SDG&E, they have always owed monthly for the overage needed to be supplied by SDG&E. The lease breakdown I signed averaged the monthly SDG&E bill to be about $5, it's closer to $200.
I wish I knew the actual size of the system but I have not seen the change order to know what is actually on my lease. I'm averaging a production of 720 Kwh's by the Solar, but using an average of 843 kwh's per month. Again I am very conservative with my electricity. Every other solar owner I know keeps the house roaring on AC at all times, I do not. No peak hour laundry, etc... I do understand my education is poor, but I looked into the lease I was given, not knowing the lease I was given was incorrect. It was a smaller system actually installed.

Esherman: I'm not here to impugn your motives or hurt your feelings, but as an opinion only, what I see as your ignorance about methods of getting PV energy on a residence, how such systems are sized, and just about everything about the process will hurt you when until you get more informed.

PV systems are (hopefully) designed and sized to meet some portion or all of an electrical load, usually with the most bang for the buck as at least one, if not the primary goal - that is, optimizing the economics, and in doing so, often intentionally designed to offset less than the entire electrical load.

The load or portion of the load that your system was originally designed offset was and is, in all likelihood, different than your electrical load. That's because every household's energy use pattern is different. PV arrays will be different sizes. as looking at arrays in your neighborhood will quickly make abundantly clear.

Another reason an array might not offset an entire electrical load is because available areas for panel placement are different for every home. Perhaps besides having an electrical load that's different than your (and, even though you may not think so, quite possibly smaller), the available area for a PV system is less for your property than some others. If you need (want) a 25 m^2 array and you only have 20 m^2, something's got to give.

As for the seller misrepresenting the bills the seller had, I'd be careful about such statements until you get more informed and more information.

As an example only of how the seller could have been truthful: For lots of reasons that have nothing to do with economic optimization (because my array is not and was not designed to be cost effective), my electric bill for trueup as of 10/04/2019 was $2.97 for the year. My gross electrical use before any deduction for PV generation for the prior 12 billing periods was 7,518 kWh. Now, the average use in my HOA is about twice that at ~ 14,000 kWh/yr. Someday, I'll sell this place and go to the old farts home. When I do, I'll be able to honestly say and by way of backup, show very low electrical bills. But, chances are whoever buys this place will be as clueless about electrical usage, PV and POCO billing as most folks and see only low bills (another example of how people's ignorance is the real culprit in most of this). Such folks will probably use more electricity than I do - if they are like most everyone else around here probably something like 2X as much. If they do, right now, 14,000 kWh of electrical usage minus typical annual system generation of ~ 9,150 kWh will probably, at current prices, cost something like $4,000 - $4,500/yr. Maybe your use is higher than the prior owner's.

Still, it sounds like you were not given the honest or even whole story. Given that, and in any case, you'll be much better off if you understand how PV works, how your PPA (or lease ?) works, and how much you pay for it before you go further. If nothing else, you'll be better able to understand why SunRun did what they did or didn't do what they're obligated to do, particularly if they're pulling a fast one or as Butch writes (or at least seems to imply) they screwed up cluelessly. Youj'll also know more of the answers to questions you'll ask - always an asset in discussions - and also helpful if/when they start throwing terms and concepts at you that you currently don't understand.

Suggestion: Download a free pdf of "Solar Power Your Home for Dummies". Or, buy a more current hard copy for ~ $25 at bookstores or Amazon. A good primer that'll get you started if you choose to go that way.

As for an array size SWAG: 720 kWh/month production around here = ~ 8,600 kWh/yr. or so. With a mostly southern orientation, probably something like a 20 deg. slope and little shade, a reasonably well designed PV array will probably generate something like 1,700 kWh/yr per installed STC kW.--->>> 8,600kWh/yr/1,700 kwh/(yr*STC kW)) = ~ 5.0 STC kW might be close to your system size.

At 843 * 12 ~ = 10,000 kWh/yr. usage +/- some. FWIW, 8,600/10,000 = ~an 86 % offset of usage doesn't sound very off the mark if you had an owned, that is, not leased or not PPA'd system. Actually, for my money, it would probably be close to the most cost effective mix of PV and POCO bought power. But, it's a PPA (from your prior posts) or a lease (from the post I'm responding to) which changes the economics a fair amount.

You may say your home is underpaneled, and you're most certainly allowed to say, think and act that way. No argument from me on that score. I'd only suggest you consider educating yourself more.

If economics paly a role in the solar decision, as they often do, the goal for most smart money and informed folks is the right mix of solar and POCO power being defined as the one that results in the lowest long term cost of providing electrical service to a residence, and not necessarily a 100 % solar offset of an electric bill. Learn enough about how all this works and you'll come to understand why that's so and how to achieve that goal.

BTW: How much is the SunRun monthly payment supposed to be ? Also, keep in mind that you have a $120/yr. min. payment to SDG & E less ~ $72/yr. in climate credits we mostly all plus probably some of what are called non bypassable charges ("NBC's") which are always present. All that has the effect of making a 100 % off set even less cost effective in the sense that as long as you're going to have a min. payment, burn through enough POCO supplied electricity to equal the min. annual charge. If you wind up getting billed for 10,000 - 8,600 = 1,400 kWh/yr. and if you're on TOU rates, even if you use all 1,400 kWh at the peak summer rate of $0.53791/kWh for schedule DR-SES, you're talking $753/yr. and that's not likely to happen given your statement you don't use much, if any A/C. If you're still on tiered rates, all the 1,400 kWh/yr will be at a base rate of something like ~ $0.26 in winter at $0.29 in summer, or something like $350 - $375/yr. In both scenarios that would be in addition to what you'll pay SunRun.

They (SunRun) may be scumbags, but you may either be stuck with them or in your education find the deal isn't as bad as it looks now once/if they get their act together.

Read the lease/PPA, whatever it is you signed. I think you'll find that you might have an early buy out at 5 yrs. into the contract but you'll need to pay the remaining contractual obligations on the agreement, that is, all the payments.

After you read up, you might think about lawyering up.

[Ampster]

The only Solar City PPA I read had a 5 year option to purchase that was based on a market value appraisal. That may not apply in your case or be relevant if your objective is to have the system removed. However it may give you some negotiating leverage.
If your long term goal is to have a properly sized system and get some Investment Tax Credit benefit then that leverage might be useful in your negotiations with Sunrun.