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Many of you probably didnt read my last post, but I am purchasing a bank owned home with leased solar panels on it. We got the roof all certified even if the solar ends up being removed. The lease payments are about $160 a month for a 8.5kw system consisting of 32 panels. The system is about 4 years old, I am not interested in taking over the lease, but was going to offer to purchase the system from them or possibly due a prepaid lease. Do you think the purchase route or the prepaid route is better? It does have a central inverter and I know those are expensive so that is why I was considering the prepaid lease. My other option is to just have them come remove it and get a new system installed. If you think the purchase is the better option than what would be a good purchase price considering they got the tax credits already and it is a 4 year old system. I am hoping they will make me a good deal on it since they hopefully do not want to come and remove it. Thanks, this forum has been great.
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I dunno, maybe offer them fifty cents a watt to buy the system outright? It's worth a shot and it's no real loss to you. The cost to remove and put the roof to a pre-installation condition, solar panels and other hardware they may or may not be able to reuse, might make it not cost effective for them to take it back. I'm sure someone will chime in and give a dollar figure of what the system is worth. -
This is some information lots of folk contemplating a lease/ppa vs purchase would be interested in. The topic of whether solar adds value or not to your house has been discussed/debated in a few other threads recently.
I am for sure not expert but I will take a stab at how I might look at it if I were purchasing this home. I would not be turned off by a 4 yr old system as long as I had it inspected and was comfortable with the sizing and equipment used. However I would probably look at it much like a used car and value it much the same. So here is my take if the current price for the same size or equivalent system today was say $4.00 per kwh and the federal credit is worth 30%. That same system today might cost $32,000.00 minus the 30% tax rebate of roughly $9600.00 leaves a net new value of about $22,40000 less about a 50% (4yr) depreciation factor would leave me at a Fair market value of say $11,200.00. That would be close to my Maximum offer to purchase or you could work out a prepaid lease based on something similar. So like the previous poster said start out with an offer of $.50 to $.75 a kwh and see where it goes from there. It seems like you are holding most of the cards unless i missed something in your previous post.Comment
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That's what I'd be wondering. This is a murky situation and I'd want to be sure there are no gotchas. Nobody and I mean NOBODY has the interests of the home buyer at heart in this deal. The bank just wants to throw everything in the buyer's lap, the Title company will find some way to weasel out of any liability, the real estate agent just wants to close the sale, and the solar lessor wants their $160 a month for the next 16 years plus I suppose any accrued payments that haven't been made. With all those folks against me, I'd want a tough guy on my side. Whatever might be worked out is unlikely to be boiler plate documentation and I'd want legal help in making sure it's all on the up and up.
That said, a prepaid lease might be better than a purchase unless you are sure that all warranties transfer with the purchase. I wouldn't necessarily rule out the monthly lease either - I'd just want to see exactly how the numbers all worked out.Comment
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Legal counsel was worried about the condition of the roof if they were to remove it after close of escrow. The guy that did our roof certification didn't have any big concerns about it and even offered to be there when they removed the system to be sure that no damage was done. I have made sure not to sign anything stating that I will assume the lease. I was informed that something was recorded with the county stating the solar company retains ownership of the system but it did not constitute a lien or anything against the property, just that I couldn't use the system or anything without their approval. My hope was that the foreclosure would include the solar system as well, but it appears that is not the case because of the documents they filed. I was thinking about offering to purchase the system for like $3,000 or so but was afraid that I may have to replace the inverter in not too long... After escrow closes I also want to just use the regular electricity for a month or two and see what payments would be, because utility company will not give me average monthly rates for the house.Comment
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No that was not from my lawyer that is what the document that was recorded said.Comment
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Have you had anyone out to assess the system? It seems to me that you're worries are about the inverter but being only 4 years old, if the system is in good shape, you shouldn't worry about it too much for a number for years. Also, a quick inverter change in 5-8 years (assuming that is when it goes) is not the most expensive ordeal.
I would have someone check the system first to make sure the panels and wiring are in good shape and, if so, made an offer to take it over. I was never fond of someone else owning equipment on my house, be it a rental water heater or solar system and I only install homeowner owned systems.Comment
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Yes I did in fact talk to a lawyer and he did review the previous owners lease agreement.Comment
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Legal part of this discussion aside, what do you think the system is actually worth now? How much would it cost them to come take it all down? I only want to keep the solar if I can get a good deal on it, because this is my first home purchase and I wasn't really financially prepared to spend a bunch of money on solar yet. Any thoughts are greatly appreciated. But I have talked to roofers and lawyers and I am not concerned about the legal side of it as of now.Comment
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Do you know if the system works and everything is functioning as it should be? That would be my primary concern. If all is ok then give an offer to purchase it. Like others and myself have stated, you have the upper hand here. Like I have suggested, throw out a number of fifty cents per watt and see what they do. Removing the system, getting your roof to a pre-installation condition costs will have to be eaten by the installer. Using my 23 panel with inverter system as a referance, the first day 4 people started at 9 AM and knocked off at 4 PM, 28 man hours. Today 3 people showed up to wire and install panels, I'm assuming they will be here about 7 hours or so for 21man hours today for a total of 49 man hours. Now add in if the panels and other hardware are worth anything, they may say ok. Good luck.Comment
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Yeah, make sure it's working: you don't want to buy a pig in a poke. Also, you may want to check and make sure all manufacturers' warranties can be transferred if you wind up purchasing the system. If you've seen the lease agreement, it may state a buyout number to show you where their starting position is.Comment
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I didnt see a buyout number on the lease agreement. I know that it was a 15 year lease with no option to purchase which i thought was strange. Do you guys think I would be better off doing a prepaid lease for $4,000 or so or just simply buying them outright? I dont know how much maintenance they really require.Comment
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