SolarCity 20-year lease too good to be true?

[KRenn]

It is indeed ! However, $1 buy out ? Explain more. That's interesting clause in the contract.

Absolutely illegal, see the thread I posted on the subject.


Operational Lease can't become a capital lease and vice versa, if they're promising him a buydown, then he's entitled to his
tax incentives on that system because he's expected to be the ultimate owner at the end.

http://www.solarpaneltalk.com/showthread.php?4450-Illegal-solar-leasing-tactics

[KRenn]

I agree with the web site not being what they quoted and charged. I asked and the rep didn't know why but he suspected the continuous changes being imposed by both the gov and the utilities they don't have time. I'm APS and he said they had to change paperwork once a month with them. While the other utility out here (SRP) has done it four times in a month. I've been taking quotes for years now and Solarcity was my first run-in with the lease thing. That was three years ago, and it was a break even deal but your going green approach. As I worked my way up the reputable dealer chain the deals got better and better. Then this buy-out option showed up, and with QE3 just around the corner, plus I've no taxes, retired and fixed(income) I pulled the trigger. The populous is paying for this so I figure either you ride the train or get hit by the bus.

They're doing the same scam in-house lease that I warned about. Your system is probably going to take a long-time to install because
the financing is in-house, no legit company will ever promise a specific buydown price on a solar system, so that means you basically got
taken in that regard. You also gave them all your money up-front, so if they go out of business between now and then, you're screwed.

[KRenn]

It's a Sunnyboy 5000 inverter (don't recall more detail on that , but do have a question) and I'm getting 36 Sunmodule Plus SW250 panels. Would of gone 48 but I was a few sq/ft shy. They do everything from permit apps and fees to all maintenance. I basically just promise not to change anything and be prompt in reporting an issue, keep them relatively clean and keep an internet connection. The dollar buy thing I'm sure I could challenge 20 years from now if a dollar had any value They haven't done the engineering yet for the mounting system or the inverter placement.

My question about the inverter related to that model and my output. They don't seem to match, but its a question for another sub-forum.

And yes, I cashed in 7, 1 oz gold eagles I bought in 99 and gave PPS a check in full and kept the rest for what ever, the next four months power bill I guess. I live in the desert and 125F+ in not uncommon with a typical day at 115F in the summer

What they're doing is illegal. You can't promise a buyout on an operational lease. Also your inverter is way undersized to the system and will cripple your production if they are really only giving you a 5000 watt inverter........and in that lease pricing, they don't provide insurance, you now you're going to have to cover the $15-40 a month cost for that, while every other lease packages the insurance in. So yes, you actually didn't get that good of a deal.


Other companies are doing 9k's for $13k with full insurance, full monitoring for 20 years, full warranty on modules and inverters and taking 20% or less up-front and doing it through legit financial organizations.


So now, let's add up. $10,000 over 20 years. Minimum $3,000 over 20 years for insurance. $2,000 for a new
inverter after it burns out around year 13 or so. $1000 for monitoring.

Total you're looking at is roughly about $16,000 over 20 years, so yeah, based on the market in Arizona, you overpaid
by about $3000.


read the following thread, you've just been victimized by one of Arizona's common leasing scams.

http://www.solarpaneltalk.com/showthread.php?4450-Illegal-solar-leasing-tactics

[66tbird]

I agree with the web site not being what they quoted and charged. I asked and the rep didn't know why but he suspected the continuous changes being imposed by both the gov and the utilities they don't have time. I'm APS and he said they had to change paperwork once a month with them. While the other utility out here (SRP) has done it four times in a month. I've been taking quotes for years now and Solarcity was my first run-in with the lease thing. That was three years ago, and it was a break even deal but your going green approach. As I worked my way up the reputable dealer chain the deals got better and better. Then this buy-out option showed up, and with QE3 just around the corner, plus I've no taxes, retired and fixed(income) I pulled the trigger. The populous is paying for this so I figure either you ride the train or get hit by the bus.

[maestroX2]

It's a Sunnyboy 5000 inverter (don't recall more detail on that , but do have a question) and I'm getting 36 Sunmodule Plus SW250 panels. Would of gone 48 but I was a few sq/ft shy. They do everything from permit apps and fees to all maintenance. I basically just promise not to change anything and be prompt in reporting an issue, keep them relatively clean and keep an internet connection. The dollar buy thing I'm sure I could challenge 20 years from now if a dollar had any value They haven't done the engineering yet for the mounting system or the inverter placement.

My question about the inverter related to that model and my output. They don't seem to match, but its a question for another sub-forum.

And yes, I cashed in 7, 1 oz gold eagles I bought in 99 and gave PPS a check in full and kept the rest for what ever, the next four months power bill I guess. I live in the desert and 125F+ in not uncommon with a typical day at 115F in the summer

Kind of interesting they put $1 buyout. I go back and look at 1bog proposal whether leased (SunEdison) or purchased. Their FMV:-

Fair Market Value
Year 6 $22,378.08
Year 20 $10,800.70

[OCJeff]

Numbers aren't adding up...

I looked at their site. It looks like the "Rebate" (State or Utility doesn't say) is $1.95/watt and then add to that the FED credit of 30% (after rebate) plus a state tax credit of $1000... Seems like some pretty nice deals out there in AZ. But that still isn't adding up to the deal you got.... Their site reads:

---------------------
The Cost Equation

Standard:
Total Price

System Size
AkWh/1.6/2 = watts
AkWh/1.6/2 x $5
Less Rebate -AkWh/1.6/2x$1.95
Less Federal Tax Credit -30%(Total Price-Rebate)
Less State Tax Credit -$1000

Results is the Net Cost

Sample:
Standard System - 6,250 watts
Total Price + $36,062
Less Utility Rebate - $12,188
Less Federal Tax Credit - $7,162
Less State Tax Credit - $1,000
Joe's Net Cost = $15,712

---------------------

But plugging in your system size of 9000 kwh comes up with a net cost of $20,215. Something isn't adding up, but maybe you are not on this same program this sample was based on.

In CA with SCE we get a $1.10 per watt credit from the utilities, and it's AC watts, not DC.

-OCJeff

[66tbird]

It's a Sunnyboy 5000 inverter (don't recall more detail on that , but do have a question) and I'm getting 36 Sunmodule Plus SW250 panels. Would of gone 48 but I was a few sq/ft shy. They do everything from permit apps and fees to all maintenance. I basically just promise not to change anything and be prompt in reporting an issue, keep them relatively clean and keep an internet connection. The dollar buy thing I'm sure I could challenge 20 years from now if a dollar had any value They haven't done the engineering yet for the mounting system or the inverter placement.

My question about the inverter related to that model and my output. They don't seem to match, but its a question for another sub-forum.

And yes, I cashed in 7, 1 oz gold eagles I bought in 99 and gave PPS a check in full and kept the rest for what ever, the next four months power bill I guess. I live in the desert and 125F+ in not uncommon with a typical day at 115F in the summer

[OCJeff]

[Edit: As noted above]
There must be some crazy incentives in AZ. That system is 50% lrager than mine, and at a lower cost! Can you give some details of your system (if you have them)? Types of panels/inverters/etc... ?

$1 buy out is common practices on computer/hardware leases, but I've never seen anything other FMV on Solar leases where they do allow a buy out.

-OCJeff

[maestroX2]

You got a 9 kW system for 10,000$ total cost? No monthly payments or anything?

If so Arizona must have a real sweetheart deal going!

It is indeed ! However, $1 buy out ? Explain more. That's interesting clause in the contract.

[russ]

I just did a purchase lease also, but in AZ, It is for a 9KW system for $10k. Bumper to bumper for 20 years, inverter for 10 years and all with a $1 buy out. Nothing odd in the contracts I found, really straight forward commonsense stuff. Perfect power Solar is the outfit.

You got a 9 kW system for 10,000$ total cost? No monthly payments or anything?

If so Arizona must have a real sweetheart deal going!

[66tbird]

I just did a purchase lease also, but in AZ, It is for a 9KW system for $10k. Bumper to bumper for 20 years, inverter for 10 years and all with a $1 buy out. Nothing odd in the contracts I found, really straight forward commonsense stuff. Perfect power Solar is the outfit.

[maestroX2]

Sorry, I must have miscommunicated the 5%. With a prepaid lease there is no loan (if you have money in the bank). So the 5% is applied to the difference between purchase price and prepaid lease over the term of the lease. I was estimated 5% for a CD or Bonds or something.



That aspect of a micro-inverter solution does sound very beneficial, but can you replace the micro-inverters separately from the panels, or does the whole thing need to be replaced? How does the cost of a micro-inverter system compare to that of SMA or Fronius? Wouldn't they all have just about the same lifetime (all of the separate micro-inverters)?

-OCJeff

hard to find 5% CD right now. But again, why pay the system for 20 years when you know the system will perform for more than that ? It degrades the performance but the system still works. It's the same analysis I use with leased cars. Sure, it's very attractive to lease brand new car for every 3 years but I normally use the car for at least 5 years. Right now, I just buy certified pre-owned or after-lease cars.

You can simply change micro-inverters or panels. My system cost about 2k+ more than traditional central inverters. However, it's really hard to compare since my mind is set with system I want and I ask all installers to give quote based on my desired system. I did the research and I think micro inverters system is the future. I want black n black panels ( aesthetic reason, if I want to look for 20+ years, it better looks good and not eye-sore ) and enphase m215.

IMHO, here is the list of advantage on micro-inverters system:-
1) 25 years warranty instead of 10 on central inverter. We know that central inverter will need to be replace between 10-15 years.
2) lifetime monitoring
3) you only have to replace either panel or inverter. You can easily know which one is bad by system monitoring.
4) panel output/performance is independent than the rest of panels. You'll get maximum production on each panel.
5) less likely your inverter got stolen since it's your roof instead side of your house. Central inverter creates humming sound too !.
6) should be easier to install but I hire someone so no big deal. But in case I have to replace it, I might be able to do it.

Cons
1) expensive but in the long run, you'll still save since you need to replace that traditional central inverter.
2) new technology & basically new company. They are very strong company though.
3) if you need to replace inverter, you have to climb your roof.

Many installers claim we don't need micro-inverters since we don't have shading issue but I can see a lot of pros other than shading issue
There are many thread about micro-inverters vs central inverter.

If you have to get loan to install your solar, I'd recommend to do lease. To have Solar in your home is better than paying utility company. You will still save $$$.

[maestroX2]

Not to worry - All the tax payers in the US are helping pay for the leased system. The leasing company can take advantage of the incentives/subsidies/tax credits that an individual can plus they can depreciate the system over time and I don't know what else.

taxpayers pay for system purchase as well. So I might as well take that $$$ too since I have been paying for it. that 9k tax break will help me on next year tax return.

[OCJeff]

interesting analysis... but if you have money in the bank, you don't have to swallow that 5% loan interest.

Sorry, I must have miscommunicated the 5%. With a prepaid lease there is no loan (if you have money in the bank). So the 5% is applied to the difference between purchase price and prepaid lease over the term of the lease. I was estimated 5% for a CD or Bonds or something.

Your lease will be done in 20 years and you can either splurge another money to continue leasing or buy the system from them (don't know how much they'll charge). If you buy system with Enphase m215, you have warranty till 25 years. So you have both panel and inverters warrantied for 25 years. Well, normally your system will work more than warranty period so I'd assume the system will still produce at least 30-40 years but probably degrade the performance. With modular system, you can simply replace certain bad panels or inverters.

That aspect of a micro-inverter solution does sound very beneficial, but can you replace the micro-inverters separately from the panels, or does the whole thing need to be replaced? How does the cost of a micro-inverter system compare to that of SMA or Fronius? Wouldn't they all have just about the same lifetime (all of the separate micro-inverters)?

-OCJeff

[maestroX2]

I also wanted to genuinely get some additional feedback on this purchase versus lease. I'm hoping not to start a lease bashing discussion, but here are my thoughts.

I know there will always be debate between purchase and own, versus a lease (especially now with so many leasing options), but taken into account just the financial savings of leasing (prepaid) versus buying I don't see how you can loose (unless there is significant value to the SREC that has yet to be known).

Initial savings (my system) = $5000 ~ Year 0 (prepaid lease is generally lower cost than purchase, by about 25%)
Inverter Replacement Savings (my system) = $5K-7K ~ Year 15 or so (may be cheaper as technology improves)

You would then have $5K + 20 Years interest (maybe 5% return so this would yield about $10K conservatively) plus the $5K-7K you save at year 15 (or so) which would yield another $6.25K-8.75K again assuming 5% return. So then you have about $17K savings in your pocket to replace the outdated technology with something new and current (which in 20 years who knows that that would be).

All of this savings comes from leasing and not buying up front. So granted you don't own it, but I do see some significant upside with the lease as well. If one purchases then yes they own it, but they need to come up with the lump some cash to replace the system when the time comes. With a lease you already have the money to buy/lease a new system when the time comes.

Just my .02c

-OCJeff

interesting analysis... but if you have money in the bank, you don't have to swallow that 5% loan interest. Your initial saving 25% saving is very generous. Have you compared with various contracts ? The companies that offer prepaid lease normally have the highest quote with outdated technology. Smaller companies normally offer to install for less cost. They'd try so hard to sell outdated technology cause it's cheaper for them since they buy in bulks. Solarcity won't give me a quote on micro-inverters system.

Your lease will be done in 20 years and you can either splurge another money to continue leasing or buy the system from them (don't know how much they'll charge). If you buy system with Enphase m215, you have warranty till 25 years. So you have both panel and inverters warrantied for 25 years. Well, normally your system will work more than warranty period so I'd assume the system will still produce at least 30-40 years but probably degrade the performance. With modular system, you can simply replace certain bad panels or inverters.