SunCap Financial Lease, too good to be true?

[russ]

The leasing company gets all the tax breaks you can avail plus depreciation and I don't know what else.

The system just plain costs them less though all tax payers make up the difference.

At the end of 20 years you own nothing with a lease unless it is stipulated otherwise in the original contract.

If you can front the money buying will be better for you in every case I have seen.

[Naptown]

Hi Jen
The point of the prepaid lease is you have a smaller up front cash outlay.
They will maintain the equipment for the duration of the lease at no cost to you.
There are options at the end to either purchase at fair market value, extend the lease or have the system removed.
Purchasing the system will generally be a better return than leasing if you have the cash to purchase and wait or the incentives and savings come back to you.

[JenB]

All offer the 20 year prepaid leases with no monthly payment. All depends on the upfront payment. Nothing special for SunCap.

The terms offered by all parties have improved significantly with competition.

Russ

Hi Russ - I have a question for you. What is the point of a prepaid lease? If you can prepay for a lease, wouldn't it make more sense to just buy the equipment outright? Unless the benefits of having the leasing company be responsible for maintenance, etc., I don't understand how leasing is a benefit.

Also, if the leasing company owns the equipment for the duration of the lease - what happens at the end of a 20 year prepaid lease? Do you then automatically own the equipment?

[russ]

On a prepaid lease there is no approval process. You pay, you get the lease.

Wrong - the equipment on the roof belongs to the leasing company - read and you will see where any transfer must be agreed to by them.

Easier? Yes Automatic? Not so.

[KRenn]

On a prepaid lease there is no approval process. You pay, you get the lease.

Not entirely accurate. If you decide you don't want to pay until after install, then there is an approval process.

[KRenn]

I think the point people are trying to make is that an outright purchase is financially the best deal you can make.
However you need to look at the incentives available to you that you would be missing out on by leasing and what they would be over the life
of the system and compare with the net over the course of a lease.
In the interest of full disclosure I do this for a living and just lost the first potential sale to a lease.
There is an advantage to leasing in that the initial investment is much lower than with a purchase. An up front lease is always the better of the options of a lease deal. However some other considerations come up with a lease. Over the life of the system provided you live there long enough the purchase will put more money in your pocket. Secondly say you decide to move in 15 years and you have a leased system. So you tell the potential new owners that they will save a bit on their electric bill over the house next door without the solar but in 5 years the leasing company is going to come and tear the system off the roof. They will water proof the holes but appearance is of no concern so they will be looking at replacing the roofing at that point if for nothing more than appearance. As a potential buyer that would be a huge negative over an owned system that will remain in place and continue to produce however lower than when new.
Bottom line if you have the cash buy, if not lease.

The advantage to the lease, and the only advantage is on a prepaid lease. On a prepaid lease, the system is yours for 20 years, you pay about 1/3 of the cost
out of pocket as compared to buying it. You receive full warranty, insurance and monitoring for the length of the lease. If you buy a system out of pocket, you still have to provide for the insurance and if the inverter kicks at year 12, you're now on the hook for the full replacement cost. I still think that the month to month is the least favorable of all but someone who is looking for the fastest return possible and the least amount of hassles might be wise to look at the prepaid option.

[Sunking]

Over the life of the system provided you live there long enough

There is one of the catches in the contract, the companies do not expect you to own it for the contract life, they expect you to default and resale it. In addition I would have to do some more research to be certain, but I think where there are leases, the state has SREC or FIT programmed involved otherwise there would be no potential profit.

Just like with anything you purchase, the best deal is always negotiating and pay in CASH.

[Naptown]

I think the point people are trying to make is that an outright purchase is financially the best deal you can make.
However you need to look at the incentives available to you that you would be missing out on by leasing and what they would be over the life
of the system and compare with the net over the course of a lease.
In the interest of full disclosure I do this for a living and just lost the first potential sale to a lease.
There is an advantage to leasing in that the initial investment is much lower than with a purchase. An up front lease is always the better of the options of a lease deal. However some other considerations come up with a lease. Over the life of the system provided you live there long enough the purchase will put more money in your pocket. Secondly say you decide to move in 15 years and you have a leased system. So you tell the potential new owners that they will save a bit on their electric bill over the house next door without the solar but in 5 years the leasing company is going to come and tear the system off the roof. They will water proof the holes but appearance is of no concern so they will be looking at replacing the roofing at that point if for nothing more than appearance. As a potential buyer that would be a huge negative over an owned system that will remain in place and continue to produce however lower than when new.
Bottom line if you have the cash buy, if not lease.

[fins]

Spell correctly then - the internet has made many too lazy to even use the spell checker that automatically shows most mistakes.

You make the claim that I see often when someone is trying to support an unsupportable proposition - blame someone for not being sympathetic to a desired position.

SunCap and the rest like them are dipping into the federal and state treasuries for their own benefit. They are offering this as it is an attractive business area for them - that is the only reason. No visions of RE or anything else except business are involved.

You must work for a financial company?

Of course they want the lease to work - easier and cleaner business for them. However, if it goes sour it will not be the leasing company that gets hurt - same as any other lease except for them using the subsidies & incentives for their own profit.

Russ

The facts are simple. Solar leasing is beneficial to the lessor and the lessee. The discount os far better to the lessee on a prepaid lease than an outright purchase. Full Stop. Numbers don't lie.

Also the equipment is guaranteed to perform at a given rate for the life of the lease. All equipment would be warranted for the life of the lease. Full Stop.

[fins]

...immediately attacking a detractor is always the best way to gain credibility. Forgive my incorrect spelling.

It sounds like you have something against making solar power affordable to the average household. The solar leasing companies are in business to make money, just like anyone else out there works to make money. However, they are committed to the vision of making renewable energy a viable option for residential electricity use. Nobody wins with a lease in default - believe me. SunCap and the rest of these companies are not out to get you. Besides, with the tightened grip on being approved for a loan these days you better be sure you are on sturdy financial ground or you won't be approve anyway.

On a prepaid lease there is no approval process. You pay, you get the lease.

[fins]

First off - it is cynical, not synical.

SunCap will sit on the leases for the 20 years? Possibly but it would be unusual.

If you sell the house the system just goes to the new home owner? Not quite correct - the new owner has to be approved by the lease holder or the lease has to be bought out by the home owner.

For some a lease may be fine - it is not a minor thing to be done just because it feels good. People can find something else to talk to the neighbors about other than their new solar system. Your home is collateral for the lease - don't forget that.

Russ

Sorry to correct but you are very wrong on transfer. On a fixed payment lease the new lessee would have to be qualified to transfer the lease. However, on a prepaid lease the transfer is very easy and npo qualification is necessary.

[KRenn]

All offer the 20 year prepaid leases with no monthly payment. All depends on the upfront payment. Nothing special for SunCap.

The terms offered by all parties have improved significantly with competition.

Russ

The big difference is that as far as the rates go, SunCap by far seems to have the
most favorable. Compare an equivalent month-to-month lease plan and from
what I've seen, SolarCity will typically come out $25 a month higher with an
escalator, Sungevity 15-20 and others fall in that range. Whatever their
financial engine, they're offering perhaps the most lucrative solar lease currently
on the market, but as I said before, this depends on the installer and their
individual price per watt charged as well.

[russ]

All offer the 20 year prepaid leases with no monthly payment. All depends on the upfront payment. Nothing special for SunCap.

The terms offered by all parties have improved significantly with competition.

Russ

[KRenn]

After further review, SunCap is actually pretty sound, good financial backing, good experience in the solar industry and the
best solar lease pricing I've seen thus far. Their typical month-to-month lease includes no annual lease payment
escalator which is a revolutionary step away from competitors such as SolarCity and Sungevity.


But because their pricing in part depends on the installers they happen to work
with, I'd make sure to get another quote or two as you could be with an installer
that is charging $5.50 a watt where another charging $4.85 a watt could get you
a much better deal.

Buying is always best, but the prepaid deal with SubCap is pretty legit, just
understand that someone WILL come for that system after year 20, regardless of all the BS the
salesman gives you about "well who's going to want a 20 year old system?"

Those systems can be scrapped, sold to the third world or used in other
installs at a heavily discounted price so don't buy into "it'll be too expensive to
tear it off your roof" jive.

[russ]

Spell correctly then - the internet has made many too lazy to even use the spell checker that automatically shows most mistakes.

You make the claim that I see often when someone is trying to support an unsupportable proposition - blame someone for not being sympathetic to a desired position.

SunCap and the rest like them are dipping into the federal and state treasuries for their own benefit. They are offering this as it is an attractive business area for them - that is the only reason. No visions of RE or anything else except business are involved.

You must work for a financial company?

Of course they want the lease to work - easier and cleaner business for them. However, if it goes sour it will not be the leasing company that gets hurt - same as any other lease except for them using the subsidies & incentives for their own profit.

Russ