sunpower and new construction

[dethman]

hi, solar newbie here. i am about to purchase a new construction home, and included is a basic 1.5kW solar system for free. I am considering upgrading to the 5kW. I live in southern california.

I am trying to assess whether the costs are appropriate and what the builder telling me is legit. for a 5kW Sun Power 20 panel system, they charge $12,585. They state that I will get a 30% federal tax credit on a RETAIL price of the system, up to $8666 (assuming retail is 29K i guess).

This would make the net cost $3919 for a 5kW system. The home will be finished Feb 2017.

It seems like a really cheap solar system that I would own after buying the home. Questions are, is Sunpower a good brand, is that rebate legitimate, and will i expect to get that cash back on my federal taxes in 2017. Also, would a 5kW system be adequate to cover my home's energy costs?

any help you experts could all provide would be appreciated. thanks!

[ButchDeal]

hi, solar newbie here. i am about to purchase a new construction home, and included is a basic 1.5kW solar system for free. I am considering upgrading to the 5kW. I live in southern california.

I am trying to assess whether the costs are appropriate and what the builder telling me is legit. for a 5kW Sun Power 20 panel system, they charge $12,585. They state that I will get a 30% federal tax credit on a RETAIL price of the system, up to $8666 (assuming retail is 29K i guess).

This would make the net cost $3919 for a 5kW system. The home will be finished Feb 2017.

It seems like a really cheap solar system that I would own after buying the home. Questions are, is Sunpower a good brand, is that rebate legitimate, and will i expect to get that cash back on my federal taxes in 2017. Also, would a 5kW system be adequate to cover my home's energy costs?

any help you experts could all provide would be appreciated. thanks!

well you don't get the federal tax credit based on a retail price, you get it based on what you actually paid for it.

[dethman]

they state they will give you a statement regarding what the builder paid for the system and the rebate will be based on that. there is a whole handout they have based on calculations for each solar system they provide and it is listed in the solar disclosures included with the home.

not sure whether it is legit/correct or not but that is what is reported by my builder. i never really trust salespeople though which is why i'm asking here.

[ButchDeal]

the IRS will not be coming after the builder or the people who wrote the handout. You should read up on how the ITC works and talk to your tax advisor. What they are claiming is not accurate.

As for the size of the system, it is unlikely to offset your full usage though you don't say what the usage is or the arrangement of the modules (to predict the production).

[dethman]

20160901_083832.jpg
here is the flyer.

[solarix]

If this builder is taking that kind of liberty in explaining the solar tax credit, just imagine what they are doing on the rest of the job.....
Now, if they are including the solar system in the mortgage and you are just making payments, then they can play the "retail price" game like the leasing companies do where they mark up the price of the solar system to unbelievable heights to max out the tax credits, then give you an equally unbelievable good interest rate to get the payments very low... All very shady.

[J.P.M.]

Before you do anything, stop. Then read "Solar Power Your Home for Dummies".

Then, reread what Butch wrote. Someone is dancing with your leg on the system eligible tax credit.

Sunpower is decent enough stuff and usually more expensive than that, but no more fit for purpose than other quality equipment. FWIW, after watching a lot of new home construction and the quality I've seen, I'd get my own solar even if it cost a few extra $$ up front, and then only after a year of usage history for a better sizing estimate.

$12.6K for 3.5 more kW ( = $3.60/Watt) may not be a bad price, particularly if it actually is Sunpower equipment, but something seems fishy.

I'd suggest Caveat Emptor, some education and more deliberation.

[Ian S]

Clearly some of the cost is buried in the cost of the home. It's an interesting wrinkle as you can't buy the home without solar. Certainly the pricing looks a lot lower than it would be if you were adding a system to an existing home but you're paying a big chunk of the solar cost in the home itself. It might actually work legally.

[dethman]

Thanks for input, thats why i dont trust nor believe everything salesmen have to say. Even assuming you can only claim 12k paid for the system for the 30 percent rebate, it seems like a decent price for a 5kw system?

Problem regarding the rebate, is that the 1.5kw is included, so the 12k is additional, and the total cost of the system is unknown.

I'm not sure i could add solar later like someone else mentioned, if i already had an existing system which would come with the home.

[dethman]

well you don't get the federal tax credit based on a retail price, you get it based on what you actually paid for it.

so after reading the ITC website and their handout, all I can tell is that you get a 30% of the 'basis that is invested in eligible property.'

i'm not an accountant by any means but it seems to me if the builder gives you a solar valuation for the purchased home as they claim they would it seems like it could be used as a legitimate valuation for the credit since you did pay for the base solar system which was built in even if you did not upgrade.

i will consult my accountant.


otherwise, no one has bought a new home with solar before?

[ButchDeal]

so after reading the ITC website and their handout, all I can tell is that you get a 30% of the 'basis that is invested in eligible property.'

i'm not an accountant by any means but it seems to me if the builder gives you a solar valuation for the purchased home as they claim they would it seems like it could be used as a legitimate valuation for the credit since you did pay for the base solar system which was built in even if you did not upgrade.

The problem is that they are saying it is based on $29k for a 5kw system (to come up with $8,666 incentive). That is way above the market at $5.80/w, especially when they are clearly pricing $3.60/W for the increased size ( a much more reasonable price).
SolarCity and other leasing companies already got in a lot of trouble for doing just this kind of pricing mix. They were claiming that had they sold the equipment they would have sold it way above market to claim a higher incentive.

Federal incentive specifically has to come AFTER any upfront incentives or sales as well, and be based on costs.

[dethman]

I see so that would be an unreasonable price to pay. I honestly have little knowledge of how much solar costs.

Has anyone else recently installed a sunpower 5kw system? What would i expect to pay for that on an existing home? Perhaps that would be a more legitimate valuation.

[dethman]

And regardless of whether the rebate is 8k vs 4k, would the upgrade be a reasonable investment over the base solar? I think that is actually the worthier question as 4k is not a big deal in the long run.

[ButchDeal]

yes. I would get the larger one but I would be interested to see the azimuth and I assume there are few trees for shadows.

[Ian S]

Thanks for input, thats why i dont trust nor believe everything salesmen have to say. Even assuming you can only claim 12k paid for the system for the 30 percent rebate, it seems like a decent price for a 5kw system?

If it's a properly installed SunPower system, then the pricing is great even if you only use the lower system cost for tax credit purposes. I find it interesting that the panels appear to be of the 250 W variety. Are they old stock because Sunpower panels advertised today are all over 300 watts/panel?

[J.P.M.]

To cut to the chase and maybe through some obvious B. S.: This looks like a sales tool and a bit of a con. Read the book, talk to an accountant who knows about solar tax credits (it seems not all do) and see that it's a con, and educate yourself. You may agree with my opinion or not. Then make a decision.

[Ian S]

Some things to ask in writing perhaps: what is the exact equipment used including panels and inverter(s)? What is the warranty? I'd assume it's the full Sunpower warranty but who knows for sure?