Inheriting a system

[yelloguy]

Hi,

I am buying a house that has a power purchase agreement with Sunrun for a solar panel setup on the roof. At the time I made the offer on the house, I was told that I would be required to take over the contract. Now that P&S is done, I am looking at doing the paper work for Sunrun and I am seriously bummed about the terms in the contract. They are basically setting up a mini power plant on my property and selling me the power generated for a measly 10% discount. And they are telling me a bunch of Do's and Don'ts in the contract.

The contract requires me to pay them $53 a month going up 1.5% every year for 20 years. The system will generate a minimum of 5300 kwh every year or else they would compensate me for the shortfall. Any surplus counts towards the shortfall for next years but is mine to keep. And at the end of 20 years, I would have the option to have everything removed or renegotiate the contract.

The cost to prepay is about 10k and the cost to buy them out is about 20k. The monthly payments come out to be about 15k. Prepaying and buying costs become the same at year 5 (about 7k) which means they write-off the equipment in 5 years. If I don't buy them out, maintenance is their responsibility.

I have been reading some posts in these forums for a while and have gathered some useful info already. For example, I now understand that the minimum guarantee is easily met. Which is good because it means that I might be able to live with only the power generated. I looked at my utility bills in my present house (for a guess-timate) and I am consuming about 450kw a month (give or take).

I don't know what panels are used (cheap chinese or sunpower) or what inverters are used (string or micro). I don't know how I can find out since I don't own the house yet.

As I said I am not too thrilled with the terms and I am wondering if they would renegotiate. Does anyone have any experience with this kind of stuff? The previous homeowner has had them for some 9 months and the power was activated only last month.

[russ]

Any negotiating has to be with the homeowner - they own the contract. You should try for a significant discount on the house price.

[rba13]

Looks like you are inheriting a contract.

What's the maintenance? Hosing the panels off once a year?

[Ian S]

This should all have been disclosed prior to any sales contract for the home. The seller's real estate agent should have provided you with the full PPA document in advance. This would probably be grounds for backing out of the purchase. Where are you located?

[rba13]

This should all have been disclosed prior to any sales contract for the home. The seller's real estate agent should have provided you with the full PPA document in advance. This would probably be grounds for backing out of the purchase. Where are you located?

Yup. These types of horror stories don't do the sellers who own their own systems any good, because buyers will think negatively on homes with solars thinking that there is some hidden details/fees.

[yelloguy]

The house is nice and the market was hot. They had multiple offers and we wanted our offer to be comparable. So we decided to overlook this part. I did get the document from the seller's agent and I read through it. I did not like it but there was nothing I could do except to look for a different house or make a good offer.

So, at this point, there is no negotiating with the seller. We are buying the house. Rather than paying the utility x dollars for my monthly usage, I would be paying Sunrun 0.9x (to start) in exchange for having all their equipment on my property. This would go up 1.5% which means if the utility costs don't go up, I would soon be paying MORE than x to Sunrun. It is not the end of the world but I wanted to know if others were in the same situation and if there was any recourse - other than praying for their bankruptcy.

I am in Northern MA.

[rba13]

The house is nice and the market was hot. They had multiple offers and we wanted our offer to be comparable. So we decided to overlook this part. I did get the document from the seller's agent and I read through it. I did not like it but there was nothing I could do except to look for a different house or make a good offer.

So, at this point, there is no negotiating with the seller. We are buying the house. Rather than paying the utility x dollars for my monthly usage, I would be paying Sunrun 0.9x (to start) in exchange for having all their equipment on my property. This would go up 1.5% which means if the utility costs don't go up, I would soon be paying MORE than x to Sunrun. It is not the end of the world but I wanted to know if others were in the same situation and if there was any recourse - other than praying for their bankruptcy.

I am in Northern MA.

In bankruptcy, what happens? Do you get first dibs on buying out your contract? Or is your contract sold to another solar lease outfit?

[Ian S]

In bankruptcy, what happens? Do you get first dibs on buying out your contract? Or is your contract sold to another solar lease outfit?

That PPA is a money producing asset even for a bankrupt firm. It would be sold off to someone else perhaps even the homeowner but it wouldn't be given away.

[russ]

That PPA is a money producing asset even for a bankrupt firm. It would be sold off to someone else perhaps even the homeowner but it wouldn't be given away.

It will most likely be sold at market value - not a fire sale

[russ]

I missed it earlier but dibs is not a legal ro commercial term - more like it appears in kids games.

[rba13]

I missed it earlier but dibs is not a legal ro commercial term - more like it appears in kids games.

Yeah, I was just being skeptical on how something that makes money (the contract) not be sold off to the highest bidder.

[Ian S]

Yeah, I was just being skeptical on how something that makes money (the contract) not be sold off to the highest bidder.

If the PPA agreement is anything like my Sunpower lease agreement, it gives the Lessor/PPA owner pretty much carte blanche to transfer ownership of the lease:

Lessor’s Right to Assign: Lessor may assign, sell or transfer the System and /or this Lease without your consent. In other words, we may, without your consent, transfer certain of our rights and/or obligations to another person or entity.

[batesmarshall]

Hi Yelloguy,

It's my understanding that there is plenty of existence proof of new homeowners renegotiating contracts with the major third-party ownership (TPO) solar companies, SunRun included. Your best bet is to call them and try to work something out with them. In most cases you're talking to a servicing company, not SunRun directly, and they are prepared to have this conversation with you. Tell them you don't like your deal and are unhappy.

Cheers,

Bates

[yelloguy]

Hi Yelloguy,

It's my understanding that there is plenty of existence proof of new homeowners renegotiating contracts with the major third-party ownership (TPO) solar companies, SunRun included. Your best bet is to call them and try to work something out with them. In most cases you're talking to a servicing company, not SunRun directly, and they are prepared to have this conversation with you. Tell them you don't like your deal and are unhappy.

Cheers,

Bates

Very interesting. I will call them tomorrow and find out what they say.

[russ]

Hi Yelloguy,

It's my understanding that there is plenty of existence proof of new homeowners renegotiating contracts with the major third-party ownership (TPO) solar companies, SunRun included. Your best bet is to call them and try to work something out with them. In most cases you're talking to a servicing company, not SunRun directly, and they are prepared to have this conversation with you. Tell them you don't like your deal and are unhappy.

Cheers,

Bates

Please provide backup with that kind of assertion - otherwise it falls into the category of salesman's BS. The contract holder has no requirement or legal reason to get into the contract.