SolarCity 20-year lease too good to be true?

[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

[rbtrrer]

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

I'm staying tuned on this one

you guys ROCK

[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

[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]

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

Russ

[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

[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]

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

[Naptown]

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.

The FIT is that for all electricity generated or for only excess generated this point makes a huge difference. Generally here SRECs which are similar are for all power generated and essentially you are selling to the grid all of the electric generated and buying back most of not all. If you have a lock and get credit for all of it this may make for a different decision.

[Mike90250]

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.

Then forget it. If a lease, there may be problems selling the house. Then transfering the billing/payment to/from the utility.

If you were staying, I'd say BUY, but for 6 years, I don't know if it's worth it. Can you put a ground mount in the yard, and take it with you ?

[Naptown]

If you follow the apraisers guidlines for every dollar saved on utilities this equates to a gain in equity of between 15 and 20 dollars. This is based on the principal and interest over 30 years at 6%. The lower number is probably more accurate. Even if it only adds a marginal value to the property it will sell much faster particularly as energy costs rise. And this is not like a swimming pool people place value on energy efficiency and reduced utilities costs.

[funkytipu]

Hi Russ, Rich and Mike,

Thanks for responding. Mainly after going through the whole forum and then talking with PGE and Solar City Salesperson, I have now a very good understanding of how things work.

Now I just have to decide if I want to go with Lease or Purchase. With FIT, purchase is definitely looking good if I can cover the $17000 upfront for the system. The system would hopefully pay for itself within 4-5 years with 46.8cents/kWh that PGE will pay and the tax credits. PGE will actually pay me upto the amount of power I use with this Pilot which I did not realize till last night.

Mike,

I like the idea to see if they would be willing to put it on the ground but I doubt if it will get the best sunlight.

Also I found out from PGE, that any power that I do not use, goes into an energy bank that I can tap into during winter months like Net Metering.

I asked the Salesperson why they suddenly added the $1966 to the lease when initially they said it was $0 out of pocket and he explained that Oregon dropped the rates in Pilot which increased the cost for me at the last moment which is true. In october when they ran this Pilot, the FIT was around 59.8 cents/kWh.

So need to take some time and make a decision

[funkytipu]

If you follow the apraisers guidlines for every dollar saved on utilities this equates to a gain in equity of between 15 and 20 dollars. This is based on the principal and interest over 30 years at 6%. The lower number is probably more accurate. Even if it only adds a marginal value to the property it will sell much faster particularly as energy costs rise. And this is not like a swimming pool people place value on energy efficiency and reduced utilities costs.

Hey Rich, Are you talking about if I went with Purchase or Solar Lease option? or in either case?
thx
FT

[Naptown]

Hey Rich, Are you talking about if I went with Purchase or Solar Lease option? or in either case?
thx
FT

That would apply to a purchase mostly. A lease at 5 years out would be a considerable less value as there are still payments due on it and the potential problems of transferring the lease. Generally we find at least in Md that systems are paid off in 5 years with SRECS still to be collected and the savings are all yours with no lease costs.

[Benben]

Solar Lease

I would love to see a copy of any leases anyone has available. Please send it to bentley@theleveredge.com.