Seeking feedback for my newly signed 20-yr SolarCity 'prepay' SolarLease in Plano, TX

[bonaire]

>> . I'm currently paying $.17/kWh. My Average bill for last year was $147 /month.

I hope you don't take this the wrong way. You're best bet is to do an energy audit, go total CFL or LED lighting, seal some leaks and not get Solar PV. The best way to "save money" on electricity is to cut usage. Going from large TV to smaller LED TV and putting DVRs on timers is one of the bigger steps to cutting usage.

My home has a .165/kWh cost (just reduced this year, compared to last year over .17 in summer - due to Natural Gas price drop). I use at least 1000 kWh a month and now with my Chevy Volt, will use more. However, my payback for a purchased system is still 10-years. SRECs in PA just suck - $20 each. My buddy in NJ put up a 21KW Solar system thinking he could cash in on the SRECs. Utilities ate up the renewables allowances and now they are $80/ea and falling.

I could conserve more but we've dropped from nearly 2000 kWh a month to about 1000 kWh/Month after fixing a 220V well-water pump that was failing about a year and a half ago. My in-laws won't be plugging their RV into our home after this October so our total grid-draw will be dropping. I'm probably going to go Solar but am hesitant unless I can do it under $4.50/Watt from an installer. My sister-in-law and husband bought an 8-panel below 2KW system for nearly $20K a couple years ago. Really REALLY bad idea due to their low income (he's a truck driver, she doesn't work). And they financed it - so paying interest on a loan for Solar is also a really REALLY bad idea.

Anyway - think about it. I just don't think you need such a large system for such a small amount of electricity usage. I honestly don't need it but want to fuel my Volt from home and hedge against power price and gasoline price increases. We still have room to conserve and I just picked up some CFL bulbs for our kitchen chandelier which used incandescents up until tomorrow.

[Chieu]

For your 32-panel Yingli system, it appears they are using 240W panels, so overall that is 7680 Wp but no matter, should produce nearly the same with good sun.
I am pricing out a similar sized system. 32x SolarWorld 255W panels, two PowerOne 3.6 inverters. If they give you 3.0 inverters, you may not have as much output as 3.6's.
With your SolarLease, do you pay anything else besides the up-front pre-pay? Like monthly charges or anything in the 20-year term? For my system, I need trenching, 120' AC wire, 1/2 roof and 1/2 ballast mount (16 each). Installer near me offered a price of $4.56/Watt for a purchased system.

This current design is not final, so things could change after the site audit team come and do all the measurements and the actual engineers build the system. I'm going by what it said on the contract and hoping that everything works out. The production is guaranteed so I'm relying on that too. I was told for the current design they will use 2-PV-1 3.0 and 2-PV-1 5000. I'll attach the info the rep sent me. I want to say that my home has no shade they have it at 1%. I'll be removing all trees around the house and trimming what is needed. For my lease all I have to pay is the up-front and nothing else for the 20 years. Thanks for the info on the panels I’ll ask the auditors when they come for the audit.

I have a question, what about MIBs system? 7.9kW DC, 33 panels, 1 inverter and est. production of 11,754 kWh/year. What do you think about this?

The cost difference is the value of the SREC's which Solar city would own
There is almost no reason for someone who lives in Mass or NJ with extraordinarily high SREC values to lease.
Do the math on a purchase and look at the 3 or 5 year annuity SREC pricing and a purchase makes much more sense.
Solar City is laughing all the way to the bank.

Yes, buying the system would be the best thing for me; I see what you’re saying. I know a little bit about the SREC's. Their value has gone down a bit but still a very good incentive. If I buy the system it'll cost me around $37k. Then I would get the 30% fed credit back, don't know if this is correct or not but it'll take about 3 years to get the whole 30% a chunk every year I file my taxes. Then I could sell my maybe 10 SREC's each year, not sure what they actually go for now.

I chose the Solar Lease because I had the $10k and no plans for it. I don't want to owe any money to banks or whoever and I’m not willing to take more than the $10k out for this project. I'm currently paying $.17/kWh. My Average bill for last year was $147 /month. This lease is supposed to bring my bills down to around $5 a month to the electric company I'm hoping. If it works out, I'll get my $10k back in about 6 years and then profit from there for 14 years. Also by Leasing Solar City will warranty, maintain and insure the system and its performance for the whole 20 years. Not sure if they’ll do all that if I bought it, maybe the warranty.

[Naptown]

NJ SREC's just closed at $80 .. not very extraordinarily high at all. I *wish* they'd go higher but I doubt it.

I don't deal in that market but that is a huge reduction in price.
Didn't they just change the RPS to help the market somewhat.

[Lomag]

NJ SREC's just closed at $80 .. not very extraordinarily high at all. I *wish* they'd go higher but I doubt it.

[Naptown]

Thanks for your post and good luck to you as well!

Any idea why my seemingly similar system would cost $3,000 more than yours?



Can you explain 7680 Wp? Thanks!

The cost difference is the value of the SREC's which Solar city would own
There is almost no reason for someone who lives in Mass or NJ with extroadinarily high SREC values to lease.
Do the math on a purchase and look at the 3 or 5 year annuity SREC pricing and a purchase makes much more sense.
Solar City is laughing all the way to the bank.

[bonaire]

You said: >> The system is 8.16kW DC

7680 Wp (Watts peak power)

240 * 32 = 7680

Under perfect conditions, the system might put out close to 7680 Watts. They somehow quoted you above 8KW (8000 Watts) but you can't get there with 32 * 240.

To get 8.16KW (matches what I am doing) you need 255W panels.

[MIB]

Hi, Funny how I found this thread because I’m in a similar situation. On the 17th of August I signed with Solar City in South Jersey. I talked with about 3 other companies (Solar Run, Real Good Solar and Astrum Solar). I went with Solar City because they were well known and their rates were the best out of the four. I have been looking everywhere for reviews and trying to learn about the company and about the home solar system.
I too signed a 20-year 'prepay' Solar Lease, it'll cost me $9,890 ($4,445 the day before the install and $4,445 the day after it’s turned on) and this should cover 97% of my electric bill according to Solar City rep. If that 97% is accurate then I’m thinking it should cover 100% because the system should help keep my home cool so I wouldn't have to use the A/C as much and they based this system off of last year’s bills, extra hot last year.
The system is 8.16kW DC with an est. annual production of 9,748 kWh. This system is supposed to have thirty-two YINGLI_YL240P-29b panels and two Power One Aurora Inverter. They will be sending a site evaluation team to measure my roof in a few weeks.
So far my experience with Solar City is very good. My questions were answered and process has gone smooth. Long way to go. Good luck with yours.

Thanks for your post and good luck to you as well!

Any idea why my seemingly similar system would cost $3,000 more than yours?

For your 32-panel Yingli system, it appears they are using 240W panels, so overall that is 7680 Wp but no matter, should produce nearly the same with good sun.

I am pricing out a similar sized system. 32x SolarWorld 255W panels, two PowerOne 3.6 inverters. If they give you 3.0 inverters, you may not have as much output as 3.6's.

With your SolarLease, do you pay anything else besides the up-front pre-pay? Like monthly charges or anything in the 20-year term? For my system, I need trenching, 120' AC wire, 1/2 roof and 1/2 ballast mount (16 each). Installer near me offered a price of $4.56/Watt for a purchased system.

Can you explain 7680 Wp? Thanks!

[bonaire]

For your 32-panel Yingli system, it appears they are using 240W panels, so overall that is 7680 Wp but no matter, should produce nearly the same with good sun.

I am pricing out a similar sized system. 32x SolarWorld 255W panels, two PowerOne 3.6 inverters. If they give you 3.0 inverters, you may not have as much output as 3.6's.

With your SolarLease, do you pay anything else besides the up-front pre-pay? Like monthly charges or anything in the 20-year term? For my system, I need trenching, 120' AC wire, 1/2 roof and 1/2 ballast mount (16 each). Installer near me offered a price of $4.56/Watt for a purchased system.

[Chieu]

Hi, Funny how I found this thread because I’m in a similar situation. On the 17th of August I signed with Solar City in South Jersey. I talked with about 3 other companies (Solar Run, Real Good Solar and Astrum Solar). I went with Solar City because they were well known and their rates were the best out of the four. I have been looking everywhere for reviews and trying to learn about the company and about the home solar system.
I too signed a 20-year 'prepay' Solar Lease, it'll cost me $9,890 ($4,445 the day before the install and $4,445 the day after it’s turned on) and this should cover 97% of my electric bill according to Solar City rep. If that 97% is accurate then I’m thinking it should cover 100% because the system should help keep my home cool so I wouldn't have to use the A/C as much and they based this system off of last year’s bills, extra hot last year.
The system is 8.16kW DC with an est. annual production of 9,748 kWh. This system is supposed to have thirty-two YINGLI_YL240P-29b panels and two Power One Aurora Inverter. They will be sending a site evaluation team to measure my roof in a few weeks.
So far my experience with Solar City is very good. My questions were answered and process has gone smooth. Long way to go. Good luck with yours.

[MIB]

I admire your dedication to "green" energy production and willingness to put your money up front to support it. At your current power cost it seems you are purchasing about $16,500 worth of electricity up front for just over $13,000. So you are getting about a 21% discount on that power which is nice, but I wonder if you were to put that $13K into other investments if it could grow far more over the same period.

Certainly from a financial analysis side of things the only way I see this really being a better investment than say a bank CD is if the cost of electricity in your area goes up significantly - which it may or may not. Impossible to really predict that these days (natural gas oversupply at the moment seems to be pushing electric rates down near us, but that could be temporary etc...).

I also have wondered what happens if the leasing company goes under and they have all these solar systems listed as assets. If their creditors come after them (which they will) then what happens to those who have pre-paid the leases. It has been quite some time since I took business law so I don't know where you would fall in order of creditors with your claim - if high enough you could be fine, but that is worth knowing. And I wouldn't count on the 'arbitration' clause to protect you as frankly once someone files for bankruptcy it doesn't matter what the arbitrator says - it is up to the judge in the case and the laws related to what sort of claim each creditor has.

Thanks for your thoughtful comments!

[HappyInMa]

I admire your dedication to "green" energy production and willingness to put your money up front to support it. At your current power cost it seems you are purchasing about $16,500 worth of electricity up front for just over $13,000. So you are getting about a 21% discount on that power which is nice, but I wonder if you were to put that $13K into other investments if it could grow far more over the same period.

Certainly from a financial analysis side of things the only way I see this really being a better investment than say a bank CD is if the cost of electricity in your area goes up significantly - which it may or may not. Impossible to really predict that these days (natural gas oversupply at the moment seems to be pushing electric rates down near us, but that could be temporary etc...).

I also have wondered what happens if the leasing company goes under and they have all these solar systems listed as assets. If their creditors come after them (which they will) then what happens to those who have pre-paid the leases. It has been quite some time since I took business law so I don't know where you would fall in order of creditors with your claim - if high enough you could be fine, but that is worth knowing. And I wouldn't count on the 'arbitration' clause to protect you as frankly once someone files for bankruptcy it doesn't matter what the arbitrator says - it is up to the judge in the case and the laws related to what sort of claim each creditor has.

[MIB]

Do they have any clauses for situations in case SolarCity fails as a company? Does the equipment on your house get used as any kind of collateral on a loan they may manage for the project? If they fail, could a creditor come looking to pick up the equipment?

Thanks for your excellent questions! There are definitely elements of risk with the lease agreement, but here are my answers:

1) Yes, here is the clause: "SolarCity agrees to ...create a priority stream of operation and maintenance payments to provide enough cash flow in our financing transactions to pay for the Limited Warranty obligations and the repair and maintenance of the System in accordance with this Lease even if SolarCity ceases to operate."

2) The lease agreement does not explicitly mention whether the equipment gets used as collateral or not. I'll see what I can learn. 9/4/2012 UPDATE: I asked the SolarCity energy consultant that I've been working with and he emailed "The equipment would not be used as any kind of collateral on a loan."

3) I suppose a creditor could come looking to pick up the equipment, but if I don't get everything I am entitled to under the lease agreement, I could seek remedy under arbitration.

[bonaire]

Do they have any clauses for situations in case SolarCity fails as a company? Does the equipment on your house get used as any kind of collateral on a loan they may manage for the project? If they fail, could a creditor come looking to pick up the equipment?

[MIB]

Hello, I signed a 20-year 'prepay' SolarLease with SolarCity on Aug. 31 and I have 14 days to cancel.

The main points are below. Thanks in advance for your helpful opinions and expertise! -Michael

1) SolarCity will own the system and any associated credits, rebates, etc.

2) System: 7.920 kW DC (STC) photovoltaic (6.91 kW AC) with 1 inverter and approximately 33 panels flush mounted on one south-facing roof, 40-degree pitch, in Plano, TX

3) I must pay $13,060 total in about 4 months or so. (Half is due upon installation, and half is due upon inspection.) I will have no other payments to SolarCity for the next 20 years.

4) SolarCity guarantees solar production throughout the 20-year term. 11,754 kWh is guaranteed in year 1, and this level gets reduced by 0.5% annually, all the way down to 10,686 kWh in year 20.

5) SolarCity will annually pay me for any cumulative shortfall, at a rate of $0.0553 per kWh.

6) If the system overproduces, I benefit from the 'free' energy.

7) TXU will credit any surplus solar generation beyond what I use. (Current rate is $0.075 per kWh.)

8) For the 20-year duration, I must provide a continuous high-speed Internet connection.

9) For the 20-year duration, I should hose the panels off as needed. (Bird crap mostly, I suppose.)

10) After the 20-year term I can renew, upgrade, or get 'free' removal.

11) SolarCity is full service and will take care of every step of the installation process.

12) SolarCity uses only the highest quality solar panels, equipment and hardware.

13) SolarCity uses panels that are sleek and attractive and feature a low profile aesthetic.

14) SolarGuard monitoring service is included.

15)

16) Extended Warranty & Repair Service on system and roof is included.

17) Insurance Coverage is included.

18) I can get $400 for any friend referrals. Put down 'Michael Barth', and I'll split it with you!

19) And for the August promotion, I get a 16GB "New iPad" approximately 2 months after installation.