Premature Sunpower lease buyout option after several years - is it still alive ?

[AZstars]

With SunPower lease, beside the potential buyout at selling the house, it was possible to request the buyout after year 6. Now I am told that the buyout option was removed several months ago (but it is still stated in their proposal, maybe not removed by the programmers?).
Do you know whether in your area it is still offered ? Shall I insist on the buyout option as condition of acceptance ?

[russ]

(but it is still stated in their proposal,).

If they offer it in writing then they should have to make the deal - this is not kids play - matter of fact truth in advertising laws probably cover this type of thing.

[Naptown]

Sunpower has eliminated the prepaid lease along with Suncap.
The buy out was nice but I think there was trouble brewing with the IRS over the stated value of the buyout.
Waiting too long to sign may also make you not be able to get the prepaid option. I know Suncap limited the amount of time from proposal to actual acceptance to 2 weeks. Don't know about Sunpower.

[AZstars]

Sunpower has eliminated the prepaid lease along with Suncap..

Do you remember when ? If this was just like 2 weeks ago, I would have a stronger argument. But you are right, I shall not delay waiting on other companies proposals, at this point they possibly would not be competitive..

[Naptown]

Do you remember when ? If this was just like 2 weeks ago, I would have a stronger argument. But you are right, I shall not delay waiting on other companies proposals, at this point they possibly would not be competitive..

I believe they announced it last week some time.

[SoCalsolar]

Sunpower still has a PPD Lease and a buyout between year 6 and 7.

Sunpower still has a PPD Lease and a buyout between year 6 and 7. Now do either of them make sense any more? SunPower still has PPD leases they increased the cost of them in CA by about 30% last week. I believe other markets were impacted as well I have not verified markets outside of CA. The early buy out (EBO) is still in the lease docs but changed from the original version pre-2012. Pre-2012 the lease had a guaranteed buy out price written into the contract. That unfortunately is not in accordance to the laws in this grand country so SP changed it and made it just about worthless. There is an EBO price on the contract pg 7. There is stipulation that your buy out after year six is good for one specific day and will be the HIGHER of the EBO or Fair Market Value (FMV). SP is guaranteeing that you will pay at least the amount on the contract but maybe more depending on the FMV will be determined by a 3rd party appraiser.

Every Solar lease I have seen has similar language to avoid the ire of the IRS. If they say you can own it for this price after the lease or after 6 years, it is more than likely a lie.

[AZstars]

SoCalsolar,

thank you. I will request the EBO after the year 6 to be offered, similarly like they locked the old price. Those changes came at the same time, right ?
Why they would offer me the old price but not the EBO, if it is in the offer. I am aware of the "higher of" clause and the discussions on this board, how a 3rd party can make such appraisal. I just would to have the EBO option.

[kimo]

So if all the other Solar Co. that do leases follow suit, will that pretty much make it so a prepaid purchase rather than a lease makes the most economical sense? Might be better to take the TAX incentives if there still @ when I have the money for Solar system?

[Ian S]

Sunpower still has a PPD Lease and a buyout between year 6 and 7. Now do either of them make sense any more? SunPower still has PPD leases they increased the cost of them in CA by about 30% last week. I believe other markets were impacted as well I have not verified markets outside of CA. The early buy out (EBO) is still in the lease docs but changed from the original version pre-2012. Pre-2012 the lease had a guaranteed buy out price written into the contract. That unfortunately is not in accordance to the laws in this grand country so SP changed it and made it just about worthless. There is an EBO price on the contract pg 7. There is stipulation that your buy out after year six is good for one specific day and will be the HIGHER of the EBO or Fair Market Value (FMV). SP is guaranteeing that you will pay at least the amount on the contract but maybe more depending on the FMV will be determined by a 3rd party appraiser.

Every Solar lease I have seen has similar language to avoid the ire of the IRS. If they say you can own it for this price after the lease or after 6 years, it is more than likely a lie.

This sounds about right. SP probably realized that the prepaid was selling like hotcakes and decided to charge what the market would bear. More profit for them. As long as they price it a bit below the outright purchase cost net of rebates, tax credits, etc. some folks will still opt to lease as opposed to purchase. Others who can no longer afford the steeper upfront cost might just go the regular leasing route which is also a win situation for the lessor. For those were also considering purchase, that decision will be easier.

As for the EBO price, the following section from my lease is what leads me to believe that any running afoul of the IRS rules will wind up my responsibility:

4. Official Fees and Taxes: You agree to pay or promptly following demand to reimburse Lessor for any applicable sales or use taxes
or similar charges or levies over the term of this Lease (including any extensions) whether paid at Lease signing, included in the
Monthly Lease Payments or otherwise assessed. You also agree to pay as invoiced any applicable personal property taxes on the
System that your local jurisdiction may levy. Some fees or taxes may come due after the Lease terminates. You agree to pay any such
amounts within 10 days of the date of an invoice for such amount. You will be responsible for any fines or penalties if you fail to pay the
invoice when due. The Lessor has no responsibility to you for any increased real property taxes you may be subject to as a result of
the installation of the System.

[inetdog]

As for the EBO price, the following section from my lease is what leads me to believe that any running afoul of the IRS rules will wind up my responsibility:

I think that the official fees and taxes section was designed to cover property taxes and use taxes charged by the state or local government.
In the case of the buyout, the difference in price affects both your income taxes on the "gift" of higher value property and their handling of the expenses and deductions on their side, so that they cannot avoid IRS hassles.
Not offering pre-paid just costs them money, so they can make marketing allowances. Trouble with the IRS is priceless!

[Ian S]

I think that the official fees and taxes section was designed to cover property taxes and use taxes charged by the state or local government.
In the case of the buyout, the difference in price affects both your income taxes on the "gift" of higher value property and their handling of the expenses and deductions on their side, so that they cannot avoid IRS hassles.
Not offering pre-paid just costs them money, so they can make marketing allowances. Trouble with the IRS is priceless!

Good point. In any event, there will be a real disincentive for the lessee to exercise the EBO for anything less than FMV.

[KRenn]

With SunPower lease, beside the potential buyout at selling the house, it was possible to request the buyout after year 6. Now I am told that the buyout option was removed several months ago (but it is still stated in their proposal, maybe not removed by the programmers?).
Do you know whether in your area it is still offered ? Shall I insist on the buyout option as condition of acceptance ?

From a good source, this is what I was told. Price will be either the listed buyout price or the Fair Market Value price, whichever is higher. If you sell your home, you can buy it out for the estimated value price.

[KRenn]

Sunpower has eliminated the prepaid lease along with Suncap.
The buy out was nice but I think there was trouble brewing with the IRS over the stated value of the buyout.
Waiting too long to sign may also make you not be able to get the prepaid option. I know Suncap limited the amount of time from proposal to actual acceptance to 2 weeks. Don't know about Sunpower.

They didn't eliminate the prepaid option, they just jacked up their prices like 5000% percent. Bottomline, leasing is going away, the people who got on the boat previously, got great deals, there's still some decent deals to be found, but in many places, leasing will be nonviable in just a few short months here.

[KRenn]

SoCalsolar,

thank you. I will request the EBO after the year 6 to be offered, similarly like they locked the old price. Those changes came at the same time, right ?
Why they would offer me the old price but not the EBO, if it is in the offer. I am aware of the "higher of" clause and the discussions on this board, how a 3rd party can make such appraisal. I just would to have the EBO option.

The EBO has not been in effect since 2011. Ask for a contract and it will explain exactly what the EBO entails. Legally they can't offer you that early buy out price, they simply list it as an example of what that system might be worth at that time.

[AZstars]

EBO benefit

I still have problem to see what is the benefit of the EBO, if I am staying in the house, beside some flexibility like selling the system and getting a more modern one, of tinker with it (or be responsible for a failed inverter). Can you point me to any advantage of the EBO in full prepaid lease?