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  • #16
    Originally posted by russ View Post
    Their bluff? Bull Ian, you are dreaming.
    You don't think I'm prepared to have them removed by the lessor at lease end? I absolutely am.

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    • #17
      Thanks Ian. I can see the argument for both the sides, just trying to guage how much attention I should pay to the lease expiration FMV in the lease vs buy argument.

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      • #18
        Originally posted by russ View Post
        Their bluff? Bull Ian, you are dreaming.
        We have seen reports of Lessor companies who try to get the present value, installed, to the user rather than the present value free standing including cost of removal and roof repair.
        That will certainly be their first offer, and if that is not taken they may or may not come down to a rational FMV offer.

        Everything is negotiable to some extent.

        An interesting tax matter that I had not thought of till now is what happens when they sell the system to the home owner at more than legitimate FMV?
        SunnyBoy 3000 US, 18 BP Solar 175B panels.

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        • #19
          I think a 20 year old solar panel will have about the same value as a 20 year old TV. If not less. The TV will at least be retro in twenty years.

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          • #20
            I my opinion the panels will be worth zero. Odds re the owner will have to pay to dispose of them. Except for hobbyists, I don't think anyone would reinstall them.

            I would guess that the leasing company will be long gone before the 20 years are up, they will aggregate the leases and sell that at a discount to another investor. Good luck finding someone to answer the phone who has a clue.

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            • #21
              Originally posted by mukg View Post
              Hello,

              I am currently trying to solicit solar bids. What is the expected FMV of a solar system percentage wise at the end of a lease (say 20 years)?

              I have talked to a couple of Sunrun representatives, and both suggested that FMV would be zero, and that it is not worth the company's time to uninstall the system at the end of 20 years, as long as you resist the up-sell pressure. In contrast, SunPower does not even offer an option to purchase (either renew lease or return system).

              Can anyone who have leased a system provide their options for elase expiration (especially for Sunrun)?
              the panels will have no market value at twenty years. Sunrun and other companies wont be able to do anything with them been 20 yrs old. i work for vivint solar, we have a purchase option. many companies that do a PPA (power purchase agreement) usually allow a purchase at the end of the agreement. Sunrun dealers do a PPA. you should be able to purchase it. there sales reps get more commission if you sign a lease. DONT DO A LEASE its the worst option for solar.

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              • #22
                My leasing company that we install for says they are not allowed to say upfront that they will give you the system at the end of 20 years. Tax reasons or something. They do say they will remove the system at no cost to the homeowner if they so desire (at that time). The implication is they will gladly give it to you at that time instead. It is questionable whether the equipment is worth removing and reinstalling somewhere else, but for sure it is worth quite a lot to keep it and continue to reduce your power bill. Solar PV panels have already proven themselves to last long term. Maybe after 50 years, they've lost enough output to think about replacing them. Gonna have to replace the inverter at some time of course, but the power the system makes after 20 years is pretty much all gravy. True, you could be way better off purchasing the system yourself (7 year payback is typical around here), but for many - leasing is the only way they can go solar and is better than just paying the power company forever.
                BSEE, R11, NABCEP, Chevy BoltEV, >3000kW installed

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                • #23
                  I am in the SAME exact situation. I am trying to decide between prepaying a 20 year lease or buying a the system outright. I've decided that I don't know and NO ONE knows what will happen at the end of the lease. Worst case scenario, they come and take the system. Best case scenario, it still works and you get it for free. The upside to leasing is everything is covered for 20 years and you don't have to fork out the +30% and wait for tax credit time. The downside is of course, the unknown at the end of the lease.

                  Upside to buying with cash is you own. Downside is the warrant isn't as good.

                  I've been talking to Solar City and Sun Run. They both push the lease. I finally asked what the advantage to them is for a lease. Apparently they have tax advantages for owning the equipment and being able to use them as a tax tool to write off the equipment as it depreciates yearly. This makes sense and it is something a homeowner can't do.

                  I am torn between the two. If I had to gamble, I would gamble that in 20 years no company will pay for the labor to remove my system. Plus, if they damage anything taking it down (like my roof) I will likely be suing.

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                  • #24
                    Originally posted by solarbogle View Post
                    I am in the SAME exact situation. I am trying to decide between prepaying a 20 year lease or buying a the system outright. I've decided that I don't know and NO ONE knows what will happen at the end of the lease. Worst case scenario, they come and take the system. Best case scenario, it still works and you get it for free. The upside to leasing is everything is covered for 20 years and you don't have to fork out the +30% and wait for tax credit time. The downside is of course, the unknown at the end of the lease.

                    Upside to buying with cash is you own. Downside is the warrant isn't as good.

                    I've been talking to Solar City and Sun Run. They both push the lease. I finally asked what the advantage to them is for a lease. Apparently they have tax advantages for owning the equipment and being able to use them as a tax tool to write off the equipment as it depreciates yearly. This makes sense and it is something a homeowner can't do.

                    I am torn between the two. If I had to gamble, I would gamble that in 20 years no company will pay for the labor to remove my system. Plus, if they damage anything taking it down (like my roof) I will likely be suing.
                    Lots of folks see other advantages and drawbacks to leases you have not mentioned or perhaps considered. Seems at times we've done our best to rip one another new ones around here over the subject.

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                    • #25
                      Based on the fact that solar panels originally installed 40 years ago in California are still producing electricity, I would say that even with a 25% degradation in performance, and a 200% increase in the cost of electricity, the economic value of these solar panels will be substantial.

                      Monopolies have pricing power that far exceeds inflation, and no incentive to reduce costs.

                      When the leasing company has the option to re-lease a system generating substantial revenue for ZERO cost to them, do you think they're going to just give them to you for free???

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                      • #26
                        Originally posted by Qubera View Post
                        Based on the fact that solar panels originally installed 40 years ago in California are still producing electricity, I would say that even with a 25% degradation in performance, and a 200% increase in the cost of electricity, the economic value of these solar panels will be substantial.

                        Monopolies have pricing power that far exceeds inflation, and no incentive to reduce costs.

                        When the leasing company has the option to re-lease a system generating substantial revenue for ZERO cost to them, do you think they're going to just give them to you for free???
                        Maybe not, but there are a lot of things that influence the perception of what a thing is worth at any time.

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                        • #27
                          Leasing companies don't want old solar systems. They make their money on securitizing the sale of your system financed for the 20 years required by the regulators. After 20 years, you have the option to require them to pay an installer to remove the system off your house if you don't want it anymore - they would rather just give it to you.
                          BSEE, R11, NABCEP, Chevy BoltEV, >3000kW installed

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                          • #28
                            Originally posted by solarix View Post
                            Leasing companies don't want old solar systems. They make their money on securitizing the sale of your system financed for the 20 years required by the regulators. After 20 years, you have the option to require them to pay an installer to remove the system off your house if you don't want it anymore - they would rather just give it to you.
                            Perhaps a few more of the things that influence the perception of a thing's worth ?

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                            • #29
                              Originally posted by Qubera View Post
                              When the leasing company has the option to re-lease a system generating substantial revenue for ZERO cost to them, do you think they're going to just give them to you for free???
                              It's only at zero cost to the leasing company if they can convince a gullible homeowner to extend the lease and continue paying each month. More power to them if they can do that. A savvy homeowner would just call their bluff and demand the system's removal. At that point they'll just abandon it because removal will cost them money. That's why the lease will frequently have wording making it clear that although you can demand they remove the system at no cost, they don't have to do so if instead they simply transfer full ownership to the homeowner. I haven't heard one person in the know who believes for a minute that the leasing company has any interest in removing 20 year old panels and reselling or re-leasing them.

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                              • #30
                                Originally posted by Ian S View Post
                                It's only at zero cost to the leasing company if they can convince a gullible homeowner to extend the lease and continue paying each month. More power to them if they can do that. A savvy homeowner would just call their bluff and demand the system's removal. At that point they'll just abandon it because removal will cost them money. That's why the lease will frequently have wording making it clear that although you can demand they remove the system at no cost, they don't have to do so if instead they simply transfer full ownership to the homeowner. I haven't heard one person in the know who believes for a minute that the leasing company has any interest in removing 20 year old panels and reselling or re-leasing them.
                                If I ran the company holding the lease, and the situation was to be as you describe (which FWIW, seems at least plausible to me anyway), I'd call the homeowner and, depending on the situation, if it was in my co.'s interests, try to attempt to negotiate with the customer.

                                Again, depending on the situation, maybe not much to lose by takin' a shot at negotiating a few more bucks out of it.

                                Just more opinion/ranting here, but since it's already a lease, the ethical mandates about sticking to the truth in negotiations were probably scrapped long ago.

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