Power Purchase Agreement Questions

[Ron_CA]

Hi Everyone, My daughter just went in to escrow on a house with an existing solar set up. There is a SunRun Power Purchase Agreement that she is required to sign to complete the transfer.

It is an 11.84 kW system that sun run is guaranteeing will produce 18234 kWh @ .115 with a monthly payment of $174.74.

Also states "Your PPA Does Not Have a payment escalator."

I don't know much about solar agreements but this seems like a pretty solid deal. What am I missing.
Thank you

[J.P.M.]

How old is the system and how long is the agreement good for ?

[slinthicum]

Maybe a look at their poor reviews might provide answers. https://www.solarreviews.com/installers/sunrun-reviews

[Ron_CA]

System is almost 2 years old

[Ron_CA]

Maybe a look at their poor reviews might provide answers. https://www.solarreviews.com/installers/sunrun-reviews

Yeah pretty scary even though a lot are because of delays in installation.

[Ron_CA]

How old is the system and how long is the agreement good for ?

System is almost 2 years old and agreement is for 25 years.

[J.P.M.]

System is almost 2 years old

Well, before I signed or committed to anything, I'd sure take a very hard look at the agreement including the fine print (read it 2X and take notes).

I always tell folks to avoid the solar bottom feeders (of which Sunrun is one), but this system is where it is.

When you or anyone rads the agreement, you'll find out that it's not as good a dal as you might think. The vendor will never lose.

Regardless of whatever you discover by reading the agreement, I'd go back to the seller and tell them to remove the system or reduce the selling price of the home by at least as much as the buyout price of the system because it's a crappy system installed and maintained by a vendor with a crappy reputation and you don't want it.


Regardless of the low per kWh and non-escalation, I'd resist the impulse to act without looking at the bigger picture. Fact is, the current owner signed the PPA and they're on the hook for it. No one else.

Potential home buyers in situations such as these are naive with respect to how much of an advantage their whip hand has in negotiations of how to deal with the white elephant PPA's represent.

[Ampster]

Some PPAs have a clause that allows the original Lessor to move the system. Five years ago my daughter bought a house with a Solar city PPA. I urged her tell the seller to take the system but she loved the house and did not want to jeopardize the transaction. It has cost them constantly escalating costs. A new solar system would have been better.

[Ron_CA]

Well, before I signed or committed to anything, I'd sure take a very hard look at the agreement including the fine print (read it 2X and take notes).

I always tell folks to avoid the solar bottom feeders (of which Sunrun is one), but this system is where it is.

When you or anyone rads the agreement, you'll find out that it's not as good a dal as you might think. The vendor will never lose.

Regardless of whatever you discover by reading the agreement, I'd go back to the seller and tell them to remove the system or reduce the selling price of the home by at least as much as the buyout price of the system because it's a crappy system installed and maintained by a vendor with a crappy reputation and you don't want it.


Regardless of the low per kWh and non-escalation, I'd resist the impulse to act without looking at the bigger picture. Fact is, the current owner signed the PPA and they're on the hook for it. No one else.

Potential home buyers in situations such as these are naive with respect to how much of an advantage their whip hand has in negotiations of how to deal with the white elephant PPA's represent.

J.P.M is it crappy system because of the equipment that SunRun uses? The PPA is like 40 pages long and plan to read it again today but WOW.

[Ampster]

if you run the numbers $174.74 is an annual expenditure of $2,097 to produce 18,234 kWh. That is a cost of $0.115 per kWh. Last year I installed a system that cost $2.50 per Watt before ITC and based on a reasonable life of components my overall cost per kWh will be $0.08 per kWh before the Benefit of a 26% ITC. Somewhere in that 40 pages may be an option to purchase or other provision if the buyer refuses to assume the PPA.

[Ron_CA]

if you run the numbers $174.74 is an annual expenditure of $2,097 to produce 18,234 kWh. That is a cost of $0.115 per kWh. Last year I installed a system that cost $2.50 per Watt before ITC and based on a reasonable life of components my overall cost per kWh will be $0.08 per kWh before the Benefit of a 26% ITC. Somewhere in that 40 pages may be an option to purchase or other provision if the buyer refuses to assume the PPA.

I did the math and saw how they came up with the $174.74/ month.
Yes the buyout today is approx $31,000. I saw the exact number but don't have it in front of me.

[J.P.M.]

I did the math and saw how they came up with the $174.74/ month.
Yes the buyout today is approx $31,000. I saw the exact number but don't have it in front of me.

There are those who know that the home seller is on the hook for that buyout. Some of those folks who know that are potential buyers of homes. Liability for possible future dealings with a cappy vendor as well as the resulting uncertainties associated with that vendor's system may be something that a potential buyer doesn't want - at least not without some price consideration close to, say, $31K.

The potential home buyer did not sign the PPA. The homeowner did,

Find an ambulance chaser that knows the law as it relates to real estate and pay for an hour of advice to help your daughter see just how much power she has in this situation and leave emotion out of it. Like Michael Corleone said: "It's just business."

[Ampster]

I did the math and saw how they came up with the $174.74/ month.
Yes the buyout today is approx $31,000. I saw the exact number but don't have it in front of me.

That is a price of about $2.62 per Watt without the ITC. Hard to know what your daughters cost of funds are so not everyone will make the same decision. I did a self install and barely came under that price per Watt but my cost included $3,000 for an electrical panel upgrade.
As far as I know SunRun has a reasonable reputation regarding the quality of the materials but they do push the PPAs because they are where the profit is. My neighbor is considering one with them and I encouraged him to get other proposals.

[Ron_CA]

I found another PPA with Solar City/ Tesla to compare to. First of all it's 16 pages not 40.

20 year term vs 25
.1640 per kWh vs. .115
2.9% annual increase vs. 0
Can move system vs cannot move

So different, man these things are a pain in the ass. Why is SunRun PPA 40 pages. Feel like something is hiding in there that I'm not seeing.

[silversaver]

If you can use up all the energy, then it is good deal since there is no way to back out and no need to think about it unless you don't want the house which is very unlikely at today's market.