Looking at pre-paid lease for solar energy system

[solarpowered]

That is an absolutely crappy deal. And one of the worst I have ever seen.
Lets say you do a 20 year lease on a 2.5KW system at $80 per month
Over the course of the lease you will have paid $19200.00 for that system
Lets say that you are getting 1.3 KWH per year per DC watt installed ( Dont know exact location or details of system to refine the output further.
So 2500 watts = 3250KWH per year
So you're paying .20 Per KWH that's a savings of $650 per year on the electric bill.
At that rate you are $350 in the hole the first year and worse as the system degrades and the esclator kicks in.
At the end of the lease counting no escalator and no system degredation you will have paid $7,000 more for the electricity.

Now compare to a purchased system
A small system will most likely be about the same up front cost of $7.00 per watt.
You will pay $17,500 for that system (you have already saved $1700.00
You can take the 30% Federal credit =$5,200.00
There may be state and utility rebates that I do not know about which you can include in your own calculations.
So as above the system has cost you net after credits $12,250
Using the same savings calculation as above the system will produce $13,000 worth of electricity.

Now comparing the two the lease is $7,750 more over the life than a purchase.

A larger system will be less costly per watt than a small one and will pay itself back much faster.

Well now you see why there is no escilated costs.

Here's the break down.

Sungevity was to offer 2.8KWH Hyundai panels with a 2.5KWH Kaco inverter (which I think is one of the cheapest and crappiest inverters to own), to equal a AC CEC of 2.28 KWH. Sungevity would lease this system at $80 per month no escalation costs. As you said, cost for that system over 20 years is $19,200. This system is crap as sungevity claims it would only offset the utility bill 60% annually. I looked into the cost of piecing together the same exact system if I was to out right purchase it. Window shopping at amazon and some warehouse outlets the cost without the tax credit was $18,980 with a contractor to put together the system, that's without the tax credit. Tax credit would be $5694. System after tax credit would cost $13,286. So over the course of 20 years sungevity makes $5914.00 in intrest, plus the $5694 tax credit, minus the $500 cash back incentive upon energizing.

Sunpower lease is $110 per month but offsets the utility bills on average by 85% annually. Uses better quality inverter and would install 3.65KWH of sunpower panels, to max out the spr-3000 inverter ( which I've been told is a sunny boy 3000US model). I can't make the cost comparison on sunpower products line as the actual cost are hush, hush. However I do know the invereter costs double that of the Kaco. Sunpower is probably making about the same on investment the sungevity is making, however the bottom line is the utility bill owning the sunpower system will remain lower longer, and overall looks like the better investment.

Solar city seemed to sway more in the direction of using micro inverter, and again like sungevity was only really looking to offset the annual cost of the utility bill by 60%.

[Naptown]

Get pricing from a local installer. They will beat the leases almost all of the time.
Are you also counting in the state utility and local rebates and credits that can make a big difference in the net cost.
Check out dsireusa.org to see what is available. remember they will also get these.

[TomB]

Suncap Lease

We are considering a suncap lease prepaid for a 6.44 kw system for $3500 one time charge for a 20 year lease. No monhtly fees or charges for the juice it creates. Can buy at market value after 20 years. This is based on Oncor paying a $2/watt rebate to suncap. I just dont see much of a downside. Due to low income I would not get any federal rebate myself, and a DIY install does not get the oncor rebate. They insure and maintain the system. Any thoughts ???

[Naptown]

We are considering a suncap lease prepaid for a 6.44 kw system for $3500 one time charge for a 20 year lease. No monhtly fees or charges for the juice it creates. Can buy at market value after 20 years. This is based on Oncor paying a $2/watt rebate to suncap. I just dont see much of a downside. Due to low income I would not get any federal rebate myself, and a DIY install does not get the oncor rebate. They insure and maintain the system. Any thoughts ???

that sounds too good to be true

[TomB]

that sounds too good to be true

Well I had the site survery, and have the lease in hand, its installed by a company "solar community" and the lease is from suncap. I think its a case of the oncor rebate, panel prices way low, the fed rebate that suncap can get, and fast depreciation.

The oncor rebate would be about 13k plus 3500 from me makes 16.5k upfront to suncap

[Naptown]

Well I had the site survery, and have the lease in hand, its installed by a company "solar community" and the lease is from suncap. I think its a case of the oncor rebate, panel prices way low, the fed rebate that suncap can get, and fast depreciation.

The oncor rebate would be about 13k plus 3500 from me makes 16.5k upfront to suncap

Good for you.

[DanBurtt]

Good deal!

Dan
If you would like to advertise contact username Jason.
Otherwise feel free to contribute to the forum.

[DanBurtt]

seriously, or do you know me and you're goofing

Dan
If you would like to advertise contact username Jason.
Otherwise feel free to contribute to the forum.

What on earth did I write that could be considered advertisement???

[Ian S]

We are considering a suncap lease prepaid for a 6.44 kw system for $3500 one time charge for a 20 year lease. No monhtly fees or charges for the juice it creates. Can buy at market value after 20 years. This is based on Oncor paying a $2/watt rebate to suncap. I just dont see much of a downside. Due to low income I would not get any federal rebate myself, and a DIY install does not get the oncor rebate. They insure and maintain the system. Any thoughts ???

The prepaid lease is probably ideal for you. Things to consider: what maintenance does the lease cover? Who insures the system against loss? What happens if you sell your house i.e. is there a buyout option if the home buyer doesn't want the lease (why of course wouldn't they) or what's required to transfer the lease to the new owner? Will they remove the system at no cost after 20 years if you no longer want it for whatever reason? What are your responsibilities under the terms of the lease to avoid defaulting? A prepaid lease can look too good to be true until you consider all the ways the lessor gets renumerated for their equipment. They get you to assign all the rebates and tax incentives to them which if you bought the system, you'd be pocketing. But what you can't get as an individual purchaser is the ability to depreciate the entire cost of the system over a very short period. That's worth big cash to the leasing company if they're set up to take maximum advantage of it.They pass on some of that to you in the form of lower upfront payment, the rest makes them more profitable.

You won't find many on this site who believe leasing can ever make sense. If you look back over the last six months of discussion, there's been a lot of back and forth on the subject. Many think you'll get screwed on the "fair market value" at year 20. I'm not so sure but it is a consideration. That potential negative is ameliorated if the lease gives you the option of having them remove it at no cost to you at that time. Anyway, if you can't make use of the federal tax credit in one or two years, then buying outright is probably not very viable. But the prepaid lease would likely be fine as long as you know and accept your 20 years of responsibilities.

[montanaman]

Getting ready to pull the trigger on a SunCap lease in Arizona

I have looked at buying out right vs a 20 year pre-paid lease. I have friends who have done it both ways. Quotes provided by a reputable local Arizona installer. Pre-paid lease for 33 Canadian Solar panels, 7.8kW system and a SMA America inverter is about 15k with all the APS rebates and Fed rebates built in. The system is guaranteed to provide 13,601 kWh in the 1st year which should cover my energy use easily ( this is a winter only home ). The system is warrantied for the duration. No additional costs ever.. IF the system gets damaged.. their problem. Cost per watt after all is said and done is 3.80 . At the end of the term its all negotiable and yes they can come and take the system if they want. I doubt that will happen but if it does.. I will worry about that then.

Cost to buy the system outright is $29,500 which includes the 2k rebate. Then I would be on my own the get the other credits and provided I do, the net cost to buy would be about 18k. The warranty is 5 years and if anything goes including the inverter its my problem. ( 3k for that) They also do not monitor the system if you buy ...but they do as a lease because they are on the hook to make sure they are generating the proper numbers. The break even point for me is about 6-7 years and then its all gravy. I am leaning towards the lease. Its just easier and 3-4 K cheaper to start. No one gets any money until system is up and running.

Thoughts..??

[KRenn]

I have looked at buying out right vs a 20 year pre-paid lease. I have friends who have done it both ways. Quotes provided by a reputable local Arizona installer. Pre-paid lease for 33 Canadian Solar panels, 7.8kW system and a SMA America inverter is about 15k with all the APS rebates and Fed rebates built in. The system is guaranteed to provide 13,601 kWh in the 1st year which should cover my energy use easily ( this is a winter only home ). The system is warrantied for the duration. No additional costs ever.. IF the system gets damaged.. their problem. Cost per watt after all is said and done is 3.80 . At the end of the term its all negotiable and yes they can come and take the system if they want. I doubt that will happen but if it does.. I will worry about that then.

That's too much for Chinese modules. You can do $3.40 a watt for American or German manufactured panels....and that is for purchase.

For a prepaid lease, for a 7.8kW you could and should be looking at $10-12k for SunPower modules or otherwise, with a Fronius or SMA inverter and turn-key installation.

Cost to buy the system outright is $29,500 which includes the 2k rebate. Then I would be on my own the get the other credits and provided I do, the net cost to buy would be about 18k. The warranty is 5 years and if anything goes including the inverter its my problem. ( 3k for that) They also do not monitor the system if you buy ...but they do as a lease because they are on the hook to make sure they are generating the proper numbers. The break even point for me is about 6-7 years and then its all gravy. I am leaning towards the lease. Its just easier and 3-4 K cheaper to start. No one gets any money until system is up and running.

Like I said, pricing for a 7.8kw(x $3.40 per watt) should be more along the lines of $26,500, not closer to $30k. Sounds like they are taking you to the cleaners.



Thoughts..??[/QUOTE]

[montanaman]

That's too much for Chinese modules. You can do $3.40 a watt for American or German manufactured panels....and that is for purchase.

For a prepaid lease, for a 7.8kW you could and should be looking at $10-12k for SunPower modules or otherwise, with a Fronius or SMA inverter and turn-key installation.




Like I said, pricing for a 7.8kw(x $3.40 per watt) should be more along the lines of $26,500, not closer to $30k. Sounds like they are taking you to the cleaners.



Thoughts..??

[/QUOTE]


Thanks.. not sure their price is negotiable unless I want to play the " get another quote game" . The rebates in AZ are dropping fast which figures into the price per watt. As far as asking for a different inverter.. I can try but that is what they are currently installing as I have 3 friends with the same set up.

All said tho would you lease or buy?


hmm.. beginning to wonder if its is worth it at all. Its about a 8 year break even point..

[KRenn]

Thanks.. not sure their price is negotiable unless I want to play the " get another quote game" . The rebates in AZ are dropping fast which figures into the price per watt. As far as asking for a different inverter.. I can try but that is what they are currently installing as I have 3 friends with the same set up.

All said tho would you lease or buy?


hmm.. beginning to wonder if its is worth it at all. Its about a 8 year break even point..[/QUOTE]




I wouldn't pay that much for Chinese modules if I can get SunPower modules for significantly less, it'll be like paying more for a Kia if you can get an equivalent Lexus for less money. If you pay $12k for an 8kW prepaid system, your ROI in Arizona would be about 6 years if utility rates don't increase.


As far as the incentives go, if you have SRP, you're screwed, if you have APS, you are fine for another month or two. Those fortunate souls with Unisource still have a $1.00 a watt left.

[montanaman]

I wouldn't pay that much for Chinese modules if I can get SunPower modules for significantly less, it'll be like paying more for a Kia if you can get an equivalent Lexus for less money. If you pay $12k for an 8kW prepaid system, your ROI in Arizona would be about 6 years if utility rates don't increase.


As far as the incentives go, if you have SRP, you're screwed, if you have APS, you are fine for another month or two. Those fortunate souls with Unisource still have a $1.00 a watt left.[/QUOTE]

Its APS and my rebate is 4900... they are dropping weekly so I need to make a move if I am going to do it. Its 15k for an 8kW prepaid and I dont think they will negotiate. The have the best reputation and there is something to be said for that..

Thanks

[KRenn]

I wouldn't pay that much for Chinese modules if I can get SunPower modules for significantly less, it'll be like paying more for a Kia if you can get an equivalent Lexus for less money. If you pay $12k for an 8kW prepaid system, your ROI in Arizona would be about 6 years if utility rates don't increase.


As far as the incentives go, if you have SRP, you're screwed, if you have APS, you are fine for another month or two. Those fortunate souls with Unisource still have a $1.00 a watt left.

Its APS and my rebate is 4900... they are dropping weekly so I need to make a move if I am going to do it. Its 15k for an 8kW prepaid and I dont think they will negotiate. The have the best reputation and there is something to be said for that..

Thanks[/QUOTE]


Who the heck told you that? Sounds like a bunch of sales talk. Here is a link to APS's site, they list the exact amt of funding available. http://www.aps.com/main/green/choice/solar/funding.html There isn't a single solar company in the area that has "the best" reputation.....there are plenty of competent installers, yours is just charging too much money, not by hundreds, but by thousands for lower-grade solar modules. The going rate in Arizona for an 8kw prepaid lease is about $12,000, in some cases less, and that's for a premium install, not Tony Two Guys and a Truck....so they're asking you for $3000 more.....because they're extra nice or funny or what??


You can get better solar modules for a much better price-point basically from someone just as, or even more competent as an installer. The other thing I would look into is what buying out the solar panels would cost you? One of the reasons I'm a big fan of the SunPower lease is because you can buy the system out and own it 100% for $1000 or less between years 6 and whatever. So even though you're doing a lease, you can end up owning the system for a total investment of about $13,000 for the most efficient solar panels on the market.


Sounds to me like this company is trying to scare you with the old "OH MY GOD, THE REBATES ARE GOING AWAY", which really isn't at all accurate. Get more quotes from APS qualified installers, there's far better pricing to be had that can knock 2-3 years off your ROI.