SunPower Lease Proposal - Sanity Check

[VIPRBYTE]

Hey everyone, another newbie here... been reading up for a while on solar and been interested in seeing how it can help offset my personal electric bill. Started asking around with people in my neighborhood and really got 2 main companies that were recommended, Sunrun and SunPower. Here's my story...

Let me preface this with my plans... current usage is approximately 17,900 kWh per year. (yes... it's alot, I know). Living in Illinois, the costs and taxes are crazy so looking to make an exit in approximately 7 years when my youngest is done with HS.

Sunrun: First proposal I got based on a few recommendations from people that got multiple bids and all of them said they were the best to work with and the cheapest. Costs seemed reasonable and would save me a decent amount per year on electric. For a 12.40 kW system (12,809 kWh/yr), it was $106/mo, with first 6 months for $1/ea, no money down. This was for 40 x Longi LR6-60HPH-310M panels, 40 enphase inverters, etc. Pricing was based on $.099/kWh for the duration of the 20yr contract.

SunPower: Second proposal I got. Really liked their panels and how more efficient they were since it would only require 26 panels for a 10.4kW system (12,500 kW system) and after a little pushing, their cost was equivalent at $108/mo (no 6 month free incentive though offered in Illinois). Biggest problem was their contract... 2% annual increase to monthly costs. This was really the deal breaker because it didn't make financial sense at that point. Thanked them and told them I was going to decline and go with Sunrun. Was ready to sign contract with Sunrun and phone started blowing up and ultimately they provided an extremely aggressive proposal at $58/mo, no annual increase! This was based on $.057/kWh which is cheaper than I'm even paying for supply right now (or possibly ever paid for that matter). So I added more panels and finally ended with 28 SunPower A-Series 400W panels, integrated inverters, 11.4kW system (13,400 kW system) for $63/mo, with no annual increase.

Needless to say, I've signed with SunPower and am waiting on the site survey to see whether I can fit any additional panels on the roof and expand a bit further at the same pricepoint per kWh. Broke the news to Sunrun and they couldn't believe the pricing that I was receiving and didn't think that it could be accurate. After reviewing the SunPower contract, it was what it was.

Since I'm looking to exit in about 7 years, I didn't want to take on debt right now and hope I can recoup costs when selling and instead like the idea of the monthly payment that can be transferred to new homeowners. I can save a significant amount of money over the next 7 years and have a nice incentive to offer to a new homeowner when the time comes.

Welcome any input or comments on this SunPower setup as well as any input from those that have done a lease transfer when selling their home.

TIA!

[J.P.M.]

In spite of the B.S. from those with skin in the game that claim, among other thing , the PV always increses the value of a home or property, an intangible and somewhat location dependent variable is the idea that homes with leased systems might often be viewed as less desirable than homes with owned systems and so they may stay on the market longer and take a hit. It can go either way.

Anecdotal and local to my HOA /area only (zip 92026), homes with leased systems seem to sit on the market longer. Been that way for several years. Savvy buyers have caught on to the idea that leased systems can be an albatross around the neck of a seller, or at least enough potential buyers have that opinion to be able to lower the number of interested buyers in a property with a lease attached to it and so use that as a bargaining tool.

Even though I am of the opinion that leases are generally a very bad idea, there are exceptions and your situation may be one of them as the prices you write of sound unusually low - maybe too low.

I'd read ALL the fine print. I'd also disabuse myself of any notion that PV, and particularly leased PV will automatically lead to a quicker sale or a higher contract price when you do sell.

[VIPRBYTE]

Thanks J.P.M. for the input. I won't put too much hope in the solar system helping reduce my market time. If anything, I'm hoping that solar DOES become more common in my area so that it doesn't raise questions for people when looking at purchasing a home, but only time will tell. In the meantime, I do believe in my individual situation that the lease option does make sense.

[J.P.M.]

Thanks J.P.M. for the input. I won't put too much hope in the solar system helping reduce my market time. If anything, I'm hoping that solar DOES become more common in my area so that it doesn't raise questions for people when looking at purchasing a home, but only time will tell. In the meantime, I do believe in my individual situation that the lease option does make sense.

You're most welcome. Understood.

Just read all the fine print, and maybe look/enquire about early buyouts on the lease.

Above all, Caveat Emptor.

[Mike90250]

..... In the meantime, I do believe in my individual situation that the lease option does make sense.

For the lease company, it's perfect. For the homeowner, it's a millstone.

[azdave]

If it were me, I would not install solar on my home if I planned to move out in 7 years, Even if it were a purchase system that would reach payback before then, I would not go though with it.

I myself would never, ever do a solar lease. I think you would be crazy to sign a lease if a home sale is in your plans.

[scrambler]

I would really look hard at a lease, especially if you will be selling the home in 7 years...

Solar forums are full of horror stories of people who had a real hard time selling their home with such lease attached. With the yearly increase, the lease often becomes less and less attractive each year, and if so, the buyers will not want to assume the lease. That brings to another cause of the reported nightmares, which is that when people (owner or buyer) try to get out of the lease, this is made almost impossible by the leasing company who puts major roadblocks in, or makes it so expensive that no one can afford to do it.

So as JPM mentioned, REALLY read the fine print, and think about what will happen 7 years down the line.

Also make your calculations, because the money you stand to save during these 7 years may not be worth the hassle of the install and resell...

Food for thoughts

[VIPRBYTE]

I would really look hard at a lease, especially if you will be selling the home in 7 years...

Solar forums are full of horror stories of people who had a real hard time selling their home with such lease attached. With the yearly increase, the lease often becomes less and less attractive each year, and if so, the buyers will not want to assume the lease. That brings to another cause of the reported nightmares, which is that when people (owner or buyer) try to get out of the lease, this is made almost impossible by the leasing company who puts major roadblocks in, or makes it so expensive that no one can afford to do it.

So as JPM mentioned, REALLY read the fine print, and think about what will happen 7 years down the line.

Also make your calculations, because the money you stand to save during these 7 years may not be worth the hassle of the install and resell...

Food for thoughts

Thanks! My finale negotiated contract for the lease does NOT include any annual increase so year 1 will be $63 and all the way through to year 20 will be $63. I HAVE asked for the purchase price vs. lease just to see if it makes any sense for me to go that route to avoid any headaches during the sale.

With regards to not being worth it to go through the install and everything just for 7 years, I guess I'm just looking at what that 7 years can mean in savings, which based on the numbers I've run ends up being about $1,250/yr considering lowest end of production guarantee. So nearly $9k in savings over the years is absolutely enticing to me, so that's why I would consider the headaches of going through the entire process and having something installed and then include in the resell.

[scrambler]

Thanks! My finale negotiated contract for the lease does NOT include any annual increase so year 1 will be $63 and all the way through to year 20 will be $63. I HAVE asked for the purchase price vs. lease just to see if it makes any sense for me to go that route to avoid any headaches during the sale.

That sounds odd to me. $63/Mth is $756 per year and $15,120 after 20 years for a 10kW system....

This is not even the price they would normally charge for a straight install (probably half of what they would charge actually), so I am surprised.

Make sure you really read all the fine prints, especially the conditions of lease transfer when you sell.... that sounds a little too good to be true...

[VIPRBYTE]

That sounds odd to me. $63/Mth is $756 per year and $15,120 after 20 years for a 10kW system....

This is not even the price they would normally charge for a straight install (probably half of what they would charge actually), so I am surprised.

Make sure you really read all the fine prints, especially the conditions of lease transfer when you sell.... that sounds a little too good to be true...

I agree on it sounding too good to be true, but it's what is in my contract.Total cost of the 11.4kW system is roughly $31,000 minus Illinois' incentive, which is $13,800 as calculated in the agreement. This is what was used for the basis of the $63/mo payment ($17,000 / 240 = $70.83/mo minus $7.50 auto debit per month = $63.33/month payment). The few people I spoke with that have gone solar in my area, as well as the rep from Sunrun when I explained why I wasn't going with them, couldn't believe the cost either and could only assume I hit a desperate sales person who's trying to hit a target for the month at any cost.

For the least transfer, I've ready through it, and had my brother who's an attorney review it as well. As long as the new homeowners pass a credit check and agree to the same terms, the contract can be transferred over to them at no cost to either and they retain the exact same $63/mo payment terms for the remainder of the contract. Some sites have mentioned concern over homeowners LTV being so tight that the additional (in this case $9k - $10k) credit requirements would be difficult to get. Not sure that will be an issue in our given area and housing market, but if it is then it's something we talk through and negotiate at the time of selling the house.

So it's possible I just got extremely lucky, but everything has passed on the contract side and the finance side of SunPower and awaiting the kickoff of getting things installed. Will certainly report back on how things go...

[scrambler]

If it does turn out to be real, then you definitely hit the jackpot