Help deciding between PPA and buying

[tjcooper]

I live in Silicon Valley, I want to estimate good prices for 8007 KWhr per year usage to get close to 98-100% energy coverage. I am told because of East-West facing roof of cement tile, that I will need 26 panels of 250 watts each. Can someone give me estimates of price for installation of such a system? The PPA proposals I have seen are for no cost and price of $0.162 KW and yearly increase maxed out at 2.92%. Is this a reasonable alternative to buying? My big question is I don't know how long I will stay in the house.....maybe 4years....maybe 20years. Just don't have a good foercast of what I will do after I retire. Any advice would be appreciated.
ted

[Amy@altE]

Do not do a PPA. The math does not work out. It will make your house more difficult to sell. Search on this forum for lease vs buy (pretty much same thing as PPA), you will see many many many threads saying the same thing. Even if you have to get a loan to buy, it will still be a better deal than a PPA. You may be able to get a PACE loan, which is awesome.

[azdave]

My big question is I don't know how long I will stay in the house.....maybe 4years...

If it is possible that you would move in four years than don't even bother with solar. Invest your money elsewhere.

If you purchase a system (even at a great price) you would still lose money moving so soon. Buyers do not want to pay very much extra for solar because they know it will cost you dearly to remove it and they will use that to their advantage when negotiating. Members here actually advise buyers to do just that if they are looking to buy a home that already has solar.

[ncs55]

I agree with Amy. I am not sure why someone would want to remove a solar system after they purchased a home. That seems to me to be a tactic purely to negotiate a cheaper price only and for a poor reason. The homeowner will save more on electric costs during the life of the system than the cost of removal later down the road. I have not had any calls to remove a solar system from a new homeowner. Usually the new owner calls and has the system checked out for performance and safety after or sometimes before purchasing the said home. If say when the modules degrade past the point of useful production the racking can be reused to install new modules. That can be an advantage. If I were purchasing a home I would prefer one that already has solar. However it is up to the buyer and what they want when looking to purchase their home. The realtors that we work with tell us that selling homes with solar is an easier sale and that it is not an easy sale. There are buyers looking for homes with solar and buyers that do not want homes with solar, it seems like a mixed bag from what I have heard. Removing solar does not cost that much and some installers will trade some of their labor for the modules. Especially some of the legacy modules not being produced anymore. The real costs involved with removal, are what the roofer charges to properly seal the roof back up. Tile roofs are usually less expensive to seal up as opposed to comp or torch down roofs. With tile roofs re sealing is usually done by removing the tiles and installing a new layer of underlayment while comp or torch down roofs usually require all new comp shingles or new torch down to properly seal it up. Also it does not mean that you have to reseal the entire roof, it is usually the roof under the modules.

[NYHeel]

If I'm selling my house then I'm selling it as is. Take it or leave it. Could you imagine someone demanding that you take off your vinyl siding or repainting the house because they don't like the color? On a owned solar system, it's part of the house. You want it great. You don't want it, then don't buy the house.

[ncs55]

Exactly what I think.

[tjcooper]

I have talked with a number of real estate brokers. They say if a lien is against the house for solar panels that will slow down (or stop) the sale because the new bank loan needs the lien removed before they will go forward with a new loan. The solar brokers say there is no lien against the house. So in that case (if it is completely true) then all I would have to do to convince the new buyer to buy the house is that they assume the remaining contract on power rates from the broker at like 30% they would pay to PG&E. I cannot imagine anyone who wants to buy my house would not want to assume the contract to pay less for their electricity. Anyone have a different opinion?
tjcooper

[J.P.M.]

I have talked with a number of real estate brokers. They say if a lien is against the house for solar panels that will slow down (or stop) the sale because the new bank loan needs the lien removed before they will go forward with a new loan. The solar brokers say there is no lien against the house. So in that case (if it is completely true) then all I would have to do to convince the new buyer to buy the house is that they assume the remaining contract on power rates from the broker at like 30% they would pay to PG&E. I cannot imagine anyone who wants to buy my house would not want to assume the contract to pay less for their electricity. Anyone have a different opinion?
tjcooper

Yea, since you ask, I'd never buy a house with any solar on it, especially and particularly with an ordinary lease or a PPA attached to it. For one thing, the size will most likely be too large, meaning I'll pay for something I.m not going to use, or too small, meaning I'll need a bigger system - with all the attendant problems of finding matching/compatible equipment as well as some likely regulatory hassles. Also, from what I've seen, there's more than a small likelihood that an existing system was installed by a vendor I'd not want on my property, especially if it involves a lease from SolarCity or such likes.

Be very careful on what folks tell you about loan/mortgage approval with respect to solar leases. Get your own information from the mortgage source.

[ButchDeal]

I have talked with a number of real estate brokers. They say if a lien is against the house for solar panels that will slow down (or stop) the sale because the new bank loan needs the lien removed before they will go forward with a new loan. The solar brokers say there is no lien against the house. So in that case (if it is completely true) then all I would have to do to convince the new buyer to buy the house is that they assume the remaining contract on power rates from the broker at like 30% they would pay to PG&E. I cannot imagine anyone who wants to buy my house would not want to assume the contract to pay less for their electricity. Anyone have a different opinion?
tjcooper

This is bs. Why would you get financial advice from realtors? People have seconds and construction loans all the time as well as. Helocs. They are paid off as part of the closing just like the main loan. The lease is another matter entirely. The lease does not convey so you will have to convince the buyer to take on the lease or pay it off seperatly. Most people would not want to take over your lease. They could get their own loan, solar and incentives, but in any case it is a drastic bargaining leverage you handed to the buyer. PPA and lease are very bad for seller.

[J.P.M.]

in any case it is a drastic bargaining leverage you handed to the buyer. PPA and lease are very bad for seller.

Nicely put. Next time someone asks me why I think they made a bad choice by leasing, I'll use that as one of the reasons.