I Can't See How Leasing Doesn't Beat Purchasing, Can You?

[vinniethePVtech]

Well, I am confused by Vinnie's comments. I really haven't a clue what he's talking about. It sure doesn't sound like the prepaid lease arrangement I've chosen. I've been quoted a 6.9 kW system using Sunpower e18/230 panels for about a buck a watt prepaid lease. The same system purchased would have been close to $30,000 cause I got that quote too from the same place. Tax credits/rebates, etc would have brought it down to a bit under $15,000. That's a lot more than the prepaid lease even after the under $1000 buyout after year 6. I'm sure not waiting until January in the hope that Vinnie's pony shows up.

Vinnie it's hard for people (it appears, not just me) to understand what you're saying in half your posts. Even your better worded posts, with complete sentences like above, are one/more of these premises: 1) trust me, for this reason: (my license #, my experience, etc), 2) something obvious: <xyz entity> is trying to make money off you, or do your due diligence, and now 4) I'll share some secret knowledge with you that I'm privvy to but can't explain to you why or what's really going on. But worse yet, you only reply to a portion of a post directed to you, the part that is easiest to poke at, rather than engaging the most difficult part which is really the "meat" of the matter... that takes thought or time to explain carefully so it makes sense, that which would truly give you credibility debating/sharing your point.

I don't see what the confusion is, PPA's are a set price on selling power between the contractor and the bank. Because the units being sold on the residential level are smaller the mark up is much, much higher. Typically the rate for LABOR, and Material is increased at about a 30% margin.
Here's an example. Price out the system, tack on $3000 for a 6.4Kwh DC system and tell me what your price would be.

$3500 sunny boy inverter SMA 7000US with disconnect/combiner
$999.99 basically $1000 Sunpower E19 230 X28 (6400) watts $28,000.00 ( non authorized dealer price )
conduit and conductor $120
Breaker $40
Permit $90

PV shipment $100 freight shipping

Out the door $34850 ($5.44 per watt), suntech or yingli substitute for PV ($4.89 per watt) we will focus on sunpower PV only.
Federal tax credit $10,455
(2%) local tax credit, not in all counties ($697)

Total cost $23,698

This is a purchase price not a PPA that I sell


Now add 30% to everything material and labor and you get a new PPA price, thats how the industry sell solar on leases. what the banks and contractor are after is the Federal tax credit so in the end you the consumer pays for a system without getting the tax credit and it is a hidden cost in your price per watt.
The bank then charges extrmely high rates which I believe like my brother was given a rate of 21% so was Cebury. Horrible purchase in my opinion.

I failed to ADD MC 4 connectors 8 @ $6.36 each

[Ian S]

Seems like it's easy. I just went to the site and got a quick quote of $15,659 to purchase a 3.22kWh system, calculated to save me $78/month (almost exactly the same as Sungevity's $79/month). Same system with a $0 down 25 year lease would be $131/month, far in excess of my $105 LADWP bill and in contrast to Sungevity's $0 down $62/month 20 year deal. Of course Sunpower's quote is not binding and they want to send a person out to me. Perhaps I'll say yes. Ian, you must have been thinking about something like this when you said you can't get a quote directly from Sunpower.

In any case, that's an enormously larger bill to pay. Comparing apples to apples (except 20 years vs 25), I go from saving $16/month with Sungevity to paying $53/month with Sunpower. That seems frankly non-competitive to me.

And I don't think Sunpower is going to charge me 10% less in January due to an influx of Chinese panels. Isn't their whole business built around their own panels? Vinnie, do they, or do you think they going to, source them from China and somehow get them cheaper in a few months? Or do they use their nice panels only on the "Max" system, not their "High" system? That could explain it. But the "Max" system would tack on another $10/month. Ugh.

Franz

The purchase price doesn't sound out of line but the monthly lease sounds wacky. I mean how could you possibly sell that to someone? All the leases and salesmen I've talked to always showed numbers for a zero down lease that combined with the new electric bill added up to less than your existing bill. What about a prepaid lease - did you get a number on that? I suspect the person they would have come out is one of their dealers. Wonder if you'd do differently going through a dealer?

[Franz]

Chris wrote, very provocatively, that Vinnie's posts were like this:

1) trust me, for this reason: (my license #, my experience, etc), 2) something obvious: <xyz entity> is trying to make money off you, or do your due diligence, and now 4) I'll share some secret knowledge with you that I'm privvy to but can't explain to you why or what's really going on.

But, Chris, what was your and Vinnie's secret 3)?! If I could just know that, I'm sure I would be able to save thousands and win this giant game of energy poker!

Franz

[Ian S]

Ian, you can also buy Sunpower panels from NON Sunpower dealers. Well, maybe better said, from non-dedicated "Elite" dealers. They inflate their prices to the non-elite dealers. Three different installers offered me the choice of Sunpower OR other Chinese panels. The Sunpower only dealers prices were much, much lower. As in $1300-$1800 per kW DC lower for the exact same panels. I was told they'll sell the panels to any installers (in-turn, customers) willing to pay that higher rate.

After saying all that, was the purpose of your post trying to clarify the confusing line from vinnie.

Well, I am confused by Vinnie's comments. I really haven't a clue what he's talking about. It sure doesn't sound like the prepaid lease arrangement I've chosen. I've been quoted a 6.9 kW system using Sunpower e18/230 panels for about a buck a watt prepaid lease. The same system purchased would have been close to $30,000 cause I got that quote too from the same place. Tax credits/rebates, etc would have brought it down to a bit under $15,000. That's a lot more than the prepaid lease even after the under $1000 buyout after year 6. I'm sure not waiting until January in the hope that Vinnie's pony shows up.

[cebury]

The purpose of leasing was not to be fair. It was meant to disguise where money is to be spent and allocated for the purpose that all business parties (entities) that venture into the arrangement may profit.
As a contractor I'm highly experienced, not only in business law, but as well in project management fundamentals.
I'm asking all consumers to fo due diligence to research the true aspects of leasing to realize the investment is not worth the reward. In the end it's like possessing a vehicle worth half it's value.

Vinnie it's hard for people (it appears, not just me) to understand what you're saying in half your posts. Even your better worded posts, with complete sentences like above, are one/more of these premises: 1) trust me, for this reason: (my license #, my experience, etc), 2) something obvious: <xyz entity> is trying to make money off you, or do your due diligence, and now 4) I'll share some secret knowledge with you that I'm privvy to but can't explain to you why or what's really going on. But worse yet, you only reply to a portion of a post directed to you, the part that is easiest to poke at, rather than engaging the most difficult part which is really the "meat" of the matter... that takes thought or time to explain carefully so it makes sense, that which would truly give you credibility debating/sharing your point.

[cebury]

I just went to the Sunpower website and as far as I can tell, if you want a Sunpower system, you go through one of their dealers. So how exactly do you get a quote directly from Sunpower?

Ian, you can also buy Sunpower panels from NON Sunpower dealers. Well, maybe better said, from non-dedicated "Elite" dealers. They inflate their prices to the non-elite dealers. Three different installers offered me the choice of Sunpower OR other Chinese panels. The Sunpower only dealers prices were much, much lower. As in $1300-$1800 per kW DC lower for the exact same panels. I was told they'll sell the panels to any installers (in-turn, customers) willing to pay that higher rate.

After saying all that, was the purpose of your post trying to clarify the confusing line from vinnie.

[vinniethePVtech]

That was quintessential Vinnie-ness, right there.

Can I make any sense of it? No. Well, nothing other than that whatever I've said or been upbeat about is wrong and unfortunate.

I'd love home lessee (and purchaser) options to be better after January 1, but i don't know if my LADWP rebate is going to last that long and that rebate is a lot more than any possible 10% reduction in solar panel cost (for possibly inferior Chinese panels). If there's any other magic dust due to be scattered on residential options, I would love to know more.

Franz

The purpose of leasing was not to be fair. It was meant to disguise where money is to be spent and allocated for the purpose that all business parties (entities) that venture into the arrangement may profit.
As a contractor I'm highly experienced, not only in business law, but as well in project management fundamentals.
I'm asking all consumers to use due diligence to research the true aspects of leasing to realize the investment is not worth the reward. In the end it's like possessing a vehicle worth half it's value.

[Franz]

That was quintessential Vinnie-ness, right there.

Can I make any sense of it? No. Well, nothing other than that whatever I've said or been upbeat about is wrong and unfortunate.

I'd love home lessee (and purchaser) options to be better after January 1, but i don't know if my LADWP rebate is going to last that long and that rebate is a lot more than any possible 10% reduction in solar panel cost (for possibly inferior Chinese panels). If there's any other magic dust due to be scattered on residential options, I would love to know more.

Franz

[vinniethePVtech]

And I don't think Sunpower is going to charge me 10% less in January due to an influx of Chinese panels. Isn't their whole business built around their own panels? Vinnie, do they, or do you think they going to, source them from China and somehow get them cheaper in a few months? Or do they use their nice panels only on the "Max" system, not their "High" system? That could explain it. But the "Max" system would tack on another $10/month. Ugh.

Franz

You may believe what you want. For legal ramifications I cannot explain any further. Come January there will be changes to leasing that are more advantageous to home owners.
As of now the fact remains under lease home owners are paying per watt what the commercial sector pays. It takes industrial equipment and union labor to justify those rates.
Starting January things will change.
That is all I can tell consumers.
You can work your authorized dealers within .50 per watt, nothing to significant but it can be done.
The rates offered by authorized dealers are a cushion which are provided on commercial installation rates.
I will say no more.

[Franz]

I just went to the Sunpower website and as far as I can tell, if you want a Sunpower system, you go through one of their dealers. So how exactly do you get a quote directly from Sunpower?

Seems like it's easy. I just went to the site and got a quick quote of $15,659 to purchase a 3.22kWh system, calculated to save me $78/month (almost exactly the same as Sungevity's $79/month). Same system with a $0 down 25 year lease would be $131/month, far in excess of my $105 LADWP bill and in contrast to Sungevity's $0 down $62/month 20 year deal. Of course Sunpower's quote is not binding and they want to send a person out to me. Perhaps I'll say yes. Ian, you must have been thinking about something like this when you said you can't get a quote directly from Sunpower.

In any case, that's an enormously larger bill to pay. Comparing apples to apples (except 20 years vs 25), I go from saving $16/month with Sungevity to paying $53/month with Sunpower. That seems frankly non-competitive to me.

And I don't think Sunpower is going to charge me 10% less in January due to an influx of Chinese panels. Isn't their whole business built around their own panels? Vinnie, do they, or do you think they going to, source them from China and somehow get them cheaper in a few months? Or do they use their nice panels only on the "Max" system, not their "High" system? That could explain it. But the "Max" system would tack on another $10/month. Ugh.

Franz

[Ian S]

A sunpower authorized dealer will not quote the same as sunpower. Secondly your not understanding the secret to pricing structure.
Feel free to look up my license 937823. I consult on all levels of construction. If you want to pay higher rates under a lease thats your perogative. If you want to spend stupid money for rates that shouldnt run you higher than $5 per watt that's your perogative.
I will also Let you know starting January first the lending structure is going to change and get more more affordable because of Chinese competitors.
If you think for a moment a lease is a bargain wait until January when contractors including sunpower will charge 10% less on the cost per watt.

I just went to the Sunpower website and as far as I can tell, if you want a Sunpower system, you go through one of their dealers. So how exactly do you get a quote directly from Sunpower?

[vinniethePVtech]

A sunpower authorized dealer will not quote the same as sunpower. Secondly your not understanding the secret to pricing structure.
I consult on all levels of construction. If you want to pay higher rates under a lease thats your perogative. If you want to spend stupid money for rates that shouldnt run you higher than $5 per watt that's your perogative.
I will also Let you know starting January first the lending structure is going to change and get more more affordable because of Chinese competitors.
If you think for a moment a lease is a bargain wait until January when contractors including sunpower will charge 10% less on the cost per watt.

[cebury]

Oh I and still don't understand WTH Vinnie is talking. It starts out making sense to me, then he loses me when he jumps to conclusions and starts throwing his % figures around.

If I pay Sunpower $19k TODAY or $36k TODAY (then wait for the other 12k in tax/rebates, eq=$26k) on a product that I own in 7 years (under both options, lease or buy), WTH does decreased output have to do with anything? At year end 6, I've paid $19k vs. $26k and I own the exact same system. Any decrease / depreciation of power will be happening whether it's leased or paid and affects BOTH prices equally. There is NO payment structure based on Watts. I don't pay them per watt and there aren't PPA and not even any interest accruing. I still think he is applying what goes on his leases vs. pre-paid ones. But either way, be sure YOUR lease doesn't have those funny things built-in.

Now a vendor were trying to convince me to buy a different panel manufacturer because their panels don't degrade as fast, that's a different story. But we'd be in the same loop again if that installer then offered me two choices: buy or pre-paid lease.

Naptown is right, the gotcha I should've mentioned is those 20yr leases might try to throw in junk/old panels they can't get rid of. If the $ per watt DC (before any rebates) is over $7.00 it IS too high for CA. That is WAY too high of a cost, basically the margin between my quotes and yours is too extreme. Some people don't care, as "long as they produce that kwh". But in reality, if you priced that exact system out on a purchase from another vendor, it'd probably be much much cheaper -- if you could even find it.

Sunpower is offering the same technology, paid-up front or leased.

[Ian S]

The other issues with Sungevity are no-buyout option and a really weird prepaid-lease transfer process. While other companies have improved their offerings, Sungevity still seems to be perpetually stuck in late 2009/early 2010.

Sungevity was the first I got a quote from but, after additional quotes, didn't look so competitive even with an iPad thrown in. The prepaid is the way to go with a lease but if you really can't do that for whatever reason look for a company that will eliminate the escalator clause when you put in $500 or more up front. At least one of my quotes - I think Solarcity - had that feature.

[cebury]

The performance guarantee is a marketing gimmick. The numbers are set so low that your system would have to be severely malfunctioning to ever reach levels that low which the leasing companies are clearly counting on. The average person can't look at a 5kW system and reasonably predict production based on equipment, climate and orientation. Don't let the "production guarantee" factor into your decision one way or another.

I hate it when I don't click Submit. I had written a long post after my original and it's still sitting here. The info is now old as they have clarified the production guarantee. I DO factor the production guarantee in, but ONLY to this extent: if you are comparing against a quote from another installer that refuses to guarantee it (in California with our Solar Rights laws that force neighbors to cut or remove trees that interfere with residential solar) then avoid that installer.

But they are right, the leases will set the production lower than they know it will produce and then on years where it exceeds production, it gets "stored in acct" to offset against years where it's not.

I did not comment in the initial thread about your costs, because in my reply I was describing how you should get at least two more quotes. Two different vendors it not enough IMO. You could get two very different prices even from Sunpower Elite installers.