San Francisco Bay area, 3.57kwh/6k, Is this a good deal or being taken for a ride ?

[donald]

How is a fully pre-paid lease a liability?

http://www.bloomberg.com/news/articles/2014-06-23/rooftop-solar-leases-scaring-buyers-when-homeowners-sell

Also, consider how goofy it is for a leasing company to get in the business of selling solar. Why would a buyer lease a product which will have its entire functionality used up by the initial owner? Does it make sense to lease a car when you are certain you will use up the entire life of the car? This is just an expensive form of finance, including a sales commission.

I'm not saying the OP can find a lower price today on a purchase. But this sort of leasing only exists in an immature solar market.

[J.P.M.]

A 3.57 kW system will easily cover a $80 / mo bill. They'd have to install garbage on the roof to miss that goal. I know it is unlikely, and the OP suggested something similar, but could they actually install bad panels that produce no power at all, and simply pay the $0.07 / kWH rate for underproduction? The price here is low enough that I'd be at least a little worried about a scam like that, in a world where people sell empty boxes on Ebay and get away with it because the description was sufficiently vague.



How is a fully pre-paid lease a liability? Edit... does the contract say anything about transferrability?

Once you get a copy of the contract, if you scan and post it maybe you will get some better feedback instead of people just imagining what could go wrong.

To perhaps get a bit more info to determine whether the lease may be a liability, a look at it would help. Something sounds a bit fishy to me. Maybe I'm too cynical along the lines of - if a deal sounds too good to be true, it probably is.

Aside from that, any equipment may or may not be an asset/liability, depending on the (potential) buyer's thoughts/opinions. I'd tend toward thinking it's at least partially a function of system age. Not to put too fine a point on it, but sort of like thinking that a good selling point for your home might be to throw in your all your 20 year old furniture to sweeten the deal.

[sparkle]

My two concerns would be;
What if the system did not perform as expected and only cover 50% or less of what you use instead of the 90% they claim it will.
Is there anyway that some type of increase or fee be added to your monthly lease bill associated with the increase in rates by your POCO?
Most leases have some type of "production" guarantee but also have a yearly increase due to electric "rates" changing.
Other than that it sounds like you found a gem of a system at a cost most people would be crazy to walk away from. I hope it works out for you.

they guarantee the production with about 1% decrease every year. if they fall short of goal at end of year, they pay about 6/7 cents/kwh for shortfall. they also can offset overproduction from one year to another year. My POCO is PG&E (norcal). AFAIK, they don't have any extra fee yet. There is escalation in shortfall price but that is very meager, rising up to 10.5 cents by end of year 20.

also lease can transfered to another owner. since there is no payment (lease is prepaid), and electricity is free to keep, i think it might actually increase the value of home instead of being considered liability. who in right mind would refuse free electricity ?
there is a risk that they install bad stuff, but they have already given me make and model of panels (Trina Solar TSM-255PD05.05) and inverter (ABB PVI-3.8-OUTD-S-US-A (240V)). Black on black. they have contracted the installation to SunRun. Got decent reviews on yelp ( it would be hard but not impossible to fake that many reviews). Got a decent website which can estimate your full install with different power system). If it is scam, it must be pretty elaborate one.

[J.P.M.]

they guarantee the production with about 1% decrease every year. if they fall short of goal at end of year, they pay about 6/7 cents/kwh for shortfall. they also can offset overproduction from one year to another year. My POCO is PG&E (norcal). AFAIK, they don't have any extra fee yet. There is escalation in shortfall price but that is very meager, rising up to 10.5 cents by end of year 20.

also lease can transfered to another owner. since there is no payment (lease is prepaid), and electricity is free to keep, i think it might actually increase the value of home instead of being considered liability. who in right mind would refuse free electricity ?
there is a risk that they install bad stuff, but they have already given me make and model of panels (Trina Solar TSM-255PD05.05) and inverter (ABB PVI-3.8-OUTD-S-US-A (240V)). Black on black. they have contracted the installation to SunRun. Got decent reviews on yelp ( it would be hard but not impossible to fake that many reviews). Got a decent website which can estimate your full install with different power system). If it is scan, it must be pretty elaborate one.

One other question I might have: How is such a 1% annual decrease defined, measured and verified ? My experience is that such determination takes more equipment, time and knowhow that is available to most folks, not to mention the patience for the hassle.

[inetdog]

We have had one report of a contract offer from SolarCity which quoted a price several thousand dollars lower than the actual price and in the fine print of the contract essentially said that the quoted price was the price after deducting the estimated future value of the SRECs produced, while the up front payment was for the full price of the system, not the "quoted" price.
Pretty shady!

[sparkle]

One other question I might have: How is such a 1% annual decrease defined, measured and verified ? My experience is that such determination takes more equipment, time and knowhow that is available to most folks, not to mention the patience for the hassle.

they go by production by system. 1 % reduction in production from first year.

[sparkle]

We have had one report of a contract offer from SolarCity which quoted a price several thousand dollars lower than the actual price and in the fine print of the contract essentially said that the quoted price was the price after deducting the estimated future value of the SRECs produced, while the up front payment was for the full price of the system, not the "quoted" price.
Pretty shady!

indeed. don't see that in my contract. I am paying $500 now and remaining amount just before installation starts.

[sparkle]

couldn't upload it to this forum. it kept erroring out. so uploaded outside...
here is my redacted contract.

http://docdro.id/1504x

waiting to hear back from all experts here..

[donald]

I just skimmed the document, the the purchase section seems to be the problem. Effectively, most people will pay twice for the system.

[sparkle]

I just skimmed the document, the the purchase section seems to be the problem. Effectively, most people will pay twice for the system.

can you please explain what do you mean ?

[donald]

can you please explain what do you mean ?

10c - "greater of (i) fair market value......". The attached depreciation schedule means nothing.

If you assume a future buyer of your house will agree to take the lease, then this isn't a problem.

[J.P.M.]

they go by production by system. 1 % reduction in production from first year.

W/out knowing your zip/orientation, that performance warranty seems low enough as to be about useless. Basically, it's so low, that you'll trip over if not careful.

[sensij]

http://www.bloomberg.com/news/articl...omeowners-sell

10c - "greater of (i) fair market value......". The attached depreciation schedule means nothing.

If you assume a future buyer of your house will agree to take the lease, then this isn't a problem.

That link has nothing to do with fully pre-paid leases.

Honestly, I'm not seeing anything in the contract that looks particularly onerous. Pretty much just taking their stock lease for when they do actually charge for energy and substituting a $0.00 / kWh price instead. It is still a technically a lease, and might limit flexibility for adding more panels and/or changing equipment out at some point in the next 20 years as technology advances.

I doubt Sunrun actually does the installation, more likely they subcontract out to whoever they can find to do the work at the price they are offering. At this system price, they've got to be scraping the barrel, so I'd be worried about installation quality and / or the choice of racking / mounting system. If you go forward, you should definitely plan to be there during the install to stay in front of any problems.

[sparkle]

That link has nothing to do with fully pre-paid leases.

Honestly, I'm not seeing anything in the contract that looks particularly onerous. Pretty much just taking their stock lease for when they do actually charge for energy and substituting a $0.00 / kWh price instead. It is still a technically a lease, and might limit flexibility for adding more panels and/or changing equipment out at some point in the next 20 years as technology advances.

I doubt Sunrun actually does the installation, more likely they subcontract out to whoever they can find to do the work at the price they are offering. At this system price, they've got to be scraping the barrel, so I'd be worried about installation quality and / or the choice of racking / mounting system. If you go forward, you should definitely plan to be there during the install to stay in front of any problems.

yeah, i read on yelp that they do subcontract work. most of the reviews are good except few (most few bad contractors) but there were followups on yelp from company reps who then made it right for those customers and customers came back to post that they were made whole and are satisfied.
thanks for your suggestion. I will definitely plan to be in house when they install the system.

[sparkle]

10c - "greater of (i) fair market value......". The attached depreciation schedule means nothing.

If you assume a future buyer of your house will agree to take the lease, then this isn't a problem.

good point. I am not too much worried about that though. i live in san francisco bay area and people would fall head over heals to buy a house even with worse lease (fixed monthly price + escalations)