Rather than speculate about what the system is worth or how much or little you should offer for it. Why don't you just call them up and tell them you were not wanting to assume the existing lease and ask them to make you an offer you can not refuse and see what they say. If you do no like the offer at least you have a starting point. tell them you first inclination is just to have it removed and the roof brought back to original condition. If you decide to purchase or re-lease the system ask about the existing warranty and insist that it be certified as working and in good condition. My gut tells me that they will not be too interested in a really Low Ball offer of $3000 or $4000 as they can resell or reuse the panels somewhere else. Removing the Whole system will take less than a whole day so its not that expensive IMHO. I am pretty sure there lease spells out in black and white what there requirements and your options are albeit everything is negotiable.
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Purchase or Pre-paid lease of 4-year old Solar System
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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.
I would make the pitch that you're uneasy with solar to begin with and you are absolutely not interested in a monthly lease commitment for over a decade. So, if that's all they're interested in offering, then tell them they can come pick it up tomorrow but let them know you will have a roofer there to monitor the process. Might even have a lawyer draft the letter. They really don't want to have to remove the system and dispose of it. That's not what they're set up for. Actually, you don't want that to happen either - you just want the best deal on it. At that point they may decide to let you buy it for a few grand. I don't know. There's another scenario where they act like a dog-in-the-manger and don't pay to remove it but don't let you use it either. I don't see that happening but I suppose it's a possibility. The other wrinkle is if it's only four years old, I don't think they'll have completed the depreciation on the system - probably takes five years or longer. Not sure how that figures into their calculation of what they'd need for a buyout.
I have to say you have a fascinating situation here and I know I'm not the only one anxious to see how it all turns out!Comment
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I'll suggest either have the leae company remove the solar system or buy them at low price.
You will not get any warranty coverage on this solar system and it will cost you some more money to get it start with Net Metering. (check with your utilities company before your purchase the system). Most likely they will offer you a good deal or let the foreclose bank worry about it.Comment
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Just how much can four year old panels ripped off a roof be worth considering that the sponsor of this site has brand new name-brand panels available for less than a buck a watt? The leasing company is simply not in the business of removal and marketing of used panels. And if they contract that out to someone else, that outfit is going to want to make a nice profit on the deal too. On an 8.5 kW system, $4000 is nearly $0.50/watt. That's a generous offer IMHO.Comment
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The problem is leasing company will not get 30% Fed Incentive from government if they re-use the panels, so I don't think they will like to take them back. There is no way they can get good money for 4 years old panels. Business is business, they can write it off as lost and gain some money for selling the system to the home owner. Of course they will try to make money first then take the last step.Comment
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Just how much can four year old panels ripped off a roof be worth considering that the sponsor of this site has brand new name-brand panels available for less than a buck a watt? The leasing company is simply not in the business of removal and marketing of used panels. And if they contract that out to someone else, that outfit is going to want to make a nice profit on the deal too. On an 8.5 kW system, $4000 is nearly $0.50/watt. That's a generous offer IMHO.Comment
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Thought I'd revive this to bring the discussion to the proper thread...
Based on the information provided, SC should be working with the estate to resolve the contract. I'd like to see this document that you said was recorded to better understand the language. And timing of the purchase and your agreement with the letter does have standing...Comment
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The company hasn't yet finished depreciating the equipment. They do that over 5 or 6 years so they still want the tax benefit of 3-4K just leaving it on the roof. They are going to be able to charge off the lost lease payments. They are going to want to leave the system in place for the next couple years to finish that tax benefit. Where is the system located? Are they getting credits too? I think if you could get it for 4K that would be an absolute steal. They are probably going to want something in the 10-15K range to be made whole. I think it is reasonable to assume the FMV of the system is more in the 8-10K range.
The other thing to consider is keeping the lease but see if they will renegotiate the payments down. Tell them you can only afford $80 per month. If you can the payments down to match the price per kWh you would pay with a purchase, call it .07 per kWh then you've done well and don't have to make any out of pocket expenditure. Might be easier on their end to have you keep the lease at the lower payment. Like someone else said it appears you hold all the cards.
Who is the lessor?
Super interesting post. Let us know how this all turns out.Comment
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The problem with assuming the previous lease is there was no option to purchase at the end of the 15 years.Comment
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I think your case presents some interesting things, and the importance of understanding the full context. What we don't have is a full context of the actions by each party and the timeline. It can be argued that SC needs to settle with the estate, since neither the bank nor you are under contractual obligation. The previous owner signed the lease. I did read through an SC lease before and I don't recall a "death clause" in there. But in most cases, creditors settle with the estate of the deceased. I'm sure this isn't the first time this has occurred. As I'm sure you know, time spent with an attorney and laying out all of the facts will help clarify the situation.
I see key areas of estate law, contract law and property law all relevant.
We can play with scenarios, but I'm pretty sure if SC made no attempt to collect from the estate, transfer lease to bank, or collect from bank, or remove equipment during the time period prior to your purchase, it may be considered abandoned. There also should be no reason why you couldn't flip on the breaker, as it is on your property. Removal of the equipment is also interesting since, technically, it is on your property and I'm assuming you purchased the property from the bank with out conditions of the equipment not being yours (unless you did and this would all be moot), and would require court order for them to enter your property to remove.Comment
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When leasing first started we reviewed a number of them - all had a clause giving the owner (SC) access to the system at reasonable any time.[SIGPIC][/SIGPIC]Comment
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Sorry, post accidentally trashed. Please repost.Comment
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Originally posted by quicksilver8907I did sign something stating that the bank did not own the panels and that they were still the property of solar city but they still cannot enter my property without my permissionComment
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We can play with scenarios, but I'm pretty sure if SC made no attempt to collect from the estate, transfer lease to bank, or collect from bank, or remove equipment during the time period prior to your purchase, it may be considered abandoned. There also should be no reason why you couldn't flip on the breaker, as it is on your property. Removal of the equipment is also interesting since, technically, it is on your property and I'm assuming you purchased the property from the bank with out conditions of the equipment not being yours (unless you did and this would all be moot), and would require court order for them to enter your property to remove.
They have their security interest in the hardware, and that would be it. That would not be extinguished by foreclosure on the real property itself.
i wonder if the estate ended up with a bankruptcy filing?SunnyBoy 3000 US, 18 BP Solar 175B panels.Comment
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These construction liens(so called mechanics lien) don't apply here and if they did, that's why you bought title insurance.
Solar City probably made a Fixture Filing at the county. Which records ownership of the solar panels on your roof. This would be the legal proof they need to reclaim that property. If you were to pull those panels off and sell them yourself you would probably get into big trouble.
I think your worst case is SC comes out and pulls the panels off and you stand over them and make sure the roof is put back into 'original condition'. Best case is they are abandoned property, I would turn the system on. Seems silly to waste it by having it just sitting there.Comment
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