Sunpower system in San Diego - Good deal?

[Ian S]

I am rather anxious about anyone walking around on my roof, much less punching holes in it to install racks for solar panels, so I am scrutinizing the contract warranties and installer credentials closely. The math doesn't work out nearly as well if you end up with a leaky roof or shoddy installation. My questions and concerns are getting addressed so far though, so I will mostly likely move forward with a pre-paid Sunpower lease.

What kind of roof? My flat foam roof was in need of a recoat of the elastomeric top layer so I coordinated that work with the solar installer essentially getting the solar panel mounts/standoffs put in first then having the roofers foam and seal the mounts then coat with the elastomer. When the coating had set after a few days, the solar installers returned to put the panels on. My Sunpower lease only warrants the roof penetrations against leakage for a year; with the way I did it, the roofers warrant it for 10. Not sure if you could do a similar coordination with a pitched roof.

[sduser]

Thanks for your feedback.

My findings are pretty consistent when what both of you are saying. The pre-paid lease looks like a good deal to the consumer. Whether it's a good deal for the country given the 30% tax credit from the federal gov't plus the corporate write-off that the lessor gets is a separate discussion... Given that those incentives are in place now and they reduce the price so significantly over straight out purchase, the pre-paid lease is very attractive though. I don't know why more people aren't taking advantage of it.

I am still going through some back and forth with a couple of vendors over final price and some of the terms and conditions of the contract. I am rather anxious about anyone walking around on my roof, much less punching holes in it to install racks for solar panels, so I am scrutinizing the contract warranties and installer credentials closely. The math doesn't work out nearly as well if you end up with a leaky roof or shoddy installation. My questions and concerns are getting addressed so far though, so I will mostly likely move forward with a pre-paid Sunpower lease.

[Ian S]

Hi all, So, my questions for the experts:
- Am I missing something big here? Is this deal really as good as it looks?
- Is there any way to estimate the FMV at the 7 year mark? Has anyone gone through the process of buying out their lease for FMV? I don't think these deals have been around for 7 years yet...

Thanks for any insight you can provide.

I don't consider myself an expert but I did sign a Sunpower lease last fall here in Phoenix and they've only now begun installation. The panels and inverter are installed but they have still have to hook it all up. The Sunpower lease was the best of five that I considered last year and in spite of the snails pace of installation, I'm optimistic that I have a good product that will pay off handsomely for me. That said, the Sunpower lease IIRC has only been around for less than a year. What happens at year 7 is anyone's guess but there will be plenty of lessees before you hitting that point in time and we'll all get a chance to see what FMV is and whether those of us who got a set buyout price will actually be able to exercise it without having the IRS intervene. It's really hard to see a downside to the prepaid lease whether or not the purchase option at year 7 pans out.

If you look back last fall at some of the posts here, there was a lot of detailed discussion of prepaid lease vs purchase. The key to the prepaid advantage is as you have noticed is the MACRS available to the lessor that is NOT available to an individual homeowner who purchases the system.

[KRenn]

Hi all,

I have read through a lot of the posts on this forum and I am impressed by how much knowledge people are sharing about solar PV systems.

I am considering a Sunpower lease or buy in the San Diego area:

28 Sunpower E20/327 solar panels
2 SPR-6000m 6kW inverters
This will generate approximately 14,872 kWH per year.

Financing options I am considering:
Buy for $33,000 (this is after federal tax credit and state rebates)
Prepaid 20-year lease for $16,500

Our current electricity usage is approximately 18,000 kWH per year, so we pay a lot of high tier rates. This works out to us currently paying about $0.27 per kWH during the summer and $0.32 per kWH during the winter. It is about $5,000 per year in electricity from SDGE.

Based on my usage and the cost of the lease, I could see a full return on my investment in as little as 4-5 years. This really seems too good to be true. I understand that Sunpower can depreciate the full retail value of the system under a lease which is why they can offer it at a discount compared to the purchase price even though they must maintain and insure the system under the lease. I would prefer to not have a 20 year lease, but it wouldn't make any sense to pay the additional $16,500 to buy the system and then be on the hook for maintenance.

On a pre-paid lease, I would have the option to buy it out for FMV in 7 years, or keep the lease to the end. I'm not sure why I would want to buy it out though since I'd have to maintain it and replace the inverters when they inevitably fail during the 20 years of original lease. With the prepaid lease, they even guarantee my production every year.

So, my questions for the experts:
- Am I missing something big here? Is this deal really as good as it looks?
- Is there any way to estimate the FMV at the 7 year mark? Has anyone gone through the process of buying out their lease for FMV? I don't think these deals have been around for 7 years yet...

Thanks for any insight you can provide.

Sun power lease is absolutely legitimate and seems to be the best-priced lease out there, offering the best quality equipment, the only downside I've seen is that due to the popularity, a lot of people are reporting install delays because Sun power isn't coming up with the panels fast enough and no, there's really no way to estimate fair market value 7 years ahead of time.

[sduser]

Hi all,

I have read through a lot of the posts on this forum and I am impressed by how much knowledge people are sharing about solar PV systems.

I am considering a Sunpower lease or buy in the San Diego area:

28 Sunpower E20/327 solar panels
2 SPR-6000m 6kW inverters
This will generate approximately 14,872 kWH per year.

Financing options I am considering:
Buy for $33,000 (this is after federal tax credit and state rebates)
Prepaid 20-year lease for $16,500

Our current electricity usage is approximately 18,000 kWH per year, so we pay a lot of high tier rates. This works out to us currently paying about $0.27 per kWH during the summer and $0.32 per kWH during the winter. It is about $5,000 per year in electricity from SDGE.

Based on my usage and the cost of the lease, I could see a full return on my investment in as little as 4-5 years. This really seems too good to be true. I understand that Sunpower can depreciate the full retail value of the system under a lease which is why they can offer it at a discount compared to the purchase price even though they must maintain and insure the system under the lease. I would prefer to not have a 20 year lease, but it wouldn't make any sense to pay the additional $16,500 to buy the system and then be on the hook for maintenance.

On a pre-paid lease, I would have the option to buy it out for FMV in 7 years, or keep the lease to the end. I'm not sure why I would want to buy it out though since I'd have to maintain it and replace the inverters when they inevitably fail during the 20 years of original lease. With the prepaid lease, they even guarantee my production every year.

So, my questions for the experts:
- Am I missing something big here? Is this deal really as good as it looks?
- Is there any way to estimate the FMV at the 7 year mark? Has anyone gone through the process of buying out their lease for FMV? I don't think these deals have been around for 7 years yet...

Thanks for any insight you can provide.