Your input on my situation is much appreciated!

[Ian S]

Some might wonder how the lessor makes its money on a prepaid lease if they are on the hook for inverter replacement sometime in the future. It's because they are entitled to accelerated depreciation on the price of the system over and above all the other incentives. As an individual buyer you don't get that benefit.

[Ian S]

First of all, since you have access to a chunk of money by borrowing it from your 401K, I'd forget about the monthly lease. There are two problems with it that make it very unattractive: the escalator and the added difficulty in getting a home buyer to take over the lease should you sell your home before the end of the lease. If I were buying your home, I'd use that monthly lease as a point of negotiation to get you to lower your price. Others would just walk away once they learned of it. There's a thread on this forum with a real life example - the potential buyer eventually walked away even though it was his dream home.

So you're left with the choice of a prepaid lease and outright purchase. Both run about the same amount after tax credit but that tax credit is not immediate. Most here would recommend an outright purchase but it really depends on your individual situation. Yes, there's that feeling of ownership through purchase but along with that comes responsibility of dealing with any warranty issues on your own after the installer is out of the picture. Just my opinion but I'd bet on SunRun being around longer than a small local outfit. Plus, if you are there for 15 years, there's a very good chance you'll have to replace the string inverter that would be covered under the lease warranty but not under purchase unless you pay for additional coverage. Some would say that the buyout price for the equipment at the end of the lease will be a large outlay but I don't buy that argument - it will be nominal IMHO but who knows for sure. You don't mention the equipment for the SunRun lease but if you go for the SMA inverter which I prefer, make sure it has the emergency power outlet specced into the price.

So it's really whether the comfort of ownership outweighs the hassle of dealing with various entities if anything goes wrong under warranty. Minor issues might include the higher initial outlay and the possibility of added insurance with purchase - check with you agent and also see if the SunRun lease insures the equipment. Another minor issue might be the terms of payment: usually with a purchase, you have to put a significant amount upfront especially with a small installer. With my prepaid lease, I didn't pay a cent until nearly two months after the system was up and running. Oh and make sure you get a copy of the lease before you sign and read it thoroughly. They are usually in plain English but check with a lawyer if you have any questions.

[Mike90250]

BUY, not lease.. When you buy, YOU get the credits, and the ownership. If you lease, you share any savings with the lease company.

Sizing. Anticipate your load increases and shoot to offset 90% of your consumption. Does your gird company do monthly or annual averages ? Any excess you "gift" them, is money you overspent on panels.

Panels have +20 year lifetimes, if not damaged with big hail or flying lawn chairs in wind.

inverter has 10 year lifetime (high powered electronics) and you can expect to have to replace it.

Be sure they install PV array lightning protection AND Grid side protection for your inverter
(Midnight SPD is a good brand)

Ask for a Transfer Switch bid (for a backup generator you can plug in) This is the time to install it.

[solarbogle]

My situation is as follows:

I live about 50 miles north of Los Angeles in CA. I have a 5 bedroom home that is on a hillside with plenty of unobstructed sun. My electrical bill through Edison averages about $140/mo. It may go up a bit as we put in a small hot tub last week. Through estimates, I am told that a 4.94 kWp system would produce 98% of my annual production, 7,718 kWh. My family and I plan on living in this home for at least another 15 years. My wife would like to buy a second fridge for the garage which will use some power so I doubt my usage will go down, if anything up.

I have had quotes from Solar City, Sun Run and California Solar Electric (small company in Ojai, CA). I have the ability to access money to purchase a system with cash. This would be accomplished by taking a loan against my 401k that will not cost me any interest, the only downside being time out of the market. As the market has run up substantially, it might end up being a good move to take a little out now and put it back in over the next few years if the market dips (sell high, rebuy low



Here are my questions:

Should I lease or buy?

Should I buy a system that covers 100% of my usage, or less?

Sun Run is pushing a prepaid 20 year lease for $13,000. They claim that they guarantee it all for next 20 years. At end of the lease, option to buy at the value set then which they claim to be little to nothing. The purchase price in cash for same system is $18,500 and of course, I would get 30% back in tax credit. The sales guy claims the prepaid is better because the warranty is better for that system since it is all inclusive. The warranty for the purchase isn't all inclusive, it is 25 years for panels, 12 year inverter, and 10 year on "workmanship."

California Solar Electric designed a 5.04 KW DC with an annual production of 9,311 KwH supplying 111% of annual usage. 18 x solar world model SW 280 mono black. 1 x SMA America model SB5000TL-US-22. This would cost $18,533 ($3.68/watt) or $12,981 after tax credit ($2.66/watt). This is a smaller company and I am uncertain if that should come into play for decision making.

Solar City: $26,520 for a 5.2KW system! Yikes. Yingli and Trina panels. Full 30 year warranty on EVERYTHING. AFCI or SolarEdge inverter.



Another option from the companies is a month to month lease where I pay them for the kWh and it has a 2.9% annual escalator. Obviously this is the least money to be saved, but no money up front.

I would appreciate any input!! Thanks!