SolarCity 20-year lease too good to be true?

[russ]

Hi FT - We (especially me) are not always right but we attempt to provide the best advice and suggestions we can - this goes for not only Mike, Sunking and I but all of the group that helps out. Everyone is trying to help others. Several of the guys are very experienced - Rich is a solar installer.

Received the document and am looking at it now.

Probably the salesman just didn't know what he was talking about concerning the change and 1960$ payment requirement.

The FIT has no meaning if there is no export - possibly Solar City can take advantage of the program somehow.

If you live there for 5 years only then all you are doing is trying to make the home more attractive for sale. The low initial electric rates make this tough.

In the event of any lease Solar City claims all rights to SRECs, credits, incentives or whatever else is available. If you own the system these are yours.

The zero down with the monthly payment seems to offer no advantage - now or 5 years from now. The rates are too low.

The 1966$ down option - in 5 years you will see no benefit (only expense) but it would be attractive to a buyer it seems.

The outright purchase - they try to dress it up by extending the savings over a 30 year period but for your purposes that does not help. I can't see where it serves a purpose. They use a 5% electric cost escalation it looks like.

The 1966$ option with a 15 year cost for roughly 300 kWh/month of 3.6 cents is good. However, with your plans to move after 5 years you can only view it as paying 2000$ for a sweetner for selling the home in the future.

In any lease the warranties should cover the system for the time they own it - I am not clear they really say that.

Russ

[funkytipu]

Need Immediate help!

Hey Russ,

I have a very similar but unique situation. Slight difference is that in Oregon, they are running a Pilot Feed In Tariff program. In this case, if selected in the Pilot, Portland General Electric pays 46.8 per kWh for any electricity sold back to the grid. The rate is lockd in for 15 years.

https://www.pgesolarprogram.com/NoCapacity.aspx

Only a handful of residential customers were chosen and I was one of the lucky ones.

Solar City gave me 3 options - 1) 0 down Solar lease option, 2) Pre pay $1966 solar lease option 3) Just purchase the system for $4450 (With FIT, the system will be $10000 because I won't get $6000 Oregon tax credit due to the requirements of the FIT Pilot program.)

In my initial meeting, they had said that If I get chosen in the pilot program, there are no out of pocket expenses. However, once I got selected, they are saying that I need to pay $1966 to cover part of the cost.

So my question - is it worth purchasing the system for $10000 and then sell to PGE any excess power at 46.8 cents or do the lease in which case I only pay $1966 but Solar City will sell any excess power to PGE instead of me.

Send me your email and I will send you the proposals I got?

I will also attach a document that i sent to my Salesperson to address the concerns that I had regarding FIT and some comparisons.

The key is I am running out of time to take advantage of being on the Pilot as I have to say Yes or No to Solar City by end of Thursday morning as Oregon has a very tight timeline in getting all the paperwork in to them

Thanks for looking into it. Also keep in mind that I am thinking of moving out of this house in probably 6 yrs as my kids grow older and I will need more room.

FT

By the way, I really appreciate what you all are doing here. Without this kind of conversations, I would not have been able to make a sound decision on such a big investment.

[russ]

There are hundreds of thousands of people like me who want to install solar but do not have the funds, know how, time or desire to do all the paperwork . Leasing makes so much more sense to me for just these reasons. I live in CO, was just approved for a lease and am now looking at the system size.

You can save, in one case we were recently discussing, maybe 20% on your electric bill with a zero down lease - this was for one location in the Bay Area in California. You would have to -

1) Own your home
2) I expect good credit is required
3) Be comfortable with effectively putting your home up as security for the lease. If you can't pay the bill you can not just turn the payments off.

The hundreds of thousands of people out there wanting to lease? Maybe and maybe not.

Anyone that does not take time to learn about solar prior to signing a lease - just listening to the neighbor and barber - may well be in for a surprise.

In purchasing a system the individual does NOT do the paper work - that is the work pf the sales company.

Russ

[russ]

Hi Winsox - What is your purpose for wanting solar if I may ask.

Russ

[Winsox]

@ phubner - Thanks very much for what you've shared and to everone else for all of their opinions. There are hundreds of thousands of people like me who want to install solar but do not have the funds, know how, time or desire to do all the paperwork . Leasing makes so much more sense to me for just these reasons. I live in CO, was just approved for a lease and am now looking at the system size.

[russ]

@russ -

Sorry if I stepped on some toes when I posted my analysis on the offer presented to me (post #47). As I said in the portion of my post that you deleted, I choose not to go with the lease, so it wasn't praise for SC.

You noted that the lease seemed to be too good to be true and then supported your statement.

Russ

[rbtrrer]

LIONS & TIGERS & MAGICAL INVERTER FAIRYS...OH MY!!!

I'm staying tuned on this one

you guys ROCK

[Naptown]

Sorry not a mod
but I am suspicious of any deal where the financials are not disclosed.
Generally a purchase is better than a lease in the long run

[phubner]

@russ -

Sorry if I stepped on some toes when I posted my analysis on the offer presented to me (post #47). As I said in the portion of my post that you deleted, I choose not to go with the lease, so it wasn't praise for SC.

I was surprised by the lack of detailed numbers being shown in the thread, so posted the highlights of the offer that SolarC gave to me, and compared it to my local rates. It wasn't praise but my actual numbers.

I thought I was helping by sharing more numbers than most. Cest la vie.

[Naptown]

So I'm interested in putting a sysytem on my place but do not have the $3K - $8K needed lying around. Leasing looks like the better deal plus the insurance and upkeep on the equipment is included. Yes i would welcome the chance to look over the lease - winsox@netzero.net

Best way to do that is have them come out and take a look and prepare one for you.
Costs and terms will vary state to state and even county and utility.

[Winsox]

I just tried to upload my Solar City Lease to this thread. I would be interested to see what you guys think. I think it is a great deal. Problem is the PDF is over 700kb and the max file size I can attach is 78kb.

If anyone wants me to mail it to them, let me know your e-mail address.

So I'm interested in putting a sysytem on my place but do not have the $3K - $8K needed lying around. Leasing looks like the better deal plus the insurance and upkeep on the equipment is included. Yes i would welcome the chance to look over the lease - winsox@netzero.net

[russ]

I can't tell who sent me the document - whether one of those or another - or from another site. I have told the person that I would not do so.

Interesting about the shade problem - that is good overall though the person whose tree gets trimmed may disagree.

I did not note the clause that SC can sell the lease at any time as that is standard and to be expected.

The earlier lease that I had seen/got a copy of was not a good deal to me - much more in favor of the leasing company. This seems to be OK.

One thing people must remember is that this is for a portion of the overall electric bill. The remainder will be from the utility at current prices per kWh.

One should try to be careful how they locate this on the roof or property - a person might decide to add a separate system on their own later only to find out that it was very difficult due to the way the Solar City system was located. In that event one would have to get permission from SC and pay the cost of relocating the original system and do it to their satisfaction.

Russ

[mangoman]

Comments on the lease copy I received -

A) Far more fair than the earlier version I had seen - that was from Arizona if I remember right.

B) Everything is laid out clearly

This lease I can not complain about.

********************

From the lease -

1) You are responsible for any sales or use taxes on the monthly payment - present of future

2) You will keep the panels clean and prevent sun blockage - pursuant to the Limited Warranty and Guide. Don't know what happens if the problem is on the neighbors property.

3) If it is an agreement where you own the panels at the end of the lease, any taxes are to your account

4) You guarantee reasonable access will be allowed as required for system maintenance and a right of way if Solar City deems it necessary

5) Solar City insures the system

6) Any and all tax credits, incentives, renewable energy credits, green tags, carbon offsets, utility rebates - are the property of Solar City - now and in the future

7) Selling home? Conditions must be met (what I read are reasonable ones anyway)

8) High speed internet connection will be provided by the homeowner

9) Guaranteed energy price for the life of the contract is 21 US cents/kWh with no escalation

10) Production guarantees are provided and any excess production goes to the lease holder free of charge

11) Applicable law - Arbitration only is a condition of the contract

12) If your home is sitting empty - you keep on making payments

Russ

In reference to item 2, if these lease you are looking at is from California than there is the California Solar Shade Control Act (California Public Resource Code 25980-25986) that can be enforced on neighbors. It basically says that if I put in solar and you plant a tree that casts a shadow on at least 10% of my panels between 10AM and 2PM, then your tree has to go.

During the install of my panels I got the impression that some city owned trees might cause a problem with shade. I contacted the city and they have assured me that if at any time during the year shading was a problem that I should just let them know and they will take care of it in accordance with the CSSCA, even though cities can exclude themselves from the provision of the act under section 25985 of the act.

So far, the trees have not been a problem.

Can I ask, whose lease of the 3 that have either sent or offered to send you, that you are reviewing here? I believe csriram, dowzer and bob & tom have all offered theirs to you.

From what you post above, my contract seems very similar. About the only thing in mine that could be of concern that you do not list above is that SC has the right to at any time sell their interest in the lease to another party. Well as long as no parts of the agreement are changed as a result of the transfer than that is fine, if necessary.

Otherwise it seems my contract is quite similar to the one you review above.

[russ]

Comments on the lease copy I received -

A) Far more fair than the earlier version I had seen - that was from Arizona if I remember right.

B) Everything is laid out clearly

This lease I can not complain about.

********************

From the lease -

1) You are responsible for any sales or use taxes on the monthly payment - present of future

2) You will keep the panels clean and prevent sun blockage - pursuant to the Limited Warranty and Guide. Don't know what happens if the problem is on the neighbors property.

3) If it is an agreement where you own the panels at the end of the lease, any taxes are to your account

4) You guarantee reasonable access will be allowed as required for system maintenance and a right of way if Solar City deems it necessary

5) Solar City insures the system

6) Any and all tax credits, incentives, renewable energy credits, green tags, carbon offsets, utility rebates - are the property of Solar City - now and in the future

7) Selling home? Conditions must be met (what I read are reasonable ones anyway)

8) High speed internet connection will be provided by the homeowner

9) Guaranteed energy price for the life of the contract is 21 US cents/kWh with no escalation

10) Production guarantees are provided and any excess production goes to the lease holder free of charge

11) Applicable law - Arbitration only is a condition of the contract

12) If your home is sitting empty - you keep on making payments

Russ

[Naptown]

The name is probably confused on my part. The e mail I got didn't use a screen name.