SolarCity 20-year lease too good to be true?

[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

[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]

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

[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

[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.

[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

[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 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]

[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

Its illegal, the IRS hasn't been taking notes, when they do, all these people who think they're getting a $1 buyout are actually
going to have to pay FMV for those systems. There's a few outfits in Arizona and New Mexico who are pulling this nonsense.

[OCJeff]

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.

In one regard, I would not worry. If the company has been around for a while they probably aren't going to start scamming people and try to rob them blind. I do agree about the money upfront portion however, with SolarCity you don't pay anything until the entire system is installed (so they have put up all of the initial capital), but pending inspections.

At the same time, cover your bases. I'm assuming you checked the BBB rating, and also searched for any complaints on review sites. Until they really give you a reason to be concerned I would just ride it out (at this point, I'm not sure you have any other options).

What I did read on their site was that they accept the rebates and incentives as a portion of your payment. So it could quite possibly be that he maintains the rights to non-power benefits. Without seeing the contract its hard to say.

-OCJeff

[KRenn]

In one regard, I would not worry. If the company has been around for a while they probably aren't going to start scamming people and try to rob them blind. I do agree about the money upfront portion however, with SolarCity you don't pay anything until the entire system is installed (so they have put up all of the initial capital), but pending inspections.

At the same time, cover your bases. I'm assuming you checked the BBB rating, and also searched for any complaints on review sites. Until they really give you a reason to be concerned I would just ride it out (at this point, I'm not sure you have any other options).

What I did read on their site was that they accept the rebates and incentives as a portion of your payment. So it could quite possibly be that he maintains the rights to non-power benefits. Without seeing the contract its hard to say.

-OCJeff

The issue is this, by the virtue of offering a $1 dollar buyout on an operational lease, they're already scamming the customer.


SolarCity won't offer a buyout, neither will Sungevity, SunCap, BrightGrid or any of the others and these are all big money
players, if they could do it, they would but they have those pesky laws and rules to abide by.


Also keep in mind that the post I was responding to wasn't referring to SolarCity.

[66tbird]

I will ask about that info. We did sign off all rights to incentives. Not a big deal for me because of my tax situation. 20 years is a ways away and it states clearly the three options at that time. I pay, or I don't, or that take it if I don't and if they what it back. That's a long ways away. if I have to pay FMV I'll make sure its not much.

What's the $1000 for monitoring? You mean an internet connection? I couldn't live without it so it's not an issue.
10,000 over 20 years? In my case it was all profit to start with. Even if this system only cuts my $3k/yr power bill in half its doing more than most low risk investments. Our utility has been approved to hike rates 7%/yr for the next 7 yrs. They've never passed that up in the 50 yrs I've been here.

I think the company could be around a while. Their projects are on and have been on most major public type places around here since the late 70's.


But I am worried about the inverter issue. That was the only question he dodged nicely. (Roughly what size should I have?) I'll email him and get a technical answer that fits or I'll back out. In my hobby world I'd never put a speed controller rated at 100A in with a motor, battery combo that can do 150A.

[KRenn]

[QUOTE=66tbird;28935]I will ask about that info. We did sign off all rights to incentives. Not a big deal for me because of my tax situation. 20 years is a ways away and it states clearly the three options at that time. I pay, or I don't, or that take it if I don't and if they what it back. That's a long ways away. if I have to pay FMV I'll make sure its not much.

What's the $1000 for monitoring? You mean an internet connection? I couldn't live without it so it's not an issue.

You're not receiving monitoring for 20 years are you? If so, then you have to pay for the monitoring service out of your own pocket if they only offer it for 5-10 years like
most of these companies pushing this goofy in-house lease are. Limited monitoring and no insurance means you're going to pay more for less product.

I think the company could be around a while. Their projects are on and have been on most major public type places around here since the late 70's.

Their BBB file opened in 2001 and their ROC license was issued in 2010 with 1 open complaint against their record. According to the AZCC, their business was started in 2003.

When it comes to the solar industry, don't believe everything you hear, these companies claim everything under the sun, 20...30 year histories and most of it is imaginable. Most companies didn't have jack crap for business until 2009 and the tax credits got uncapped, then the business started rolling in.

Name/ Address/ Phone
PerfectPower Inc
20601 N 19th Ave Ste 150
Phoenix, AZ 85027-2662 Phone: (623) 581-1700
Status/ Action
CURRENT

Class | Type | Entity
K-11 | DUAL | CORPORATION
Recovery Fund Participant
Yes
Issued/Renewal
First Issued: 06/08/2010

http://starpas.azcc.gov/scripts/cgiip.exe/WService=wsbroker1/names-detail.p?name-id=10840482&type=CORPORATION

As an example, American Solar Electric claims to have been around since 2001 and they can legitimately prove it.

Status/ Action
CURRENT

Class | Type | Entity
K-11 | DUAL | CORPORATION
Recovery Fund Participant
Yes
Issued/Renewal
First Issued: 09/10/2001
Renewed Thru: 09/30/2011
License Class & Description K-11 ELECTRICAL

But I am worried about the inverter issue. That was the only question he dodged nicely. (Roughly what size should I have?) I'll email him and get a technical answer that fits or I'll back out. In my hobby world I'd never put a speed controller rated at 100A in with a motor, battery combo that can do 150A.

The biggest issue is that if they're giving you a 5000 watt inverter, you're going to lose an absurd amount of power. For a 9000 watt system, ideally you want a
9000 watt inverter, less than that and you're getting short-changed. Many companies will offer you a smaller inverter but a 1-1 ratio is ideal to truly maximize power harvest,
especially in the winter when temperatures drop-off.

[maestroX2]

I will ask about that info. We did sign off all rights to incentives. Not a big deal for me because of my tax situation. 20 years is a ways away and it states clearly the three options at that time. I pay, or I don't, or that take it if I don't and if they what it back. That's a long ways away. if I have to pay FMV I'll make sure its not much.

What's the $1000 for monitoring? You mean an internet connection? I couldn't live without it so it's not an issue.
10,000 over 20 years? In my case it was all profit to start with. Even if this system only cuts my $3k/yr power bill in half its doing more than most low risk investments. Our utility has been approved to hike rates 7%/yr for the next 7 yrs. They've never passed that up in the 50 yrs I've been here.

I think the company could be around a while. Their projects are on and have been on most major public type places around here since the late 70's.


But I am worried about the inverter issue. That was the only question he dodged nicely. (Roughly what size should I have?) I'll email him and get a technical answer that fits or I'll back out. In my hobby world I'd never put a speed controller rated at 100A in with a motor, battery combo that can do 150A.

Just be careful. A lot of people are trying to make easy money right now. If the deal is too good to be true, walk away.

[KRenn]

Just be careful. A lot of people are trying to make easy money right now. If the deal is too good to be true, walk away.

My biggest gripe is why would you get into an operational lease and then have to pay to insure equipment you're not
receiving tax credits on or getting to depreciate? And insurance is required with every leased system yet just about
every other company provides it in the package for the full 20 years, along with a full 20 year warranty and not just 10
years on the inverter. That's a joke, now after year 10, you'll have to pay to replace an inverter you don't own? Why
bother leasing at all then.