Buying a home existing solar...

[fishinfirefighter]

Update.

So I still havent heard from the leasing company since we spoke last week Im sure the lawyers are scratching their heads and trying to come up with something. I spoke with another real estate attorney just to be sure I was getting good legal advice and the other attorney also felt basically the same. "Unless they have the most flawless lease contract on the planet and filed with the state it will be VERY difficult for them to legally repossess the system at this point." He was shocked they hadnt taken it back after sitting for so long. The problem is that noone has ever heard of anything like this before, the companies are usually taken care of during foreclosure or allowed to remove the system.

I just stopped by the property on my way home from work and the inverters are PVP3500 and a PVP2500, are these any good? Im assuming the 2500 and 3500 are watts? So basically its a 6kw system?? Also everything was on but the main meter was off so they obviously havent been rolling the meter back for these 2 years its been sitting which adds to the case if they legally could take it back they would have by now. I looked closer at the installation and theres not a Judge, Jury or court anywhere that wouldnt consider it a permanent fixture OR that it would not cause a good amount of damage to remove!! All the electrical conduit runs through the home then pops back out to the inverters, the tile roof has been more than just slightly modified to accept the panels as well. Everything has been drilled and anchored through the tiles that they cut.
Anyway Ill keep updating...

[russ]

So far so good! Hope it keeps up!

[J.P.M.]

Russ, I'm not sure you have a good grasp of the meaning of the verb "whine." One would be guilty of whining when for example, every time a solar system purchaser discusses the great deal they got after tax credits and utility rebates, the whiner takes to the comments to complain about the existence of such credits and rebates.

I thought a whine was a rant that got tweaked.

J.P.M.

[fishinfirefighter]

Well....so much for that! Leasing company lawyers contacted the bank and they basically stopped escrow until we work out something with the leasing company. Turns out they DID have that flawless contract and it WAS filed with the state... Dammit!!! SSSOOOoooo..

3 choices;
1. We walk like nothing ever happened and bank forfeits our deposit since it wasnt disclosed ANYWHERE and apparently noone involved could pick up the phone and call to find out if it was a lease or not.
2. We assume lease or purchase the system. Theyve expressed willingness to negotiate obviously but I HIGHLY doubt they can persuade me into a lease or come down enough on price.
3. They remove the system. Im concerned with the aftermath of that idea. Wondering if they would just leave the mounting brackets like Ive read or bust up my tile roof.. this sucks..

Unfortunately we havent closed escrow so I cant lawyer up and battle in court over it as the bank has decided we either work it out or they will pull out and allow the leasing company to remove it then re-list. Absolutely ridiculous.
Pretty pissed right now considering we paid more than we should have assuming it came with it...
BTW, the system is through solar service center.

[Ian S]

Well....so much for that! Leasing company lawyers contacted the bank and they basically stopped escrow until we work out something with the leasing company. Turns out they DID have that flawless contract and it WAS filed with the state... Dammit!!! SSSOOOoooo..

3 choices;
1. We walk like nothing ever happened and bank forfeits our deposit since it wasnt disclosed ANYWHERE and apparently noone involved could pick up the phone and call to find out if it was a lease or not.
2. We assume lease or purchase the system. Theyve expressed willingness to negotiate obviously but I HIGHLY doubt they can persuade me into a lease or come down enough on price.
3. They remove the system. Im concerned with the aftermath of that idea. Wondering if they would just leave the mounting brackets like Ive read or bust up my tile roof.. this sucks..

Unfortunately we havent closed escrow so I cant lawyer up and battle in court over it as the bank has decided we either work it out or they will pull out and allow the leasing company to remove it then re-list. Absolutely ridiculous.
Pretty pissed right now considering we paid more than we should have assuming it came with it...
BTW, the system is through solar service center.

Well, that sucks! So, is the bank willing to take less since the price was originally based on the system coming with it? If not, then, at best, you'd be paying for a system (and not getting it) with removal and at worst, if you purchase the system, you'd be paying for it twice. Maybe time to walk away? But it's also possible that the leasing company may do a deal if they think you'll walk away. After all, no one is making lease payments right now are they? Or maybe the bank has to start doing so! Anyway, sorry it's working out this way for you.

[fishinfirefighter]

The bank may be willing to take less, We'll find out tomorrow. Ive got some descent negotiating skills and I know whats at stake for the leasing company so Ill have to see what we can come up with. What do you guys think would be fair and realistic value for a 6kw system installed 8/2011? Not sure of the panels but the inverters are pvp3500+2500.

[silversaver]

in case of forclose, the bank has to clear the title that satisfly all the lien. There should be a lien from solar company....

Most likely the price will be low and without warranty.

[peakbagger]

The book value on the leasing company's books is going to be far more than the scrap value of the system. The panels are worth at best 50 cents per watt as they have no guarantee for anyone for who buys them . The inverter is also in the same situation, its worth at best 50% of a new one as there is no warranty for a future user. The racking really isn't a wear component but is specific to the installation so unless the leasing firm has a use for it, its worth scrap value for aluminum. The design of racking is evolving so odds are, the racking system is already obsolete. Most racking system attach to special roof mounts that are flashed into the roof. Removing the roof mounts is what would expose the roof to leaks and would require a roofer to repair. Unless they did it out of spite, it wouldn't be worth the time to remove the mounts. Depending on the design, there most likely will be studs on raised blocks at intervals on the roof. The leasing company has to look at labor to remove everything and restore what they damage and that is costly relative to the equipment value and its lost money for them. I would figure 4 man crew for 8 hours. Use a charge out rate of $50 per hour and that's $1600 out of their pocket.

So using $3.50 per watts installed that's $21,000 when new, subtract an unknown amount for state and local incentives, I will assume $1 per watt so the total cost is $15,000 minus a 30% federal tax credit $4,500 so the out of pocket leasing company cost was $10,500. It costs them $1,600 to take them down so the total they need to cover is $8,900. Now factor in at best 50 cents per watt resale value of $3000 for the panels and possibly 50% of $2,500 for an inverter and they are sitting on a $3,400 remainder that they are truly out of pocket. Of course solar equipment pricing has dropped and they most likely front loaded the installed cost to maximize rebates so its on their books at a higher value.

Given the economics, they really are going to push hard to get you to buy the system out as taking it down is going to give them a bigger hit.

[Naptown]

Seems the bank has some responsibility here in that they seemingly misrepresented the property. I would push to have them either buy out the lease and leave it
Have it removed roof replaced ( expensive for the bank) and reduce the price by x as determined by an appraiser. Since solar is not there.
Point out to the bank that the leasing company can remove it and then have the expense of restoring the roof and re marketing the property at most likely a lower selling point than your contract is for.
Both the bank and leasing co have a bit to lose here.

Get to negotiating

[snic]

You haven't mentioned whether it's a prepaid lease and if it's not, what are the terms (monthly payment, etc)? If it's prepaid, why not just assume the lease and let the leasing company continue to service the system as needed? It's almost as good as owning - if not better, since the leasing company would probably replace the inverters once they blow.

[silversaver]

You haven't mentioned whether it's a prepaid lease and if it's not, what are the terms (monthly payment, etc)? If it's prepaid, why not just assume the lease and let the leasing company continue to service the system as needed? It's almost as good as owning - if not better, since the leasing company would probably replace the inverters once they blow.

It is forclosed house... I don't think the original owner has the $$$ for pre-paid lease.... I will assume it is a standard 20 years lease since the original owner doesn't have much $$$ (gave up on the house) and still want solar. lol

[snic]

I wouldn't assume anything. Presumably the OP saw the lease contract that the leasing company finally found - and if he didn't, then he should look at it before making any decisions.

[Ian S]

I wouldn't assume anything. Presumably the OP saw the lease contract that the leasing company finally found - and if he didn't, then he should look at it before making any decisions.

If you look back through this thread, I believe the O.P. stated that the leasing co had sent the original owner to collections - that probably wouldn't have happened with a prepaid lease.

[inetdog]

If you look back through this thread, I believe the O.P. stated that the leasing co had sent the original owner to collections - that probably wouldn't have happened with a prepaid lease.

Based only on being sent to collections, it could still also be a PPA rather than a lease. That would leave the ownership of the panels entirely with the installation company.

[SoCalsolar]

I think think the issues and numbers are much different than

I think think the issues and numbers are much different than the previous posters realize. The numbers I am hearing sound so far off I'm almost laughing. First off the guys you pick up at Home Depot charge more than $12 an hour to get on a roof. That $50 an hour rate is from 1982. Four guys for 8 hours is more than double the mentioned cost above. This is almost surely a monthly lease I don't think the installer offers a PPA although this deal was originally consummated in 2011? What I haven't heard discussed is the tax implications for the leasing company which change drastically if they now sell you the system. The depreciation they have taken on the system now becomes less valuable and taxable based on the price they sell to you. Being 2011 they likely tapped the grant money that was available even that may change the equation. If they offer you a buy out it is most likely not going to be based on the best pricing you can get today. It will more likely be based on what they stated the cost to be for tax purposes in 2011. Like $6.50 plus a watt. Even though the cost of removal is likely double what was posted above the out of pocket cost of selling to you in the form of lost depreciation and tax penalties is likely much higher. Over time the lost monthly revenue would likely equal more money than the tax ramifications of selling out the lease now but trust me these leasing companies are not overly concerned with long term revenue streams. Those are the concern of those same investors (suckers) that buy mortgage backed securities. The leasing company knows that it is in a position of strength with your bank on its side. I would expect them to offer you a monthly payment which may or may not make sense. Your next step is to negotiate the lowest monthly cost with the leasing company then go to the bank point out that if you walk away they must now disclose the solar payment (use the first number the leasing company throws at you) to any perspective buyers and ask for a corresponding price reduction reduction. You could even use the Berkeley study to show the bank value or the %80 valuation Wells Fargo and other banks are using to validate your requested reduction. The housing market seems to be slowing a bit but it will come down to how badly they want it off the books. Sometimes it pays to have a loser on the books at the end of the year. Any idea which leasing company it is?