New 15 Year Lease on 5.98 kWh system with SolarCity in Oregon

[Dowzer]

I'm new to this forum; new to solar for that matter. In January I saw an article in the local paper about no-down solar leases coming to Oregon.

I went to SolarCity's website, plugged my info in and someone called back the same day. They sent a preliminary design and 4 different quotes. Overall, it sounded like a great deal so we signed up. The system was installed last week. Now I am eagerly waiting for the city inspection and utility inspection before we can turn it on.

Here's what we got:

* 26 230W Yingli modules
* 2 Fronius IG Plus inverters
* SolarGuard monitoring
* Equipment warranty for life of lease (including expectation of replacing inverters after 10 years)
* Damage and theft insurance for life of lease
* Reinforced roof from within attic
* Performance guarantee. 5,408 KWH guaranteed first year. 4,698 KHW guaranteed 15th year. Guaranteed energy price per kWh is $0.090.
* Output warranty. The output during the 1st 10 years will not decrease by more than 15%
* Option to renew lease for up to 10 years in two 5 year renewal periods.

Here's what we paid:

* Initial payment is $2,370
* Monthly payment of $19.22. It is fixed and does not increase over time.
* Oregon has a $6,000 tax credit that is applied over 4 years ($1,500 each year). SolarCity can't receive this directly from the state so we agreed to send them $1,000 of it each year. So of the $6,000 SolarCity will get $4,000 and we will get $2,000.

We did not get an option to purchase the system prior to the lease term.

We currently pay $0.06778 for the first 1,000 kWh, $0.075 after that, plus $0.00235 transmission charge, and also a $0.3116 distribution charge. There's also a bunch of adjustments after that to convolute things and make you not know exactly what you are paying. Our electric bill for last month was $150.

The system looks very impressive. 13 modules face south, 13 face west. Each string is connected to a separate inverter. SolarCity monitors each inverter separately. I am eager to see how the output for the southern facing modules compares to the western facing modules.

I can't help but think this is an outstanding deal and have no problems in recommending a lease (such as ours) to others. If someone disagrees, please enlighten me. I'd like to know what we've gotten ourselves into and don't want to refer others to SolarCity if this really isn't an outstanding deal.

Thanks.

-Chris

[russ]

A couple of questions first please -

1) What is your average monthly bill over the past year?

2) Approximately where are you located? Portland, Eugene, Bend, Medford - makes a difference in the insolation.

Russ

[russ]

1) They are guaranteeing you 5408 kWh/year or or 421 kWh/month average - more or less like Portland can expect.

2) For your 150$ per month bill (if that is average?) you must be consuming in excess of 1500 kWh/month - meaning you still have to purchase 1080 kWh/month (average) from the utility

3) Your bill won't go down proportionately but say you end up still paying the utility 100$ per month

4) Initial payment of 2,370$ less the 2,000 kickback (forget interest) and divide that by 15 years = 2.10$ per month

5) You pay Solar Authority 19,22$ per month

6) 150$ currently paid - 19.22$ (Solar Authority) - 100$ (Utility) - 2.10$ (down payment) = You seem to be saving about 29$ per month

For signing a 20 year lease you seem save 28$ per month.

With the constant changes and improvements who knows what the future holds as far as cost or output in 2 years or 10 years.

OK but no big deal - if you owned the system it would be more attractive.

If Rich chimes in we will see what he has to say - he sells these things and knows the details well.

Russ

[Dowzer]

Hi Russ,

In answer to your questions, we are in Portland and our average monthly electric bill is about $125. We expect this to go up because we also replaced our furnace this year with a furnace/heatpump system. My understanding is that with the heatpump we will use less natural gas and more electricity.

Our last bill was $150 and we consumed 1379 kWh.

I agree with your numbers; we expect to save about $28 per month initially. I also think energy prices will continue to go up. Japan's nuclear crisis doesn't help energy prices, and the whole cap-in-trade politics will likely result in higher prices. My February electric bill also said there was an average 6% price increase. I haven't paid attention to past increases but I wouldn't be surprised if the trend is a minimum 6% increase per year.

Thanks for your feedback. I am still curious to hear what other people think.

-Chris

[Mike90250]

I dislike leases, you are sending someone else's ( salesman, front office staff, front office rental) kids to college with that $$.

[Dowzer]

For the $370 and $19.22 a month it will cost us, that's not enough to be sending anyone's kid to college.

I think the only way SolarCity is making money on this is through the government/utility incentives. So it is really the taxpayers money that is sending kids to college. I understand how that could be controversial. Also, these incentives seem to favor those people who are better off. A single mom renting an apartment won't be able to take advantage of a solar incentive. Anyhow, all levels of government are broke and so I don't expect the incentives to last much longer.

-Chris

[Naptown]

Such a deal
As I read this you paid them a down payment and giving them another 4000 over the next 4 years
So this will produce about 421 KWH a month and if I read this correctly you will be paying them $0.09 a KWH for the energy produced
You are currently paying about 8 cents a kilowatt hour on the top tier as you stated.
Congratulations you are now paying 13 cents a kilowatt hour for what ever this produces.

[mangoman]

20 year Solar City Lease
$7,180 Down
$40 X 239 Months = 9560
-$500 rebate for more than 50 homes in my community signing up

Total paid to Solar City over 20 years = $16,240 for my 5.04kWh system

Now I have only had it running for 1 month but my first electric bill since turning it on was $110 less than the same time period last year. Plus I have 140kWh credit right now.

But just for fun let's say utility prices don't increase for the next 20 years (hahahaha) and my bill is $110 less every month for the next 20 years.

$110 X 240 months = $26,400 in savings on my bill - $16,240 for the cost of the system = $10,160 in savings over 20 years.

And $16,240 / $110 = 12.3 year ROI.

Also consider all maintenance, replacements, insurance etc is covered for the 20 years...

What am I missing? How is this not a good deal?

[russ]

I don't know but - the other poster, Dowzer, on this thread certainly paid less than you did - for a 6 kW system it would seem. Also from Solar City!

By convincing people to keep their contracts secret they manage to screw many people I expect. Not a business model that I can appreciate.

No one posts the contracts so we have no way to know what the facts really are. I have seen only one. Everyone cherry picks what supports their decision to present and ignores the balance.

Russ

[mangoman]

He also went with a 15 ye lease vs my 20 which makes up for much of the difference I am sure. Perhaps he is a better negotiator than me also.

I don't get all bent out of shape when my local car dealership sells me a car for 20000 and then the next day sells the higher end car to the next Guy for 19000. In the end I got the deal I bargained for. My hat's off to the original poster for getting a better deal, if that's the case.

Kudos

[Naptown]

Much of the Solar city disparities in pricing are due to differences in the srec market, local state and utility incentives. I would Imagine this has more to do with the variances in lease costs than anything. I know that one of the systems was in Oregon and where is Mangoman's ?

[mangoman]

I am in Southern California (Serviced by So Cal Edison)

[Naptown]

My suggestion to both of you is to go to dsireusa.org and look up the incentives for your area one may have better incentives or srec markets than the other. ( you will also see what you missed out on that Solar City will keep

Am I to understand that the electricity these systems generate is yours for free or do you pay for it to Solar city?

[mangoman]

Part of the reason I went with Solar City is so that I would not have to read all that crap and try to figure it all out and fill out all the paperwork and jump through all the hoops and go through all that pain in the ass stuff.

I know Solar City is making money on the deal. That is what capitalism is all about. As an investor in stocks etc, I expect companies to make profits.

In exchange for not having to deal with all the BS, I got a turnkey solar system, installed, insured, maintained, repaired and removed in 20 years if I want and all that for just over 16K.

The least expensive purchase option I see online for the exact setup I got is 19-20K and I am not sure what that includes as far as installation, warranty, insurance etc. But let's say I purchased that and it came with all that stuff and I got a $5000 rebate to bring my cost down to 15K. Well that's 1K that that I would have gotten but instead Solar City gets.

Good for them. American capitalism at it's finest and all I needed to do was sign the lease instead of trying to figure out what rebates and incentives I qualified for and jumping through all the hoops to get those.

[Naptown]

Actually a good and competent installer will generally handle all of that for you. It's considered part of the deal at least around here.