Too Good to Be True? I need a quick reality check for pre-paid lease from Real Goods

[mida68]

I'm about to sign and want to make sure I'm doing the right thing. Here is my quote:

#3 sounds like the best deal since I can get a family loan at 4% for the entire lease.

1) My solar-25 year lease, zero down, 2.9% escalator
a. Offers the lowest year one rate: $0.149 per kwh
i. Term matches equipment warranty
ii. Largest saving of low upfront options

2) Kilowatt Low upfront PPA-20 year PPA, zero down, 0% Escalator
a. Fixed rate of electricity for 20 years
b. Year one rate of electricity $0.195

3) Kilowatt Pre pay PPA
a. Upfront cost per system size $2.29 per Watt
b. Lowest cost of electricity: $0.068

One of my biggest concerns is if I need to sell the house in 5 to 10 years (not an unlikely scenario). With a prepaid, the owner needs to assume a $0 cost lease and only deal with any removal issues at the end of 20 years.

Here is the breakdown with costs: realgoods.gif

It's hard to believe what would normally be a $30K or so system could be on my roof for less than $15K and no other fees. Is there anything I should be wary of?

Thanks!

[russ]

Temecula area - some of us have no idea where that is - a zip code would do.

A 30,000$ system on your roof for 15,000$ - they could call it a 45,000$ if it makes you happy.

The only ones really interested in the full front cost would be the tax man as they look for excessive claims by the leasing companies.

[mida68]

Zip is 92595 if that helps. SCE is the utility. $45K would not make me happy, I'm just trying to figure out how they can do it so cheap and wondering where the "gotcha" is going to be. To follow up:

It's a 6.34 kW system which they put at a gross price of $28,665. If I pre-pay the lease, I pay $14,634 which is all-inclusive, turn key with all the guarantees. At the end of the lease they offer:

1) We will remove the system at no cost
2) You can chose to move to an annual option for to 5 years
3) Purchase the system at the Fair Market value.

I doubt we'll be here the full 20 years, I think 5-10 is more likely so I need to be careful that potential buyers not be turned off by the end of lease terms. If they will truly remove it at no cost or allow for a truly fair purchase that seems fair and attractive to a potential buyer.

Thanks!

[SoCalsolar]

It all depends on you.

Which method you choose depends on you and how long you will be in the home. This looks like a CPF (clean power finance)quote from RGs. The price of the quote looks good for a roof mounted system on tile. The production numbers look a little high(10-20%) to me. It could just be that I'm using the wrong inputs. Is the 6.34DC or AC? and what direction will the modules be facing? If it were me I would prefer them not to use Sharp panels but it kinds looks like they might be. What modules and inverter are they proposing? If it were me and I could get an in-law loan for 4% I would focus on the purchase option or the PPD lease. If I had a definite plan to be out of the house before the 20 years then I would lean towards the PPA. If I like the house, neighborhood etc enough to be there indefinitely then I would look at the purchase. After the rebates you would pay 3-4k more to purchase it and avoid any end of term issues. As a home buyer I would be prejudiced towards solar but I see an installed system with no payments as clearly a positive selling point. There isn't much meat left on this bone but if you would like me to help you get that last chunk off or if you have any other issues or questions PM me. One potential issue is the SCE rebate just dropped on Friday so that might become an issue for you unless this quote was just given today. Let us know how it turns out.

[ppreceipt]

not a good deal

you can buy a complete solar system with micro inverters for around $2.00/watt
So your 6.34kw system's material cost is around $12,600.

If you hire a construction company to install the panels and an electrician to do the wiring and file your own tax rebate forms you will save thousands off hiring a turn key company.

of course doing this is a lot easiser if you call the right company and get them to sell and design the complete system.

and you are likely to have to spend a few weeks and a lot more time and effort since you are in effect the general contractor.

good luck.

[KRenn]

Zip is 92595 if that helps. SCE is the utility. $45K would not make me happy, I'm just trying to figure out how they can do it so cheap and wondering where the "gotcha" is going to be. To follow up:

It's a 6.34 kW system which they put at a gross price of $28,665. If I pre-pay the lease, I pay $14,634 which is all-inclusive, turn key with all the guarantees. At the end of the lease they offer:

1) We will remove the system at no cost
2) You can chose to move to an annual option for to 5 years
3) Purchase the system at the Fair Market value.

I doubt we'll be here the full 20 years, I think 5-10 is more likely so I need to be careful that potential buyers not be turned off by the end of lease terms. If they will truly remove it at no cost or allow for a truly fair purchase that seems fair and attractive to a potential buyer.

Thanks!

I'm feeling motivated today, so let's get cracking.

Option A-Monthly lease w/escalator


Skip that by all means, never ever ever EVER accept an escalator on a lease, you will live to regret it as it becomes a burden on you when trying to sell the home and convince the new home-owner to take over a lease that they should be happy to have an annual increase of 2%+ every year. Either make it a flat-rate option or skip it entirely.


Option B-Prepaid Lease

You have a 6.34kw system for $14,634. That works out to a total price of $2.38 a watt for a prepaid. Not terrible, not great either.


Option C-Purchase and Finance

Take a 6.34kW system for about $30,000, subtract $10,000 for the 30% tax credit, deduct additional costs for whatever your utility rebate is, so let's say you're looking at $16,000 to $20,000 to own the system free and clear.



On all options I'd want to know what the equipment is, panels and inverters as well. I'm also confused on how they list "pre-solar" and "post-solar" cost, that doesn't allude as to whether or not it includes the cost of your lease payment in there, which I assume would be so but still the same, it helps to check.


The prepaid option looks fine, its certainly not a ripoff, even if I think you could a little better pricewise but depending on the panels and inverter it looks like a solid offering from a reputable company.

[mida68]

Went with RealGoods

I finally decided to go with Real Goods pre-paid lease. I didn't like the escalator payments either and the price was best on the pre-paid. If we do move then it won't be hard to ask a seller to assume something I've already paid for and hopefully I can add a little to the price of the house for the investment. I was able to get a family loan for 4% and will have that paid off in 7 years. That increases my cash flow right out of the gate and payments don't start until the installation begins.

With a paid system, it would take 2-3 months to install, mostly due to delays from the utility, plus the overall price would be a bit higher.

I hope this was the right way to go, the other quotes came in higher and Real Goods was willing to spend hours with me looking at my usage, identifying anomalies that made the bills unusually high the last year. All the other companies wanted the last 12 months even though I explained my usage would probably be lower moving forward.

Of course when they all came to check up on me they said they would match the quote or beat it - but I've taken up enough time trying to figure this all out. If I went through multiple counter-quotes, I would imagine some would have slipped in different sizes and materials to lower the pricing.

Let's hope they pull through and have the system installed in 90-120 days (glad winter is just starting so at least we'll be operational by spring!) I'll report back on the process!

[KRenn]

I finally decided to go with Real Goods pre-paid lease. I didn't like the escalator payments either and the price was best on the pre-paid. If we do move then it won't be hard to ask a seller to assume something I've already paid for and hopefully I can add a little to the price of the house for the investment. I was able to get a family loan for 4% and will have that paid off in 7 years. That increases my cash flow right out of the gate and payments don't start until the installation begins.

With a paid system, it would take 2-3 months to install, mostly due to delays from the utility, plus the overall price would be a bit higher.

This makes no sense at all. If anything by eschewing the purchase and going for a lease, its going to take a longer amount of time to get the system installed. Involving a third party never speeds up the process.

[rick1]

I'm feeling motivated today, so let's get cracking.

Option A-Monthly lease w/escalator


Skip that by all means, never ever ever EVER accept an escalator on a lease, you will live to regret it as it becomes a burden on you when trying to sell the home and convince the new home-owner to take over a lease that they should be happy to have an annual increase of 2%+ every year. Either make it a flat-rate option or skip it entirely.


Option B-Prepaid Lease

You have a 6.34kw system for $14,634. That works out to a total price of $2.38 a watt for a prepaid. Not terrible, not great either.

Option C-Purchase and Finance

Take a 6.34kW system for about $30,000, subtract $10,000 for the 30% tax credit, deduct additional costs for whatever your utility rebate is, so let's say you're looking at $16,000 to $20,000 to own the system free and clear.



On all options I'd want to know what the equipment is, panels and inverters as well. I'm also confused on how they list "pre-solar" and "post-solar" cost, that doesn't allude as to whether or not it includes the cost of your lease payment in there, which I assume would be so but still the same, it helps to check.


The prepaid option looks fine, its certainly not a ripoff, even if I think you could a little better pricewise but depending on the panels and inverter it looks like a solid offering from a reputable company.

30 % of $30,000.00 is $9,000.00 not $10,000.00. Not a deal breaker but multiple errors in your calculations could total a significant dollar difference. Make sure all the numbers are correct before your purchase.

[SoCalsolar]

That math was quick and dirty and not too accurate as for

That math was quick and dirty and not too accurate as for the time from sale to install the latest numbers from the CSI show RGs at 177 days to install. Maybe they have picked up the pace? RGs usually has good pricing but timely? not lately.

Top 25 Installers- California installs from, 10/18 - 10/24

Company # Installs Contract $ Avg $/CEC Avg Days/Install
1 Verengo 105 $3,137,977 $6.11 110
2 SolarCity 88 $2,500,137 $5.73 97
3 REC 41 $1,011,055 $5.68 98
4 Future Energy 29 $894,575 $8.79 31
5 Petersen-Dean 20 $396,851 $5.27 159
6 Solar West Elec. 16 $544,570 $6.18 62
7 American Solar Dir.15 $481,761 $8.61 109
8 Real Goods 13 $372,880 $6.59 177
9 Smart Home Rem.