Solar City

[J.P.M.]

This deal is probably not a lease, but it still just plain sucks. I'd run away from it. Find a reputable solar vendor and buy/finance something for about $3.50-$ 3.75/Watt and pay ~ $42- $44K after tax credit.

[davelittle]

$87K for 17KW system is $5.11/W installed which is probably the most expensive sunpower quote I've seen in a long time, especially for that size of system. My guess is that in order to give you 2.5% 30 year loan, Solar City has to buy down the rate, so you pay more up front. The best solar loan I was told was about 7%. Sunpower's loan is normally 9-10%. If you are going to get a loan, why don't you do a HELOC which is currently at 1% + prime (2.99%) = roughly 4%. Plus all the interest you pay to HELOC is tax deductible in itemized deduction method, and there's no early payoff penalty. I'd also get some quotes locally from other vendors and with other reputable brands (LG, Keocera, Panasonic, Canadian Solar, Solar World etc.) of panels. I've seen plenty of quotes with < $3.5/W for your size of system with LG300/305W which's comparable in build quality and performance to the Sunpower without the $ premium.

Good points. It's not a 2.5% loan they're giving me. The loan payments increase by 2.5%/year over the course of the loan. There's not a stated interest rate, but I can figure that out. I can pay it off anytime with a HELOC and you're right, I'd consider that to be a tax deductible loan.

I'll get quotes from other vendors on their panels and check their guarantees. Thanks a lot for breaking down the installed rate. I'm pretty focused on the monthly savings, but maybe they can be even higher than what Solar City's quoting.

[davelittle]

This deal is probably not a lease, but it still just plain sucks. I'd run away from it. Find a reputable solar vendor and buy/finance something for about $3.50-$ 3.75/Watt and pay ~ $42- $44K after tax credit.

Thanks. I appreciate the honesty. Solar City talks up their warranty and guarantees. I'm assuming the other vendors offer similar guarantees? I'll check into it.

[Ian S]

I don't think the net cost is 61K the tax credit as I understand it only reducing your taxable income it's not a rebate in cash.

Am I understanding that correctly, so if one was in say a 25% tax bracket the saving is 25% of 26,000 or $6500 in real dollars

No, it's a tax credit but it's non-refundable meaning that if your taxes are less than the credit you will have some credit to carry forward for a year - or possibly more depending on what if anything Congress does regarding the tax credit. N.B. it's your actual taxes for the year that the credit offsets and is before your withholding and/or estimated payments are applied. A useful wrinkle if you might normally be unable to utilize the full credit but have a traditional IRA: consider converting part of the IRA to a Roth which has many advantages over a regular IRA. The additional taxes due can be offset by the remainder of the tax credit.

Re Solar City purchase pricing: they are almost always higher than other vendors and their equipment is whatever they can get cheapest at the point in time they build your system. For them to put a 2.5% escalator on a loan payment just adds insult to injury IMHO. You can get a far better price and better loan terms elsewhere I'm sure.

[Ian S]

I see many doomsday posts about the rising cost of electricity. My personal feeling of being gouged by my PUCO probably was the first thing that got me interested in installing solar in my house. That said, when I did the research myself, I found that the energy rate increases weren't as bad as it felt and NO WHERE NEAR where the solar industry was trying to portrait. Here is an excerpt from a UC Davis study...

EIA’s most recent Annual Energy Outlook (2013) projects relatively modest electricity price increases in the range of 1.9-3.4% per year during the period 2013-2040

link to study

Don't take my word for it, look for yourself so that you are confident in your decision. Rates are actually coming down for SCE right now as they realize solar prevents them from gouging customers who have the means to do something about it. Ultimately, rates will go up, just make educated calculations.

What can also happen is for fixed fees to rise - we're seeing that in Arizona. In that case, those added fees are not offset by your solar production. Demand rate structures such as are being implemented in Arizona can also effectively increase your rates without necessarily being fully offset by your solar production.

[gvl]

Is this going to be a roof-mount? For 17kW DC we are talking about 50+ panels here. Ground mount will be north of $4/watt likely, if so $80k before tax credit may not be too detached from reality.

[J.P.M.]

Is this going to be a roof-mount? For 17kW DC we are talking about 50+ panels here. Ground mount will be north of $4/watt likely, if so $80k before tax credit may not be too detached from reality.

$5.11 is a long way north of $4.00 wherever it's mounted.

[Alisobob]

Any feedback?

1. Just how big is this house, and where is all this power going?

2. Have you ever had a efficiency survey done?

solar80.JPG

These are SCE's rates from 14 years ago...

Tier 1 $0.15
Tier 2 $0.20
Tier 3 $0.24
Tier 4 $0.26

Today in 2015, they are..

Tier 1 $0.15
Tier 2 $0.19
Tier 3 $0.28
Tier 4 $0.32

Anyone paying a payment escalator, is in for a rude awakening.

Dont fall for the "sky is falling" B.S.

[rwb1921]

1. Just how big is this house, and where is all this power going?

2. Have you ever had a efficiency survey done?

[ATTACH=CONFIG]6412[/ATTACH]

These are SCE's rates from 14 years ago...

Tier 1 $0.15
Tier 2 $0.20
Tier 3 $0.24
Tier 4 $0.26

Today in 2015, they are..

Tier 1 $0.15
Tier 2 $0.19
Tier 3 $0.28
Tier 4 $0.32

Anyone paying a payment escalator, is in for a rude awakening.

Dont fall for the "sky is falling" B.S.

Interesting, shows not much difference. SDGE has gone up more I think and is higher than that now. These are our current rates - 1-$0.17 2-$0.20 3-$0.37 4-$0.39

[ghoticov]

The way I read their quote is that the Financing Term is 30 years, with a 2.5% fixed annual increase in the payment. The fine print references loan repayment rates, so I don't think it's a lease.

Dont walk.... RUN away from this. The solar city people obviously didnt explain to you what you are buying. It is a power purchase agreement and you could find a bettwr deal in LA. Keep doing your research.... most of us have been through this already. Solar City was $15,000 higher on the system I bought.

[davelittle]

1. Just how big is this house, and where is all this power going?

2. Have you ever had a efficiency survey done?

[ATTACH=CONFIG]6412[/ATTACH]

These are SCE's rates from 14 years ago...

Tier 1 $0.15
Tier 2 $0.20
Tier 3 $0.24
Tier 4 $0.26

Today in 2015, they are..

Tier 1 $0.15
Tier 2 $0.19
Tier 3 $0.28
Tier 4 $0.32

Anyone paying a payment escalator, is in for a rude awakening.

Dont fall for the "sky is falling" B.S.

Thanks Bob. I read some of the thread on your installation. My house is 3,000 feet and I wish I knew where the power is going. We have a hot tub, a big fridge, a freezer, another fridge in the garage. 2 HVAC systems and it's a drafty old ranch house with 12 foot ceilings. And a 700 foot guest house. But I still think we pay way too much. I've had electricians out and they can't figure it out either, so at least I don't feel like a total idiot (most of the time).

[davelittle]

Dont walk.... RUN away from this. The solar city people obviously didnt explain to you what you are buying. It is a power purchase agreement and you could find a bettwr deal in LA. Keep doing your research.... most of us have been through this already. Solar City was $15,000 higher on the system I bought.

Thanks a lot for the feedback. I appreciate it.

[foo1bar]

I've had electricians out and they can't figure it out either, so at least I don't feel like a total idiot (most of the time).

IMO that means it's time to buy a TED5000 (or similar) to see where the power is going.

Generally the big energy users are things with a motor (hot tub, freezer, refrigerator, AC, pool pump, sump pump)
And often those things need something that can measure power consumed by 220V circuit over a day (or week)

they aren't always the big users and aren't all 220V, but most likely.

I'd also get a Kill-a-watt to check on things like freezer, fridge, etc - things that do plug into an outlet.
Maybe you've got a bad seal on your freezer and didn't know it.
You may be able to borrow a kill-a-watt from your utility or city or library.

[Ian S]

another fridge in the garage.

That might be one thing to get rid of. Probably an older less efficient one and struggling in a hot garage.

[insaneoctane]

IMO that means it's time to buy a TED5000 (or similar) to see where the power is going.

Generally the big energy users are things with a motor (hot tub, freezer, refrigerator, AC, pool pump, sump pump)
And often those things need something that can measure power consumed by 220V circuit over a day (or week)

they aren't always the big users and aren't all 220V, but most likely.

I'd also get a Kill-a-watt to check on things like freezer, fridge, etc - things that do plug into an outlet.
Maybe you've got a bad seal on your freezer and didn't know it.
You may be able to borrow a kill-a-watt from your utility or city or library.

I totally agree with this advice. If you do buy a Ted 5000, you will get a benefit from it whether you install solar or not. Before you would even consider solar, you have a lot of energy efficiency work to do. Understand how low you can get your energy consumption down to, comfortably, before you go spend tens of thousands of dollars to supply your energy