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Secrets of Residential Solar Lease – Sweet Deal or Disastrous Rip-off?


A scam?  A rip-off? A deal of the century?  Ready or not folks, it’s here!  A solution that gives access to solar power even to the most cash strapped green minded suburbanites and… it’s brought to you by the very people who delivered us the sub-rime mortgage debacle.

It’s called a “residential solar lease” which is a “no money down” program that can get you electricity cheaper than what you cash out to PG&E on monthly basis.  Sounds familiar?

The idea is simple, instead of buying your panels by dishing out thousands of dollars upfront, you lease them for “one low monthly fee.”  You win, the solar company wins, environment is happy.

So what’s not to love?  How about a 15 year contract, a 3.9% increased payment every year and our Wall Street friends who have their fingers all over this sweet deal!? 

Let’s start from square one. On the surface, this sounds like a viable option for many home owners.  It solves an expensive problem of purchasing the panels outright for around 27,000 dollars (average 1,700 sq. foot home).

It works a bit like a car lease where home owners sign a deal that locks them in for 15 years with the option of extending their lease or buying the panels at the end of the contract.  With a solar lease, your monthly payments can be around $110 which, according to the service providers, will normally be around 15% less than your PG&E bill.  Are you sold yet?

After all, the way these companies and even our media like to paint it – it’s a no brainer deal (or a deal for brain-dead).

SolarCity, which is based right here in our backyard of Silicon Valley, is one of the very well financed operations that is the first to start aggressively market this contract for home owners all over Bay Area and western states.  SunRun is another similar co. based in San Francisco.

Who really finances these deals?  Banks on Wallstreet of course.  And there’s serious money to be made… “Investors historically expect seven percent to eight percent, which includes the tax benefits and a slice of profit during the life of the fund,” wrote Green Tech Media about the amazing profits being squeezed out of the residential solar market. “Now they want ten percent or more.” 10 percent?!  It sure reinforces how much some of these schmucks really care environment or our dirty energy crisis.

So before you jump on the band wagon, let’s look at a bigger picture and examine this “best new thing after sliced bread” from all angles:

Pros:

  1. Easy access to solar without high initial costs.
  2. With growing energy costs, this caps your electric bill for the next 15 years.
  3. Reduced monthly payment than what you would pay PG&E.

Cons:

  1. 15 year contract which is not easily transferrable if you decide to sell the house.  (According to Solar City: “If you sell your home before the end of the lease, you can transfer the lease to the new owners if they qualify with excellent credit, or you can prepay the lease and add it to your home asking price.”  That’s 700 and above FICO score.)
  2. Not for everyone.  If your electric bill does not exceed $110 this program makes no sense financially.
  3. You never own the solar panels.  In fact you will have to either return them after 15 years or purchase them from the solar company at the end of the lease.
  4. Your payments are actually going to go up 3.9% every year.
  5. You are not the one who gets the rebates for the purchase of solar panels.
  6. You maybe going off of the PG&E’s grid but you’re sure are tied into Wall Street’s grid.
  7. Many Home Owner’s Associations will not allow this.

Now at a first glance, this deal sounds very appealing but if you really look, this scheme makes no financial sense.  Why?  Because you are simply better off buying the panels by financing your payment.  You save big time this way!

Perhaps, your biggest conniption should be with the fact that it’s not you who gets the subsidies and rebates, it’s the solar company!  By paying lease payments throughout the life of the contract you become a cash cow owned by the solar company.

While they get the panels for the fraction of the cost you end up paying a full price and then some.  Doesn’t this just kill your mojo?

Here are some numbers to demonstrate this.  This scenario considers a 3.9% increase in your yearly payment throughout the 15 year term lease:

1st  Year Monthly Payment:  $110.00        Total per Year:  $1,320.00

5th Year Monthly Payment:   $128.18        Total per Year:  $1,538.16

10th Year Monthly Payment:  $155.08       Total per Year:  $1,860.96

15th Year Monthly Payment:  $187.74       Total per Year:  $2,252.88

Total Investment for the life of lease:       $26,217!

Ladies and gentlemen, $26,000 is what an average 4KW solar system would cost you today without the 40% rebates that are currently generously offered to you by the state and federal government.

Why lease when you can buy them?

It’s obvious; your best bet is to find a solar company that will give you a good price and a good payment plan.  Put a couple grand down and buy the panels yourself. Your monthly payments would still be lower than PG&E’s bill and they would stay the same till the loan is paid off.  Once you’re done with your payment plan, you OWN that panels.  When all will be said and done, your total investment will be closer to $17,000.

And if you’re strapped on cash, can not afford a down payment and that “0% down” sounds so appealing then it may be a good idea to avoid this dismal deal altogether.  We’ve seen this bank  trap before, haven’t we?I’m not against Wallstreet.  Being a Realtor, it is very clear to me that we need the banks to extend credit to qualified home buyers and keep small businesses going.  Wallstreet is an intrinsic part of this economy.  It’s just some of the financing deals that they cook up are so dangerous.  This whole solar lease hype is starting to smell like another credit bubble that’s going to enrich the banks and eventually blow up on the rest of us anyway.

I know you want to save the planet.  Me too.  But let’s not let the big boys take advantage of our sentiment.

NOTE: Folks, this post is obviously a bit dated now, however the comments you have all contributed are invaluable in understanding a full scope of your experiences with the solar lease companies. If you have a story to share with us (either cautionary or a positive one) please e-mail me directly through the “contact” section of this blog and I will share it with the community.

Further Recommended Reading:
Rooftop Solar Lease Revisited: 5 Disadvantages or the Facts Leasing Companies Don’t Want you to Know

SunGevity’s Ex Solar Lease Salesman – It’s All Smoke and Mirrors but if You Go For it Know This…

{ 148 comments… add one }

  • Wendy Hughes-Jelen January 27, 2010, 8:45 pm

    Great dissection of the program and problem! Thanks!

  • Janice Campbell January 27, 2010, 11:14 pm

    I have heard of these programs under various names. One thing I heard is that they will upgrade and replace the panels during those 15 years, if they break or if new technology invented. So they say. I imagine if you buy them, they are obsolete within a few years. New technology being developed every day. Would like to know the pros and cons of that as well.

    • ladyliza July 11, 2012, 5:34 pm

      Someone gave you a snow job. I have spoken with 5 different companies so far. None of them will upgrade your system. They are insured and of course the cost of that is buried in the pricing. The inverters are only warrantied for 10 years and their replacement is covered. If your panels are broken they are covered, but from all the research it’s difficult to break..unless it is a chinese panel. Two companies have been on shaky ground financially, SunPower and Solar City. Anyone considering this purchase should be researching how to come up with the best efficiency for the buck. The salesmen don’t tell you this. You need the factory spec sheet to figure it out so ask for it. Look at the reviews of solar panels. All of this is online.

      • John November 12, 2012, 2:19 am

        Of course they wont upgrade your system. Who is going to upgrade your system when you buy it outright? YOU!! Not the company, and if they do it is very rare and they have a great financial backing to do so. It always comes down to finances for both parties, the company and the customer. It all depends on how well the company treats its customer that gives success and longevity. Otherwise, you will only have a warranty when you buy it outright and not an upgrade. There is a big difference. Unless you have 30k dollars to spend, Solar Power leasing is best.

      • ray harrison December 9, 2012, 4:12 pm

        better check the contract of solar city. with their lease program, you can pay ythe total lease costs up front with no further payments. otherwise you finance these costs and their contract has the 3.9% cluase in it

    • John November 12, 2012, 1:20 am

      This article is bull. Not all companies have an interest rate that rises each year. Why would you want to chop down something that is positive? Some people just have no sense at all. I have been doing solar IN THE FIELD for 7 years+ and there is nothing adjustable about solar leasing, unless you go with the wrong company that has not financial backing or investment. Don’t listen to this article. It just yells ‘skepticism’. Research and you will find, truthfully, that indefinitely, most solar leasing programs will lock you in on a fix level.

      • Kenneth Sellards June 28, 2013, 2:24 am

        Call Solar city there lease does at 2.9% each year. You need to get your facts strait. I would be happy to forward you the Email the my sales person.

        • Jim June 9, 2014, 11:45 pm

          Solar city has two options, the first is a fixed rate.

          The 2nd option while initially cheaper is the one that goes up by 2.9% each year, bringing you to the same rate within a few years. A good option if you think there is a strong possibility of your moving in the near term.

          • nottru August 14, 2014, 10:15 pm

            Buying a lease is NEVER a good idea if you plan on moving in the near term. Moving may incur cancellation penalties, or the price you get for your house will be affected negatively. Do you actually think the leasing companies didn’t already think of that? They’re out there telling people their homes will be more MARKETABLE with solar panels. Nice dream! Not so in the real world!

    • John November 12, 2012, 1:49 am

      There are always going to be cons to everything you do in life. That is just reality. Its part of perfecting something. We are all still learning. Especially in this era.

      • Mitch May 13, 2014, 7:23 am

        SolarCity has a 0 down and a flat payment based on your usage average over the year. I just got a quote. Only problem it’s the same when you factor in the flat payment and APS taxes each month. My budget plan is 230 a month and now it would be 200 plus the taxes, say 30 a month is the estimate. It’s just a wash for now. Maybe with electric increases it would save in a few years. 90 percent system.

  • Jarom Feriante January 29, 2010, 12:09 am

    Great article! I often hear people comment about “emerging technologies” that are going to make today’s solar panels obsolete. What many people don’t realize is that there is a theoretical limit to the amount of energy that can be produced from sunlight. Rigid silicon absorbs about 30% of the bandwidth of light rays emitted by the sun. Today’s highest performance panels are converting close to 20% of the sun’s rays into clean electricity. Thus, theoretically, rigid silicone panels could become up 50% more efficient. A lot of experimentation is going on with materials other than silicone. However, silicone is still the top performer.

    Anyway, you don’t need a company like Solar City to guarantee your solar panels for 15 years. In fact, all panel manufacturers are required to guarantee their modules for at least 25 years to qualify for utility rebates and tax credits.

  • Tadas January 29, 2010, 12:36 am

    Ah… good insights guys and god questions too. Yesterday I also heard from a fellow USGBC member that when PG&E starts actually paying home owners for the excess power fed back into the grid that it is the solar leasing company that will get the benefit and not the home owner. Seems wrong, because technically it’s the home owner that is feeding the power back, so why should it matter whether the panels are leased or owned? It’d be interesting to find out what’s the real deal with this. Anyone knows?

    • Paul March 10, 2010, 10:48 am

      Actually there is a rental power company that does not take any “excess credits” and guarantees that the production will not be below what is contracted for.
      Also no deposits etc up front so it is a win-win-win. Rental is nothing up front, no rate increases, and no surprises. As the field widens there are better solutions out there.
      Best wishes
      Paul

    • MackSkin March 10, 2012, 3:43 am

      SolarCity has an agreement with my local power company that indicates the homeowner will receive the credit for excess power produced by the system. Another thing to consider is the cost of insuring panels you own or letting the lease company worry about that. Where i live we have hail storms…i dont want to replace panels every few years or pay insurance deductibles, etc.

  • Jamie February 10, 2010, 6:56 pm

    All,

    I’m a solar designer and work with the Sunrun PPA every day. I work for one of the leading installers in San Jose and have many very happy solar customers. I feel it’s necessary to set the record straight and get the right information to readers of sanjosegreenhome.com. Unfortunately, this article leaves out a lot of important details about the benefits of a PPA vs. a Solar Lease and lumps Sunrun in with Solar City. These two products are not the same.

    Sunrun’s PPA is a fantastic product that leverages additional incentives for solar when owned by a business, primarily accelerated depreciation on their investment in the panels. Yes, they keep the CSI rebate and the 30% tax credit, but they charge you less than if you purchased cash and kept the rebates. The PPA also provides proactive monitoring, maintenance, insurance and an extended warranty on the solar installation.

    80% of my solar customers choose this option vs. a cash purchase. That includes Engineers, CEO’s, CFO’s, VC’s, Bank Managers and everyday hardworking homeowners. Some, who have the ability to pay cash for solar, prepay the agreement and do not experience any financing charges. For those that can’t prepay, the PPA is the only reason they can afford to go solar. I’ve designed systems for low income homeowners in San Francisco that, after rebates, incentives and a PPA, were essentially free to the homeowner.

    A couple of comments to address the above:

    1 – There is no need to upgrade and / or replace solar panels until they have lived a long, productive life (usually 25-30 years). Photovoltaics degrade about .5% per year. Replacing panels while they are still working would be contrary to sustainable business practices and would ruin the financials of any solar installation. These systems should be built to last.

    2 – Usable new solar technology is unfortunately not being developed every day. We hear a lot on the news about interesting lab experiments, but the residential solar marketplace has been and is still best served by a mono-crystalline silicon based photovoltaic. This is the most efficient and cost effective way to harness the photovoltaic effect. If we are always waiting for the next greatest thing, we’ll never make forward progress!

    3 – The PPA warranty covers much more than the 25 year limited warranty provided by a solar panel manufacturer. The manufacturer is only providing a warranty for output degradation over time. The manufacturer’s warranty does not include installation, balance of system components (nuts, bolts, wires etc.) or roof damage. The PPA’s does.

    4 – The PPA company has no relationship with PG&E. The homeowner pays the PPA separately and the keeps their account with PG&E. After AB 920 goes into effect, any excess power generated by the solar installation will be sold back to PG&E by the homeowner and the homeowner will profit from that.

    Please do not view Power Purchase Agreements as a “problem”. To the contrary, they are very much part of the solution. I will not comment on the solar lease …

    Hope this helps,

    Jamie

    • Tasha August 24, 2012, 2:59 pm

      Jamie,

      I also work with SunRun’s solar PPA daily. I really appreciate your insight, as it saves me time writing a similar comment that may not have been as eloquent.

      It is disheartening how much misinformation is out there about PPAs. I think this is due to the natural psychology that “this is too good to be true.” It IS people, and there is no need to dig into the system and find ways that you are being misled. Buying and PPAs are both great ways to go solar.

      They both work to save money because the power source you are using is way closer to your home, and the overhead cost is minute compared to what PGE and other major utilities have to pay for their overhead. The key is not necessarily solar, but a concept known as “decentralized energy,” or energy produced close to the site that it is used, instead of a power plant located thousands of miles away so that is has to be transported over the old, overstressed electrical grid.

    • Kevin December 21, 2012, 8:29 pm

      Just a heads up to any customer who wants to go solar. If you are paying more than .19/khwr in the first year on a 0 down plan of any type you will end up way on the negative side of the equation in regards to solar. These guys are being sold by commissioned sales people who’s entire commission depends on the price they sell the system to you at. The price for any system with 0 down and a 2.99 escalator should fall between .16 and .19 The only exception to this is if you are doing a ground mount, reroof, rafter upgrade, structure upgrades, etc. If you are doing locked in from day 1 pricing expect to pay between .19 and .24 a unit for power. If you are doing full prepay plan expect pricing between .095/kwhr and .12/kwhr Cash pricing for ownership should be priced for a good install between 4.80 and 5.20 a watt. P.S. Quoted pricing is for the largest utility in California PG&E rates.

      • KathyK April 26, 2014, 2:50 am

        The pricing entirely depends on the local utility you are in. And what year it is.. And what state you are in.

  • Tadas February 10, 2010, 7:18 pm

    Jamie, actually this does help a lot. Thank you so much for a valuable and insightful comment. It nicely clarifies the difference between Power Purchase Agreement (PPA) and solar lease. This is what it’s all about, digging through the facts together. :-)

    • Skeptics and Cows February 26, 2010, 1:25 am

      It will be interesting to see what becomes of the financial part of these products. Case in point Solar City is offering a 15 Year Pre- Paid program on an installed 4.028KW System – Ok Rough Numbers – about 110,000KWH produced in a 15 year lease period – You pay the $8100 upfront and this covers materials, labor soup to nuts – This works out to about 7.5 cents/KWH making a number of rough assumptions (Average 5 Hours of full production – 365 days of the year) you get the picture – Now ..7.5cents/kwh is about 2.5 cents cheaper than PG&E on their baseline cost per KWH – This is GREAT! – So having paid the lease upfront – you nullify any breaking the lease agreement – you are getting the same energy for less – All you have to do is stay in the same house for long enough to recover the $8100 – For someone trading 300% over baseline kwh at 35 cents/kwh for 7.5 cents – it won’t take long – but – I’m a skeptic because salesman will tell you just about anything just to get you to sit down and invest time in something…

      • mr. optimistic March 30, 2013, 4:36 am

        this article is … well… way off. With Sunrun they pay the high upfront costs and takes care of the whole system. you only pay for electricity. your panel breaks they pay for it. you have a controlled rate. the inverter (2-3k equipment) is replaced free of charge. you just pay for electricity. soooo this author must work for PG&E :)

  • Joe March 14, 2010, 11:38 pm

    This is a fantastic article and I urge everyone that reads this to forward it to their friends or share on facebook.

    I own a solar company in The greater Sacramento area and we considered offering solar lease. After all we are competing with Solar City and on the surface the solar lease is a pretty sweet pitch. We knew that we could be competing with them frequently considering that have just secured 120 million in financing which explains the fact that I hear their radio ads dozens of times a day while driving.

    Recently we were able to get our hands on a Solar City lease proposal for a customer that we did an install for. When we sat down and did the math….well you read the article above. This program is definitely not the best value for the customer. Needless to say, we decided not to offer a lease program although the option was readily available.

    • jeremiah June 15, 2014, 6:38 am

      hey joe,

      my problem with all of this is i do want to do the right thing and get solar, because i makes sense. but when i went to apply and try i was turned down because of my credit was a few points from what they wanted. i wonder if i went the buy option would it have been easier to try to make something happen, considering i have never been turned down to buy a car and its roughly the same price as solar. i wish they were little more like car dealerships where they can find the financing for you.

  • Solar Fred March 15, 2010, 3:52 am

    Another thing that’s forgotten here is that the leasing company keeps the “green tags” or “SRECs” or “TRECs” or “RECs.” There are many names for these but they’re the same.

    Essentially, the utility is required to produce so much green energy. If they can’t produce it themselves, they’re allowed to buy a “Renewable Energy Credit” (REC) from the solar owner who is producing it. In California, that’s not a lot of money right now. For the next two years, it’s only going to be $50 per 1000 kilowatt hours (kWhs) produced. That might be 50 bucks a quarter for an average home in California. In New Jersey, it’s around %650 a year right now.

    RECs are tradeable in in NJ and many other places, so the price will vary.

    And yes, if you lease or have a PPA, the owner gets the REC cash, and the home owner is NOT the owner in a lease or a PPA.

    Bottom line, as noted above, it is always more cost effective to buy. With the new Property Accessed Clean Energy (PACE) programs coming to states, this will be better than a lease or a PPA, and you will get to own your system, get all of the above benefits of Federal tax credit, RECs, and rebate.

    For more info about PACE programs, check out the San Francisco example here.

    http://solarpowerrocks.com/san-francisco/san-francisco-picks-up-the-solar-pace/

    I actually don’t want to knock SunRun, Solar City, Sungevity, Infinergy, CT Solar Leas. (These are the lease leaders.) If you don’t want to think about solar, these guys are great. However, for that “let’s not think about it and just get it” service, you will not save (or earn over time) as much as money. The most money always goes to the person or company that takes the financial risk, and if you solar lease or solar PPA, these companies are the people fronting the cash. Again, PACE will change that dynamic, because essentially, a private bond issued through your local government will be fronting the cash, and you pay it back through a special property tax assessment on your very own property for the next 20 years at around 8% interest. If you sell your property before then, the new home owners take over the extra payments. And again, you benefit from the rebates, etc.

    One last thing. In terms of maintenance, solar has very little. Just wipe the panels down and clear off any snow or bird poop every once in a while. The inverter does typically conk out in 12 to 15 years. At today’s prices, that might cost you 1500 to replace. But in 15 years, that price might cost…. %500? Or the same. So, a solar leasing company taking care of maintenance is not a huge deal compared to your overall savings.

    At solarpowerrocks.com, we believe in transparency. Obviously. Solar is good, no matter how you slice it. If you’re lazy and don’t care about every dollar, go with the lease. If you can swing a home equity loan or PACE loan, go with that.

    • Mitchell July 26, 2014, 12:54 am

      And tell them what’s behind door number 3, you guessed it a great big lein attached to your house.

  • Paul March 24, 2010, 1:38 am

    8% x 20 years – why?

    • Solar Fred March 30, 2010, 11:03 pm

      Because unlike a bank loan, you only have to pay 8% (or whatever the prevailing rate is right now) for however many years you own the property. Again, unlike a bank loan, you sell your property, and the new owner takes over the remaining solar payment. With a bank loan, you have to pay it off. With a lease, you have to get the contract transferred to the new owner. That may or may not be easy. Also, you don’t get all of the benefits that I mentioned above: RECs, rebate, tax credit.

      Solar Fred

  • Paul March 31, 2010, 4:18 am

    With a PPA you get:

    Rebate – taken off price

    Tax Credit – taken off price up-front (I would only recommend paying cash for a system if one’s income is in a high tax bracket).

    Transfer or Buy/Sell any time – no pre payment penalties and you get to buy the system at Fair Market Value.

    REC’s – are any residential customers getting paid REC’s in Cal?

    Oh, and with a PPA, you get a new inverter when it crashes after 10 years.

    Alas, going solar is almost always a better deal than not. Personally, I see no value in owning the panels myself (although that is my case), it’s not like I get to
    sell them later.

    • Solar Fred March 31, 2010, 5:35 pm

      Paul, the inverter is warrantied for 10 years, but typically lasts 12 to 15 years. Who knows how much the replacement cost will be in 10 years, but even it’s the same as today (I’m expecting prices to be lower) you’ll still come out ahead buying, even with the replacement cost.

      TRECs/SRECs in California aren’t worth that much for the next two years, but the open market for them starts in 2013, and then look out. Remember that solar systems last 20 to 25 years, so when the market gets past its pilot phase, this is cash in the bank. Right now it’s only 50 bucks/SREC. However, look at New Jersey, where they’re currently worth around $700 per SREC. That’s a nice benefit.

      The Fair Market Value of used solar panels should be 0. Think about it. Who’s going to buy used solar panels when new ones are getting cheaper every day. There is no market for used. However, I doubt the lease contract will let you get away with paying 0. Like a car lease they set up a residual value, which you have no way to negotiate. Also, and this may have changed, but last year the contracts from SunRun and Solar City had an end of term buy out price of $1/watt at the END of the term (15 to 18 years!). That means after all of your payments, plus the 1000 to 3000 up front payment, you’ve got to buy the system at another $5,000 for a 5kW system. Not inexpensive. You could of course let them go, but if you bought, you could still be benefiting from the solar savings.

      I could go on. But let’s stop this back and fourth. Solar is good, anyway you finance it. To see if leasing, PPA’s, buying, or PACE is right for you, just get quotes for each and compare! I’ve analyzed them all, and if you can swing buying with home equity or PACE, that has the best long term return on investment. If you’re thinking short term, then yes, a lease or a PPA will save you money from day one (assuming your electric rates rise faster than 2.9% to 3.9% a year). But the savings will be much more if you buy in the long run. But like I said, don’t take my word for it. Compare them all and see for yourself.

      • David Briscoe August 7, 2012, 4:26 am

        With a few exceptions, this is a surprisingly sane 2012 discussion triggered by a 2010 article that has a tad too much sarcasm (in describing Wall Street, etc.) for my taste. The issues raised seem valid as questions if not as declarations of fact. But they appear to be mainly valid where savings are minimal. The bottom line for me, in Hawaii, where electricity costs are the highest in the nation at up to 45c/KWh, is that a PPA solar contract with Sunrun purports to save nearly 50 percent off my $400 monthly electric bill for 20 years, even with a 2.9% built-in escalation, with no other payments. My main concerns are what happens if the system becomes outdated by rapidly changing technology or government becomes more enlightened and decides to help my neighbors do the same thing for less, and what happens at the end of the lease when I’m offered the option of paying a rate only 10 percent below the prevailing rate of the electric company or a purchase of the system at an unguaranteed price. I once leased a car and regretted it at the end of the term because I didn’t own the car, but I can’t afford to finance the one-time $26,000 cost of the system and am uneasy about qualifying for the local and federal tax credits since they exceed what I pay in taxes on a fixed income. It’s not easy to get clear long-term cost comparisons. There seems to be something to the argument that letting the solar companies (and Wall Street) do the thinking might be the best alternative for joining the alternative energy movement. But I do see that it’s buying into the same kind of trust that lost me all my investment in a 2007 purchase of a rental property. In this case though, I’m not putting up cash, so the risk seems less daunting. There’s also the issue of the utility provider allowing only 15 percent solar conversions. I could be left out if I wait.

  • The Green CT Realtor April 17, 2010, 2:01 pm

    This information has been so helpful to me. Thanks to everyone for all of the insight. I am sitting here with the CT Solar Lease lease documents in my hand waiting to hear if we’ve been approved for the state incentives and am debating the details of the contract/lease. Our estimated project cost is $55860 and our only costs will be the monthly fee of $131 which remains the same for 15 years. (In reviewing our monthly electric bills of the past year, this is considerably lower than what we pay monthly.) We will also be participating in the Renewable Energy Credits program. Since we could not afford the cost of buying the equipment outright, and really wanted to go solar, I think this is our best bet in CT at the moment.

  • Solar Fred April 17, 2010, 11:58 pm

    GreenCT, you know something…. I should have made the CT solar lease as an exception to the above general leasing deals. CT Solar is actually a state sponsored program. There are income limits, depending on the area where you live for you to qualify.

    Unlike most leasing programs, YOU take care of the maintenance, which isn’t a bad thing. You also get to split the SREC income. That’s unusual, in that most leasing and PPA programs capture the entire SCREC program. There was an NREL analysis done in 2008 that showed the CT solar lease program as being as cost effective as buying.

    Once again, I’m sorry for not mentioning this program above, but it is indeed an exceptional program. Sadly, this program is no longer available, as of February 2010 because they ran out of funding. But it may come back. Check with this site for more information about the CT solar leasing program:

    http://ctsolarlease.com/

  • Jeremy April 26, 2010, 6:33 pm

    Interesting points all around. I’ve looked at SolarCity’s lease product very closely, and it seems there are some misunderstandings in the article & comments. Take a look under the hood of their SolarLease, and you’ll see that it has as many benefits if not more to purchasing outright, PACE programs, SunRun, etc.

    15 years of monitoring and services (including Performance Guarantee of system, full-coverage insurance, repairs, inverter replacement if necessary).

    Gives people with little available cash to lock in low cost of electricity.

    Work with one of the top (if not the top) solar integrator in the industry – adds peace of mind that it will be installed right.

    Transfer (if necessary) should be easy – who is buying a house that doesn’t have a 700 FICO? Even if credit is an issue for the incoming buyer, pre-paying the remainder of the lease, and putting that amount into the sale of the house is a no brainer.

    SolarCity’s lease does give homeowner the rebates and tax incentives, only it’s not a direct payment; instead those rebates are buying down the investment amount, making the overall savings fantastic with minimal up front investment.

    Their pre-pay lease option let’s customer afford electricity around $.12-15/kwh for 15 years, which is where baseline is today.

    If you can’t afford to buy a system in today’s economy, I suggest taking a closer look at SolarCity’s product. There is probably a reason that they have more solar customers than any other solar company in California.

    • Solar Fred April 26, 2010, 10:09 pm

      Jeremy, that sounds like an advertisement for solar city, not genuine and transparent information for consumers.

      I love solar and as I said, I don’t knock Solar City for charging more for a “let’s not think about it” product. They (you?) are taking the risk and capital investment, and deserve to profit more. But I think it’s an exaggeration to say that the rebates and all of the other tax incentives and RECs and everything else is fully “buying down the investment” whatever that means. It’s buying down Solar City’s investment, not the consumer’s

      Honestly, I just think it’s best to be transparent. Customers will appreciate that so much more, and I urge all solar leasing companies and PPAs to change their communications strategy, not so much their product. As with this website, the information is out there and with a little bit of research, customers will discover the half truths and be upset. You want referrals, not angry customers feeling they’ve been taken advantage of by marketing.

      Honestly wishing Solar City success,

      Solar Fred.

      • Jim April 8, 2011, 7:32 am

        Solar Fred my upfront pre-paid lease with solar city wss lower than any other offer I could get buying even with credits. I have the cash to buy outright or pre-pay lease and pre-pay lease was less including the tax credits you get when buying. It was about a $1 less a watt installed, $3 pre-paid lease compared to over $4 buying after credits. 20 year lease, no payments, after 20 years panels are mine if I am still here. Only down side is if RECs turn out to be worth more than $1 a watt at today’s money down the road? I will take that chance saving $6k now and no need to put out 30% Fed credit and wait to get back. Leasing companies benefit from depreciation, I don’t – win-win.

  • Tadas April 26, 2010, 10:23 pm

    Jeremy,

    Solar Fred is right on, that sure did sound a like big advertisement, not subtle at all :-)

    Solar City sure brags about all these customers and even if it’s true that they sell a large amount of these leased systems, that still does not make it a a great service.

    I will echo a quote used by Rob Moody in the previous post (about energy efficiency efforts that don’t work) – “Empirical evidence is absolutely necessary to support universal truths. Without the knowledge of that evidence, untruths can be repeated so much by so many people that they become “fact.”

    • ladyliza July 11, 2012, 6:16 pm

      I have been speaking to an online company who reps for Solar City. THis company brags that they are not salesmen but electrical techies who actually design the system for me and give it to solar city. They said they represented Kyocera, Sanyo, and Yingli panels. From some review sites of panels, SunPower and Sanyo are top rated for efficiency with Yingli being way at the bottom and Kyocera in the middle. So I asked for factory spec sheets so I could see the guaranteed enery output. The techie calls me back and tells me that he cannot provide them as Solar City never knows in advance which system they’ll put up until the panels arrive at my home. So now I feel that they are all a bunch of lying fools, because I’m thinking how can they sell me a system if they don’t know the dimensions and energy output of the panels in the first place? Your comments are appreciated.

      • One of THEM July 19, 2012, 1:32 am

        I work at SolarCity. Most of the PV design is done in house. I have heard rumors about consultants doing design work. What is the name of the company?

        As for the claim about not knowing what is going to be installed until it arrives, that is total bunk. In order to get a work permit, we have to submit designs to the building department that specify exactly what we plan to install. That said, the panels are frequently changed from one make/model to another for a variety of technical reasons.

  • Richard Hannay May 4, 2010, 7:22 am

    *************************ATTENTION:

    This article contains COMICALLY bad information. Tadas, you sure are a lout. Where to begin?

    You seem to object to the fact that “Wall Street” stands to gain from these solar financing deals. Ignorant populist. You are right that firms like US Bancorp are heavily leveraged in companies like SunRun and SolarCity. Would you rather have “Wall Street” make a profit off of solar electricity or PG&E make a profit selling electricity from a coal-burning plant (not to mention the coal mining profit as well as the freight profit)? Your low-brow critique of this very rudimentary and sound solar financing arrangement really demonstrates your lack of knowledge for the market society we all live in.

    Think of a solar lease as a house mortgage. Before mortgages (another basic financing arrangement intended to HELP people even though “Wall Street” stands to profit), you could either rent or pay cash for a place to live. Right now, most people “rent” their electricity. If you think it is a sound idea to rent electricity then look up the history of PG&E’s rates. As for paying cash, most people just can’t come up with that kind of dough.

    It also seems like you have some sort of visceral objection to not “owning” the system. The advantage to this is the homeowner doesn’t have liability if the system breaks. Not a bad idea considering that these panels sit on one’s rooftop.

    Here’s the bottom line: Anyone with a high enough electric bill (roughly $110 to $150 per month) will have saved considerably over the term doing a solar lease or a PPA than if they continued to buy electricity from their local utility.

    • Robert Mellody February 17, 2014, 11:01 am

      I agree with this guy. Of course, everyone would rather buy v leasing something, but that shouldn’t overshadow the fact that you are saving money per month. Owners are ok with paying utilities now, so this is just an alternative to that. Nothing down, monthly savings, you are “helping the earth!”.

      This was no different than when you moved into your first apartment. You didn’t know anything about paying for gas and electricity, but someone told you to call “X” company. They bill you monthly and didn’t require anything out of pocket, just as the lease option does. In reality, they’ve held a monopoly, solar is just trying to figure out ways to give you options.

      POSSIBLE DOWNFALL- the only negative I see from 15 year lease is if you sell our home. Transferring it to the next buyer limits your prospective market, and they also have to quality for it. However, this isn’t much different than putting any other unique design on your home, so this is a non issue for me. To be proactive, learn how your pre-payment fee would work, and maybe try and negotiate this up front.

  • Tadas May 4, 2010, 4:30 pm

    Richard, have you ever noticed when people get angry and start being offensive? It’s only when they feel weak or have some archaic belief to defend. Insightful comments are always welcome and your input is appreciated. Heck, I even enjoyed it. :-) I just doubt you will get far by going to blogs, offending the community and then presenting your own opinion. Till that changes, it’s not even worth engaging in a meaningful conversation with you. Take care.

  • steve May 12, 2010, 7:20 pm

    I offer solar leases and we guarantee a 20% savings and fixed payment. Our energy cost is extremely low so a 10kw system is only $50 per/mo. You can also buy the system for around $6 watt installed. A 10KW system would cost $60,000 the local incentive is $2 watt or $20,000 and your federal incentive would be 30% of $40,000 or $12,000 for an investment of $28,000. So how many $50 payments does it take to equal $28,000. Thats right 560 payments or 46 years and by that time you will be happy to avoid the cost of having them removed yourself. Some solar leasing is less advantageous. We are not driven by wall street or sesame street, we are driven by making america green for our future.

    • Paul May 13, 2010, 3:49 am

      Steve,

      You’ve peaked my interest. A 10kw for $50 mo. Gotta admit though, sounds too good to be true!

      • steve May 17, 2010, 8:11 pm

        Paul,

        I agree it does sound to good to be true. The reality is that companies can account several factors that homeowners cant by owning the system. We are a national company so we can average the payments over the whole country. system payments depend on local utility rates our goal is to create an initial 20% savings. We then pass the savings on to the homeowner without any annual increases or hidden costs.

  • Jack May 21, 2010, 3:41 pm

    You’re missing one part of the equation Tadas. Money saved = money saved. If someone can’t finance, (and in this environment – who can?), this this seems like the logical choice.

    When you finance a car and add up the payments you’re paying more than the price you agreed to. When you finance your house for $300,000 @ 5% you end up paying nearly $600,000!!

    Yes your home appreciates, but so does your big evil PG&E bill. By your logic you probably avoid financing anything because your mortgage and auto company would “screw” you too. Come’on, this is just another financing tool like anything else. The numbers make sense when you factor in your PG&E bill, every year for the past 6 years I’ve paid more for the same electricity. And if Prop 16 passes I can see myself paying even more.

    I work for a large bank and with perfect credit you’re still looking at 11% to 16% for an unsecured loan. Maybe if the economy weren’t in the toilet and people could find another way leasing wouldn’t make sense.

    Too bad I have too many trees for solar but I’ve looked the programs from the companies you mentioned and they’re great and help people save the money they want. Now if I could only hit the fast forward button and get a BloomBox! That is unless PG&E just buys them out and hides the technology in their vault of no return.

  • Tadas May 22, 2010, 10:27 pm

    Hi Jack, thanks for some interesting points. A few thoughts:

    >>”If someone can’t finance, (and in this environment – who can?), this seems like the logical choice.”

    This was exactly the reasoning many folks adopted when they bought their homes with sub-prime mortgages. It’s inherently short sighted and has proven to cause much financial anxiety down the road.”

    >>”When you finance your house for $300,000 @ 5% you end up paying nearly $600,000!!”

    That’s right Jack, that it is why its better to buy the system straight out but if one can’t, one should finance it and own it when it’s paid off.

    >>” By your logic you probably avoid financing anything because your mortgage and auto company would “screw” you too. Come’on, this is just another financing tool like anything else.”

    Spoken like a true banker Jack. “Finance everything! Why not! Why save and wait when you can buy and enjoy today!?” I know you’re paid to think this way so you’re forgiven… :-))) There is a reason the Western world is facing a debt crisis and people are a consuming a record number of alcohol and anti depressants. Taking out unnecessary debt produces nothing else but short term gratification and long term suffering. It’s time we learn from mistakes and adopt a broader perspective. :-) Cheers, Tadas

    • Robert Mellody February 17, 2014, 11:27 am

      Why is everyone missing the point? Yes, buying Solar is better than leasing solar, we ALL get this. However, why continue to hammer out that point? If a homeowner wants to be apart of the green movement, why should they be left out because they don’t have the ability to come up with a lump sum of money? In a way, one can argue it’s discriminatory to not find a way everyone can go green. And yes, companies like Solarcity and their investors make more through the lease than a one time purchase installment, but can’t you argue that from any business? When we go to a bar for example, we pay $11 for a greygoose cocktail even though it would cost $2 if we bought it from a store and had it at home. This is how business works, and Solarcity is just coming up with ways to get owners in the green movement. Owners already pay utility companies, so why not allow them another option on who they pay monthly?

      PS- I would like to see the 15 year lease give the ability to pre-pay down the road. An idea would put a 5 year no pre-payment allowance, but after that time, the customer can convert it to a purchase. Encumber the Lease-2-Own principles, and allow this to be done for free if they buy it from the same company. If they want to leave the company, then a prepayment figure can exist, but it would have to be within reason and get less costly as the years go on

  • Stephen in San Jose May 26, 2010, 4:37 pm

    I am a solar lease customer, that said…

    My decision was driven by a consistent known savings lease+PG&E vs just PG&E. The ability to walk away after 15 years, purchase, negotiate a new lease for the existing or new equipment. That the lessor owns and maintains the equipment. There are several purchase opportunities
    contained within the lease. I particularly liked the turnkey, zero out
    of pocket, cash flow positive from day 1 lease. Whatever it takes to get more solar roofs shouldn’t be disparaged, lease, outright purchase, power purchase agreement its all good.

  • Gregory June 29, 2010, 11:11 pm

    A solar lease program is designed to make the solar conversion to clean energy a simple and affordable way for the masses to participate in a solution to help minimize the environmental destruction, and dependence on fossil fuel driven power plants. In this economy most homeowners are just trying to get by, they want to do something to change our carbon footprint, but the investment of $25,000 and even after all the rebates and write offs they may only pay about $11,000 for the system. Then factor in the maintance and repair cost of a system, the purchase option to a new solar customer may seem a bit of a stretch. A new solar customer should have the option to test drive the technology before investing and a solar lease offers just that. Technology changes so fast these days, many of the systems being purchased today may be obsolete in 10 years, remember all of those giant cable satellite dishes, or the block sized cell phones, and I can go on and on, the point is sometimes it is better to find a way to enjoy the technology during its ‘evolution stage without having to invest the farm. The main mission is to bring the clean energy of solar to the masses with a program that will work for them now, not wait until they can afford to purchase and who cares if a homeowner buys or leases? What we desire is a clean environment, and the reduction the BP oils spills and the coal mining accidents. Ohhh, by the way there is a solar lease program that you can lease with the option to buy in six years, they have two of the best leasing programs in the nation, you can get a free solar quote and compare before you decide. Read about it: http://www.2rentsolar.com Either you are part of the problem, or part of the solution.

  • Cybordolphin July 18, 2010, 5:12 am

    Finally….. a post that brings light to this scam. What happened to the $1 a watt promise that came with this technology?? The middleman is making the prices, and you end up paying the same $4 watt. What a scam.

    I am so p.o. that the general public has not been allowed to purchase these panels outright for ourselves for the $1 per watt promise!

    Thanks for the article. I was beginning to think I was the only one out there that was seeing this for what it is. So what…. you are not paying the utility company…. INSTEAD pay on a lease to someone else???? Wake up folks.

  • Cybordolphin July 18, 2010, 7:48 am

    I think the real trajedy here is that the company SolarCity looks to be buying the panels for $1 per watt from FIRST SOLAR. So a 4kw system would cost SolarCity roughly $5000. Then SolarCity charges the customer $30,000.00 THEN collects a rebate from our government for 30% of the $30,000.00 (or $9,000.00) this is way more than the cost of the system. THEN charges the customers a 15 year lease?!! This seems almost illegal if you do the math. SolarCity is collecting more than double the cost of the system from our government in rebates, AND then charging the customer on top. How can they get away with this? And the rebate money is on a first come first serve basis…. so many legitimate homeowners may not ever get a rebate if a big company like this takes all the funds hand over fist like this. It seems this should be stopped?

    If I purchased the panels at the $1 per watt as the technology promised. A 15kw system could run my entire house (3000 square feet), and only cost me $15,000 before rebates. So like $10,000 after rebates. Instead SolarCity would charge me $117,000.00 for the same system! If we could control corporations from raping us… the entire country could afford to have their homes completely run by Solar. Not kidding. Do the math. This just does not seem right. To think I could build a home off grid and only pay $10,000.00 to have all the electricity I can use and then some… but instead I have to bow down to a scam like this…. man….

    • Steve August 21, 2011, 7:04 pm

      Solar panels are only one part of the price equation. You need to also account for installation (typically $1/W, and the inverter ($.55/W), racking ($.45/W), and the balance of system – wiring, conduit, disconnects, meters ($.25/W), as well as any overhead, warranty reserve, and profit for the installer ($1/W).

      So even if you have $1/W solar panels (which don’t exist yet for the residential market because thin film modules are very inefficient and need much more roof square footage to produce the same amount of power as more efficient crystalline panels) you are still looking at a minimum of $3.25 / W in fixed costs for the rest of the system.

      It would be helpful if everyone did a little bit of research before they started shouting on message boards.

    • One of THEM July 19, 2012, 1:36 am

      Besides Steve’s comments, SC no longer uses thin film panels.

    • Rob February 17, 2014, 11:40 am

      You are 100% correct, but name any business that doesn’t buy for a $1 and sell for $2+?

      Customers just want a way to Go Green, and even if it was $0 savings per month, this still gives customers another option on who they pay per month. Why don’t people focus on the monopoly that other utility companies have had? And why aren’t you upset at the utility companies now, as they make you pay monthly amd don’t allow you to buy it up front?

  • Cybordolphin July 18, 2010, 7:55 am

    Reality is….. China will come to us with the same technology, and then these guys will be put out of business. Unfortunately they deserve it. But what about all the lost jobs. It makes you sick.

    When China comes to us with the thin sheet panels at under $1 per watt, then we will finally be able to have electricity for our homes without paying a utility company (or put ourselves into a rediculous lease agreement-far worse). But why should it have to be that way. There are now 2 company’s here in the US with this $1 per watt technology that I know of…. and yet we only have access through a chosen corporation, who want to rape us. What a mess.

  • Jeremy Pearl July 18, 2010, 6:43 pm

    @ Cybordolphin – Your math and your understanding of financed solar is way off. Please do your homework and get your facts straight before confusing people on an informational blog/discussion about an important new option for speeding up the adoption of clean energy. You clearly have no understanding of how SolarCity structures these projects. For starters, try looking at the median cost across the top companies of an installed solar energy system – it’s typically $6-$7/watt in CA for 2010.

    Determining the true cost of installing solar is MUCH more than panels (inverter, copper wire, racking materials, engineering, permits, labor for installation, rebate paperwork, paying the humans who do all this work a livable wage, etc.). If someone is able to install solar themselves, I say “go for it”, truly! Solar finance options just make it easier for others to go forward, and overall, it will save people money (as a general rule, your electric bill in PG&E territory needs to be over about $120/month to save money from day 1).

    Yes, prices for solar are coming down, but the rebates in CA and other states are also dropping in step. Now’s as good as any time to get into solar and significantly lower one’s carbon/environmental impact AND save money.

  • Cybordolphin July 19, 2010, 6:39 am

    You must be in the business Jeremy….. no doubt. And I did my homework. I also have been in a similar business in the past so I know exactly how it works.

    And it is a scam plain and simple. And it was back when I did it as well.

    Blow the BS with regard to the cost. You know as well as anyone that if the cost to produce the panels has dropped from $3 per watt to $1 per watt, and the retail has not dropped, then folks are getting ripped off. The cost per watt to produce has gone down over 70% and yet the end user is still paying the same price they did 10 years ago. And above is exactly why.

    The problem is the end user CAN’T install the new technology themselves. Nor can the have an ethical installer do it for them either. That’s because there is ONLY ONE retailer being allowed to sell this new technology to the end user.

    Yes… the cost to have a system installed is $6-$7 per watt. That is based on the OLDER more expensive products that were on the market. BUT our point is that NOW there is a cheaper produced product out and WE ARE STILL PAYING THE $6-$7 per watt.

    Prices for Solar are NOT coming down. The cost to MANUFACTURE solar is. And that is the problem. The end user should be seeing some of that drop in cost. But they are not. AGAIN it is because ONLY ONE RETAILER is being allowed to sell the new technology that cost 1/3 the cost (instead of $3 per watt to manufacture the new technology cost less than $1 to manufacture). But the price is being held high through the lease game. The gentleman who put out this article is spot on. The only thing he did NOT touch on…. is the retail price being charged (even for cash), of the new technology being offered is the same as the old technology even though it is costing 1/3 less to produce.

    Why don’t you do your homework….. and stop looking at it from the other side of the fence.

    This company can pull the plug on your business any time. All they have to do is lose their lease game…. and cut the price of their product to HALF of what you can sell (they have the profit margin to do it), and take away all of your customers. Right now they don’t have to cut their prices… heck they can get your customers away from you just with their “ZERO DOWN…. and no cost to the customer” game. They got you either way. Good luck!

  • Cybordolphin July 19, 2010, 6:45 am

    If you want to see adoption of Solar, and “speed” up the process. Try not allowing ONE company to sell the new cheaper to produce solar, and allow the end user to purchase the cheaper technology themselves. Instead of paying $150.00 per month on a lease, OR paying a huge mark up on the product due to not having anywhere else to go…. let the consumer REALLY take advantage of the cheaper to produce technology (let them purchase from other sources). And let THEM get their rebate. YOU do the math. If I could purchase the product for a fair price of $2 per watt (installed), then I could have a 15kw system for near $10,000.00 after rebates and pay off in 4-5 years without paying more than my current electric bill to do so. NOT the $68,000.00 the above company wants to charge me, and THAT is going to get solar on a lot more homes than this BS. And you know it.

  • Cybordolphin July 19, 2010, 6:57 am

    Some more math for you Jeremy…. The manufacture cost of the solar (less than $1 per watt now), is supposed to account for less than 1/2 of the total installation cost. Wrap your head around that. Even at $3 per watt installed…. the end user would be far ahead of the game written about in this article. And $3 per watt installed is quite possible. That you also know if you are in the industry. The consumer is getting scr*wed and you know it.

    Let the customer have the option of buying for cash at an acceptable markup ($3 per watt installed), and get their OWN rebate. That will get solar on everyone’s xmas list. And solar would REALLY take off. America could have solar on every home. And lead the world in rollout of solar. But like with this plan…. it cannot happen. It is STILL strapping the consumer to a monthly payment (15 YEARS!), and for no reason…… other than greed.

    People are not all stupid. Granted enough are to make it work for the above company. But not forever.

    The new technology being sold above is a sub $1 per watt to manufacture technology. This is fantastic, and never acheived before. It acheives the GRID PARITY. The problem is the end user is not able to appreciate/take advantage of the breakthrough. And again the article explains why.

  • Jeremy Pearl July 19, 2010, 3:26 pm

    CyborDolphin, it’s really a shame that you have to confuse your ideas and wishes and hopes for the solar industry with a bunch of inaccurate assumptions and misnomers. I’m not quite sure what your angle here is, as it seems that you’re trying to dissuade people from going solar – interesting perspective for a solar blog/discussion.

    At any rate, anyone who looks at the cost of solar from 2005-2010 will see a 40% reduction in the cost to the consumer. Yup, there is one solar company who can manufacture solar at $1/watt, and yup, they too mark up the cost to all of the installers/integrators who sell that product.

    I’m not going to take your math apart step-by-step, b/c I’m going to go to work and help people save money over the utility cost of electricity. Yes, I work in the solar industry, and it’s because of my years of dedicated work that I understand the details and misdirections you are feeding people. I encourage the readers here to look under the hood of your assumptions and see the mistakes/omissions you are making.

    I wish a new house cost $100,000 in the Bay Area, and I wish that the new electric cars coming out would start at $10,000. I wish solar was affordable for everyone by now. The truth is, that technology is driven by many things including people, materials, and yes profit. Most people in the solar industry are barely making a living. Most solar companies are struggling to stay in business with today’s prices at $6/watt installed-residential-solar. The solar companies are not abusive to customers, and solar leases are not venomous like you make them out to be. Get your facts straight. Learn more about how business works and what’s really behind a construction project like solar. It’s not all cupcakes and party hats and hand over fist profits in the solar industry like you seem to paint it out to be.

    • jerseyjaneyjoe July 13, 2011, 1:58 pm

      thank you Jeremy! I see a lease, in my hand now, that is viable savings for many homeowners.of particular interest to seniors who would not benefit from investing in purchasing the panels outright, and the lease payments never increases. i see some commentary no longer relevant due to new products (leases) available.

  • Morris July 19, 2010, 5:20 pm

    Does anyone else think the math in the article is skewed? With all due respect “Tadas” you are not accounting for the time value of money. You must adjust the total lifetime adjustment back to “year zero” to really compare a lump-sum upfront payment to the total cost of leasing over the 15 year life. Only then can you really relate the 2 costs. If there is a difference between the numbers, that’s when you can analyze which option is more cost effective.

  • Cybordolphin July 19, 2010, 10:57 pm

    Jeremy….

    Are you seriously saying that the method the above company is bringing solar to a home is ethical?

    Please simply respond. It will quickly answer my questioning of your motive.

    If you honestly wanted to see solar on every home in America…. without creating a hidden burden for American’s, you cannot back the above solution of entering millions of homeowner’s into a 15 year lease to do so.

    Shame on you for attacking my math or my integrity here. Those truly interested in Solar becoming mainstream to the US, can see this is not the way. This way is simply lininig a companies pocket (a greedy company at that).

    SolarCity quotes $30,000.00 for a 4 kw system. My example of a 15kw system would be roughly 4x that on the outside. So give them some credit…. and go with my lower figure. Bottom line is if I had access to the technology other than going through the above company…. I could realistically install the 15kw system for roughly $10,000.00 after I collected my OWN rebates. And I could realistically pay the 10,000.00 over 5 years paying the same amount as my current electric bill.

    To overinflate the price of a new technology, then collect rebates on those inflated prices, and then turn around and strap American homeowner’s with a 15 year lease…. is outrageous. Clearly.

    There is no real good reason the general public should not be able to use the new technology (being afforded only to Solar City), and install solar on their home for $3 per watt. And you know that.

    And yes….. in this case Solar City is wearing party hats.

    YOU of all people being in the industry (unless you work for SolarCity), should be quaking in your boots. This company could put you out of business in a heartbeat if you think this through. All that has to happen is they lose their lease program…. or rebates go away (they lose their cash cow), and their prices will be slashed to put you right out of business. You can’t compete. I certainly hope you get that.

    If you are in the industry. And you truly are in it for the right reasons. You cannot support the above as being a real solution that truly benefits the consumer.

    Let a company like you have the technology. Let a company like you install the technology at a fair price (you could install the new technology for $3 per watt and maintain the same profits you maintain currently). Remember…. First Solar is now able to produce the product for 70% less than just a few years ago. So instead of costing $3 per watt to manufacture, it is only costing them UNDER $1 per watt now to manufacture this new technology. If you maintain business as usual you can then install a system for half of your quoted $6/watt installed-residential-solar ($3 per watt). Certainly you would not/cannot argue this.

    Why would you support Solar being offered to the public in such a cost burdening manner as above. Folks cannot afford their utilities as it is. Nor can they afford to pay a 15 year lease saving a mere $10 per month doing so. It is a pathetic program designed to keep profit as high as possible for the company offering it. And that you know to be true.

    While you can support the free market and a company making profit. It should not be at the expense of collecting rebates on an installation inflated just to the point of being under the wire of unacceptable, strapping a homeowner into a 15 year lease, or charging for a technology double because “you can”. Further you cannot be in support of ONE retailer being allowed to roll out a new technology. If the time comes the company loses their lease program, and then slashes the price of this new technology to half of their current pricing (the price the technology SHOULD be offered at in the first place), some would refer to this as a monopoly. And that certainly you cannot support. Especially if you are “in the business”. You should have access to the technology that has attained “Grid Parity”, just like the company offering the 15 year lease program.

    The above offering simply is holding the price of this new technology high. And doing it by playing on poor judgement (human nature to some), by hiding it in a 15 year lease NO MONEY DOWN, ZERO OUT OF POCKET, AND SAVE!

  • Tim July 27, 2010, 6:43 pm

    There is a middle option between purchasing and leasing solar that never gets discussed (unless I missed it) in the endless bashing of $0 down leases: a prepaid lease. Both SolarCity and Sungevity offer a prepaid leases that costs significantly less that both purchasing and a no down lease.

    In our situation, we’ll make one upfront payment and we’re done. The payment will cost roughly third of what it would be to buy a system outright or lease it for $0 down. This also removes any uncertainties if we were to sell the house. Over the 20-year lease we’ll save about $15,000. Sure, we could save more about $23,000 (according to one estimate we received) if we purchased the system. But purchasing would be many years away for us. We can prepay now. Why put off the possibility of saving $23,000 sometime in the unknown future, when we could start saving $15,000 now?

    Maybe it’s not completely ideal, but it’s the best we can do. And certainly seems better than doing nothing.

    According to one of the sales people we talked to, about 20% of their customers prepay. So, some people are figuring this out.

  • Jmandlx August 10, 2010, 7:15 am

    I find it interesting that you fail to mention that these customers already have an infinite power purchase agreement with PG&E. The only difference is that one never knows what PG&E is going to charge from year to year. Historically, PG&E’s escalators have been much higher than 3% since their filing bankruptcy in 2001. You paint a idealistic picture that obtaining a loan from a bank to purchase solar panels is easy these days. Most homes don’t even have the equity in them to secure a loan with a bank. Sure there are some banks offering solar loans but they average a 7.5% interest rate. This interest easily offsets any sort of savings realized by the solar panels. Finally, you also fail to mention the cost savings benefit realized by the customer by not having to maintain, insure, or monitor their system. The output is even guaranteed. These programs make it possible for customers to have an alternative to PG&E. These companies are just like utility providers except you actually know what your bill is going to be every year for the next 15 years +.

    • Marin April 20, 2011, 4:57 pm

      Very good point. Also ,, leasing option is ideal for “older” homeowners, who dont want to put out the cash up front, be involved with maintenance issues

      • Dr scott levy,, california June 23, 2011, 2:44 pm

        STAY AWAY from these clowns.. I know,,,,,What mantainance? You are getting ripped off,,,, WAIT 2 years,,,,,a system will cost you for 2kw about 14K installed,,, AND youl own it!

  • TonyStewart September 9, 2010, 11:29 pm

    This is the letter sent to SureTempManufacturing in Fort Myers Florida for our proposed lease.

    My wife & I reviewed the lease, very eye opening to say the least

    My home is very efficient. Our new A/C’s and Solar Water Heaters, have taken us from 100 to 65 kwh per day. New Energy efficient Kitchen Appliances & CFL lighting can reduce this further
    Our bills have dramatically decreased from averaging $300 to this august being $215.35 Total

    Our goal has been from the beginning to reduce our costs. PV CAN do that.
    A starting cost of $259 a month in year 1, ends up to be $442.50 in year 15 for a total of $62,771.20 That seems exorbitant for a system that still is not ours.
    Then if I did buy it would I get the tax credit? No. You get the 30% tax credit & your company will probably make extra money by selling emissions allowances to fossil-fuel industry that the PV system will offset. I know I would.
    $259 a month for a perfect scenario 35 kwh per day still leaves me with a 50% FPL bill at .085 cents a KWH to pay.
    That equates to $259 STM + 95.50 FPL = $354.50 or a monthly overpayment of $139.15 based on August(Hot Month) $215.35 bill. This overpayment would continue to increase with your 3.9% annual increase & FPL’s 7.8% annual increase. Where is the value in this system? I have reviewed contracts from California, Arizona & Texas these past 2 days and am shocked as to what is available in price & performance guarantees that STM does not address. And now with the social media addressing these issues the truth is there for all to see.
    Your website examples show the consumer saving money. How am I saving money?
    I for one suffered during 3 hurricanes just as you did with Charlie. Florida Plunder & Loot FPL was not prepared
    Seeing FPL not maintain the infrastructure, accessing a storm charge to please stockholders and the lies they perpetuate about supporting alternative energy sources makes me even more interested in a PV system to offset their false claims. Your website and this contract contradict themselves. I hope this isn’t a last ditch effort (home run) to help Evergreen Solar in Massachusetts stay alive by selling their products. Penny stock & wasting government subsidies are becoming all too common with Evergreen.

    Mr Griffin, Now that you know my thoughts, is there a system that will save me money on my electric bill and earn you money to support your business. I hope so for all our sakes.

    Thank you for your time

  • Dr scott levy, california June 8, 2011, 12:26 am

    DONT BE FOOLED BY THEse scum companies! Solar city , states on thier site that they have recieved Millions of dollars from PG+E, and chase banks to fund their little bs scheem…. HOW DARE YOU CALL YOURSELFS ECO FRIENDLY solar city!!!!!!!! You are the scum of the world,,,, DIRTY DIRTY MONEY!! lets see pg+e is a quality green company… NOT
    chase is so much better NOT… so get over it solar city!!!!! YOU SUCK; YOU ARE NOT A ECO COMPANY AT ALL…, Just trying to make a quick buck while the fire is hot… And by taking this dirty money to stay affloat, Then what,, sell out to PG+E? YEP.. sound familiar doesnt it california… ANd the employes they have are CLUELESS about this scheem!!! Grow up kids,,, Your not green, Just dirty,,,, I say,, GO AWAY,, you are just as bad as WHOLE FOODS, and there pro gmo foods donations,,,, SCUM!!

    • One of THEM July 19, 2012, 1:39 am

      Calm down, bro.

  • Dr scott levy,, california June 23, 2011, 2:40 pm

    The sales personel at solar city are clueless about ECO green SOLUTIONS..They are a bunch of kids, who are clueless about the the company they work for.They get payed VERY low wages, and make there real money off of sales comp…SOLAR CITY IS NOT GREEN, JUST GREEDY!, and will do anything so they can build there company for a quick sale in the next 10 years to???? PGE???? Chase bank????? So you see,,, this funded company by US the taxpayers bailout money is scamming its customers… The price of systems has dropped 30% in 1 year here in california.. Just wait ,, In 5 years solar WILL be VERY affordable to all who want it for CHEAP, while these stupid folks who are stuck in a 15 year lease,, are screwed!!Just wait… Remember when computers were REAL expensive?your 2500 system is now worth 10 dollars, in scrap,,,,, SO AVOID AVOID AVOID,,,,, CALIFORNIANS AGAINST SOLAR CITY… GET OUT OF CALI… you are not eco,,, Just Greedy!

  • Cybordolphin July 6, 2011, 8:37 pm

    Unfortunately Dr. Scott Levy…. we will likely never actually see systems priced WAY below todays prices…. although the system prices should indeed be slashed. This is due to as you noted…. GREED. A sham will be explored and implemented to keep the prices high. Just as the above “zero out of pocket” scheme above.

    The cost to manufacture 1 watt of solar power is now down to around $.20 per watt. Thats right folks. $.20 per watt (20 cents per watt). This means that the price of a system should be affordable for just about EVERY homeowner, without a 15 year lease or ANY lease.
    The cost of the unit would be FAR less than even a current monthly electric bill.

    Everyone needs to ask the quesion and look into this as I have.

    “WHY AM I STILL BEING GOUGED INTO PAYING OLD TECHNOLOGY PRICES”?

    We should all be able to have a new system installed for $3 per watt or less. Without putting the industry (installers) out of business.

    • Dr scott levy,, california July 16, 2011, 4:56 pm

      We alread are. and I believe you are wrong,,,,MArk my word,,5 years from now,,,, 3 kw system,,, uninstalled 5 k,,,, I know,,,

  • Cybordolphin July 6, 2011, 8:47 pm

    TonyStewart…

    There actually is a system that would save you money. Lots of money.

    Look up “thin film solar technology”. Don’t be misslead by the old technology being called “thin film”. It is not the same.

    There is now a product only being sold to the government, Germany and the BIG utility companies. This product is actually “printed” onto a special film. This film can be applied directly onto roof shingles, etc.. The applications are almost limitless.

    However… again the product is only being released to government, BIG utility companies, and ONE single residential retailer here in America. This is wrong. Very wrong. This is exactly why we are not able to take advantage of the new technology being manufactured at only .20 per watt (almost unbelievable).

    Research carefully folks…. and start demanding answers.

    There is NO reason everyone should not have affordable solar made available to them. And it should not be from ONE retailer and tied to a rediculous lease program.

  • Dr scott levy,, california July 16, 2011, 4:44 pm

    My neighbor installed 3 kw system for 10K,, It works perfectly,,, And he is now saving up for the New wet batteries comming out,, for here in nor cal, pge as per sb32, does NOT ,,,, I repeat,, DOES NOT have to by law give a penny BAck to systems under 1 Mw…. GO AWAY SOLAR CITY!! You are not eco friendly,, JUST GREEDY, with your 1 billion dollar of WALL street investors…. YUK!!!!

  • Ian S July 21, 2011, 8:42 pm

    Interesting discussion if a bit vitriolic. I’m currently looking at solar PV for my home in Phoenix. I have no pre-conceived notions regarding the various means of financing so have an open mind in that respect. Here in Phoenix, I can get a decent quality residential system installed on my flat roof for maybe $5/watt before incentives. For a 7.76 KW system that’s about $38.8K. Currently, my utility, APS, provides a $1/watt rebate so net cost is $31.0K. Federal tax credit of 30% is another $9.3K bringing the cost down to $21.7K. Arizona has its own tax credit of $1K so after all is said and done the system costs me about $20.7K.

    Now what about leasing? Well, I do have some funds available to put into this up front so I don’t need to do the zero down leasing approach. What I have more seriously looked into is a “prepaid lease” where your upfront payment is enough such that you have no monthly payments to the leasing company. All three of the vendors I’ve got quotes from offer everything from zero down through partial prepay through full prepay. So what would full prepay look like for the 7.76KW system? I’ll go with SolarCity since they have borne the brunt of the attacks here. For a prepaid 20 year lease, I would have to pay upfront $11,687. That includes 20 years of monitoring, 20 years of covering any repair including inverter, insurance against damage or theft and a performance guarantee. Of course, at the end of 20 years, I still don’t own the system. But I will have the choice of upgrading the system at additional cost, removal of the system at no cost to me, a lease renewal, or possibly a purchase of the system for some nominal fee. In the latter instance, I should be able to drive a pretty good bargain as 1) they won’t want to pay to have it removed and 2) a 20 year old solar system is bound to be virtually worthless for resale.

    Am I likely to be in the house at that time? Maybe not. But the lease is transferable to a new owner, and because there are no monthly lease payments, the new owner will be happy to have a dramatically reduced electric bill at no cost to him for the remainder of the lease and that should enhance the value of my home.

    So pay an extra $9K up front for the privilege of eventually owning a twenty year old solar PV system? Explain to me again why I should buy.

    • mary January 19, 2013, 4:47 am

      at a loss of 1/2 to 1 watt per year. 260w mono panel minus 20w over 20 years is not much. i would say that your leased system may be worth more then you think. the lease company would not put in writing to buy it cheaper that take off my roof. why is that?

  • Cybordolphin July 22, 2011, 7:34 pm

    Ian… the thing is… that your $5 per watt system should only run you around $7000 installed. Not $38,000. And the installer here in the US is the one collecting your rebate. Not you. So they reap (wanted to use another word). The installer is collecting a rebate from our government based on a highly inflated cost. In otherwords, after the rebate is paid to this company…. based on the overinflated cost….. the company is making pure profit. They are making far more than the actual cost of the system BEFORE the lease game even begins! The cost for the new thin film technology (THIS IS NOT THIN PANEL TECHNOLOGY), is down to around .25 per watt (25 cents). What you SHOULD be buying IS NOT the system you have looked into. What you SHOULD be buying/able to buy is the NEW technology “THIN FILM”. This is available (but only to the government, lare utility companies, and ONE (1) retailer here in the US. You unfortunately are not being offered the newest technology. And the answer would be “YES” you SHOULD buy (or be able to) a COMPLETE supply solar system for your home for $7,000 or less. Not a penny more and with no lease game. The battery technology is also here to do so without having a HUGE bank of batteries to store the energy.

    • Ian S July 23, 2011, 12:51 am

      Where do I sign up Cyberdolphin? I’m serious: please tell me the company in Phoenix who will install a turnkey 7.76 kW system for $7000 after rebate/tax credits. I’ll call them Monday.

      • Andy C August 29, 2011, 10:12 pm

        Ian….depending on your roof, we can install systems in the high $3 range right now. Sharp, SMA….you name it. That put you $2.60-$2.80 per watt OOP with APS. We would be close to $10k.

  • Banker Scott August 27, 2011, 4:09 pm

    I get soooo tired of everyone blaming the problems of the world on “bankers”, and it seems solar power is another place to bash. In case you people forgot, the terrorists tried and succeeded in killing many bankers (along with hosts of other people on 9/11), so I
    suggest you join up with them and do some real good in the world, they seem to have figured out along with you that killing bankers is the only way to go.

    In all seriousness, the solar lease is just one of many options. Of course financing anything is more expensive than buying it outright, that should be obvious. The solar lease drives a lower cost of financing by transferring the tax benefits and credits of solar installation to an investor who can use the benefits. And remember folks its not just the 30% tax credit they get, they also are allowed to take 5 Yr MACRS depreciation plus bonus depreciation (which you can not use if you buy the panels) as well as any interest expense deduction on debt used to finance the panels (which you can use too if you finance the panels using a home equity line of credit and itemized deductions). If you are a cash strapped consumer and want to go solar the first choice would probably be the home equity line, but the closing costs, high rates, limited equity and even more limited availability of the product make this a not so viable option right now. Which is why the lease makes sense.

    In any scenario your actual savings are minimal, even if you own the panels (ie $20-$40 a month on avg). Solar power is not economically feasible, the only reason it sort of works is the huge incentives that the government allows (which are available to both individual consumers and corporations).

    The fact that you can go solar and be cash flow positive (either buy, borrow or lease) is significant for folks that just want to do some good (this has not historically been the case). I am looking to install panels on my roof and I am going to explore all the options, but I can tell you I’m not doing it to get rich, I just want to be “greener”.

    And as always your other option is to do nothing, and between leasing and nothing I think I’ll take leasing.

    • Rob February 17, 2014, 12:05 pm

      Exactly, some people just want to Go Green. Its not about the monthly savings, though that is a plus, its just allowing another option against using the normal utility company.
      If a lease wasn’t available, it wouldn’t allow lower income families this chance, and that is almost discrimatory. If an option exists, allow owners to make the decision!!

      PS- all the debate of the solar companies making profit, isn’t all business designed for profit? Buy for $1 sell for $2.

  • Robert Eco Green October 18, 2011, 9:30 pm

    From the beginning of the article, even before the pros and cons were listed, I felt very dubious about this kind of scheme. I think the thing that got me was the 15 year loan. That’s a really long time to be “locked in” to a certain amount of monthly payments. Then, when I found out you don’t get to keep them, unless you buy them at the end of the 15 years, it made me think “what a waste of money!” I think someone else in the comments also brought up the question of what happens if new, better technology comes up? This is a really important consideration – in the world of technology, 15 years is a long time.

  • Peter November 2, 2011, 5:28 pm

    Unfortunately, the author of this article doesn’t have some of his facts straight. If you currently have service for your electricity with a provider and elect to have a PV system installed (lease or purchase), you’re not removing yourself from the utility grid. When the power goes off, your power will go off too.

    With respect to HOA’s not allowing PV, I suggest you read the solar rights act.

    And for all the negative comments about leases, it’s far better to lease than do nothing at all! You fail to mention the amount of carbon reduction benefits over the life of the system, let alone the reduction in blackout/brownout risk we all face when utility grids are strained.

    • Tadas November 3, 2011, 8:07 pm

      Hi Peter, thanks for your insights. I suppose the way it was written it can sound as if one would be going “off the grid” with solar lease but it was more of a figurative speech. You are indeed correct, you’d still be hooked to the grid, in fact selling energy back to PG&E when you have a surplus.
      When it comes to HOAs, yes indeed the Solar Rights Act, prohibits “restrictions relating to solar energy systems contained in the governing documents of a common interest development” but its easier said than done, especially when you share a roof with other neighbors. It’s an interesting issue though, I’ll have to do more digging.
      I respectfully disagree with your last point though. It is NOT better to “lease than do nothing at all” because you’re better off financing the solar system of your own (if you can’t buy it with cash) or conserving energy in other fashion. In my mind, solar leases are only acquired by people who do not take time to do proper homework.

  • Ian S November 3, 2011, 8:48 pm

    With all due respect, I think you need to revisit your antipathy towards leasing especially focusing on the prepaid variety. I have recently signed a contract for such a lease from Sunpower using Sunpower panels through one of their local distributors. I get a complete 6.9 kW installation all for one payment of ~$6.7K. I get all the benefit of the electricity produced for the full 20 years of the lease. They also will make any system repairs including inverter over that time period. There are no monthly payments, no escalator clauses. If I sell the house, the new owner can take over the lease or I can purchase the system for a pre-determined price. After 20 years, I can purchase the system for fair market value or instruct the lessor to remove the system and repair the roof penetrations at no cost to me. According to the contract, they have ten days in which to do so or else the ownership of the system passes in full to me.

    There is one more important feature: in year 7, I have a one time contractual opportunity to purchase the system for $850. I then own it but no longer have the service/repairs. Manufacturers’ warranties would be transferred.

    There is simply no way that I would be better off purchasing this system which would have an after-incentive/tax breaks cost of around $15K.

    • Tadas November 6, 2011, 2:13 am

      Hi Ian,

      Thanks for your comment. This sounds like a better program than what the ones I had previously researched. Perhaps the advantages or disadvantages of a solar lease depends on the company providing the service.

      Couple of questions. 1. What is the pre-determined price to purchase the system if you have to sell the house prior to the 20 year lease is over? 2. Did you really mean you can buy the system for $850 after 7 years? Sounds too good to be true.

      • Ian S November 6, 2011, 3:23 am

        Hi Tadas,

        The predetermined price varies depending on the year. As I said, in year seven the price is lowest at $850. Also year seven is the only year you can opt to purchase the system without a house sale. Before and after year seven, if you sell your home AND the buyer does not want to agree to the lease terms (I don’t know why they wouldn’t with a prepaid lease), then you have a purchase price that varies by year. Year one the price is $27K which drops rapidly to the $850 in year seven. After year seven, the price increases on a fairly straight line to about $5800 in year 20. Presumably, they want to recoup their maintenance costs if you end the lease early. Now you certainly wouldn’t want to do the house sale with buyout during the first few years. So if there’s a chance you’d be moving in that timeframe, you might want to forgo the lease and probably even an outright purchase. In fact, that year seven is a real incentive to purchase and I think that’s the intent as the lessor has already made their profit and by getting rid of the system, eliminates the long term maintenance liability. After year 20, the question becomes what is the fair market value? Might it be around $6K (year 20 value)? Maybe, maybe not but you can always have them remove the system, something I’m sure they won’t really want to do. It might actually be a reasonable thing to do as there may be far better systems by that time not to mention that it may be an appropriate time for the roof to be replaced.

        It may sound too good to be true until you realize that in addition to all the usual incentives that an individual purchaser gets, the lessor gets MACRS depreciation writeoff within a few years. That is based on the full purchase price of $30K and so can amount to perhaps $10K or more in the right tax circumstances.

        As for me, I’m not sure what I’ll do come year seven but at least I have some time to think about it.

    • Carol November 21, 2011, 4:44 pm

      Who did you make this agreement with, Ian? I just got a quote for Sun Power panels from Sun Logic and the prepaid lease was $11253 for a 3220 kwh system. It sounds like you got a good deal.

      • Ian S November 21, 2011, 8:42 pm

        Hi Carol. Not sure where you are located but a lot depends on what rebates and incentives there are. Here in Phoenix, my prepaid lease payment reflects an APS utility rebate of $6,900 and a state tax credit of $1,000. Then there is the federal incentive for the lessor of 30%. The latter ends at the end of December or at least changes into something a bit less generous. In any event, Perfect Power is the local firm I went with. They are one of two elite Sunpower dealers in the area.

      • Ian S November 21, 2011, 8:44 pm

        I forgot to mention that APS has run out of rebate funds for this year. I suspect their rebates next year won’t be as generous. I may have hit the sweet spot in timing. ;)

  • Solar Broker Jennifer November 20, 2011, 12:05 am

    Wheeew!

    I’d say there more anger and speculation here, than definitive answers. And while speculation is great, as it leads to a distillation of reasoning, it nevertheless lacks critical thinking on how to resolve the debate. That is, “how are we going to argue about the pros and cons of solar leases?

    Although this blog debate is great for getting varied perspectives from many, I left feeling more confused than ever, but even more determined on how to “critically debate” the solar lease issue.

    What seems to be missing from the debate are the opinions of impartial EXPERTS! That is, Energy Consultants who do nothing but scrutinize energy production and finance schemes; it’s their job! Yet, I could not detect a single commentary by an identified expert energy consultant or a certified accountant, except for one lone banker, who seemed to be the ONLY outside voice of reason in taking a subjective look at the debate from a macro view called simple accounting finance. Still, not a peep about cash-flow, internal rate of return, return on investment, or payback had been spoken. Folks, let’s settle this. It’s not rocket science; it’ called “math”. Is there third party verifier in the house?

    Questions I’d Ask The Solar PV Universe About Vetting True Value:

    Cash:

    Can you make more with your money in an investment of any kind? Albeit, some people may see solar PV as in investment if it saves money off the monthly utility bill, but at what percent? For example, what if you have an astute investment adviser who can make your money 5%, 6%, 7% or more in a well managed investment? I have a friend who is a bond fund manager and he’s making his clients 10%, 15% to 20% in his investment vehicles. Don’t ask me his name. (wink).

    Are you prepared to part with the lost opportunity of your cold hard cash to use for other things, including emergency living reserves? What is holding on to your cash reserves “intrinsically” worth to you?

    However, cash may be the cheapest way to go when one considers that a “no money down” solar lease will cost money. But how do you estimate this? For example, what is the actual percentage a consumer is paying to lease the solar panels calculated over the lifetime of the lease? Is it 7%, 8%, 9%? Ask your accountant or an energy consultant to calculate the scenarios over the lifetime of the lease.

    Lease:

    A “pre-paid” lease will cost money as well, like a down payment on any durable good, but it will cost LESS, (percentage) than a no money down lease? As an aside, this is why auto leases, home leases, or any type of lease instrument is widely popular; people cannot afford to, or choose not to pay cash. It’s here, I’d like to think we’re all adult enough to understand that we live in a free market. As consumers, we will pay what the market asks until our behavior changes the current trend.

    Conventional Loan or Balloon:

    No matter from which lender you borrow the money, you’ll be on the hook to pay an interest rate and agree to a set of terms and conditions tied to that loan instrument. Additionally, you’ll have debt financing tied to your name, which may hinder your ability to make other investments that are of higher priority, now or later. So what interest rate can you obtain? Is the rate lower than what your solar equipment will save you on your monthly utility bill, including eventually owning the equipment to produce free energy once it’s paid off? Or, is the interest rate MORE than what you’ll save on your utility bill and what free energy you’ll produce after you pay for the equipment? What if you run into problems down the road, and you simply can’t pay for the solar loan? Do you have the credit score and the documented income to qualify for a loan?

    PACE Program:

    “Property Assessed Clean Energy” . Where available, this is a great way to finance a solar investment, with no documented income. But there’s no free lunch here either, as the average percentage to finance through a PACE-like program is 7%. And really, this is okay when you stop to think about it. I mean, do we really expect to get 0% financing on ANY of these funding schemes?

    Your Personal Values:

    When purchasing solar equipment, the good news is that it’s not MANDATORY; it’s FREE WILL. So until the market volunteers to lower prices through consumer behavior, research and development and perpetuated government subsidies, it looks as if we are all working of our own volition to buy, or cry, or stay with our current utility provider.

    Energy Consultants and Accountants:

    “An ounce of prevention is worth a pound of cure”. Avoid solar lease pitfalls. Smart buyers always get their major investments third party verified by an objective professional. Why anyone would go with what ONE equipment supplier or leasing company recommends; this kind of trust indicates a BIG red flag to the indifference of good old fashioned due diligence.

  • Cybordolphin November 22, 2011, 10:39 pm

    Bottom line…. leases are a “bad” thing. Notice as the rebates dry up….. we shall begin to see the manufacturers go bankrupt. Predicted precisely. Even after having received $500,000,000.00 from our beloved President last year. Shame on the fools of this country. It’s because of our gullibility that shams like this even exist. Those of you in the industry still trying to defend this shameful exploitation of ignorant folks….. shame on you. By the way…. since this post began…. check out the cost to manufacture “thin FILM” technology. Not to be mistaken for “thin PANEL” technology (seems those sales people in the industry continue to confuse the 2…. almost as if they are completely in the dark with the differences). Uber cheap…. but you and I STILL cannot purchase the technology for our own personal use. We are well below GRID PARITY now on cost…. Demand that the public is able to have access to the new technology. All homes could be using solar on the cheap. Really cheap. And certainly without a lease. The savings would pay for the solars within just a few years now.

  • Cybordolphin November 22, 2011, 11:39 pm

    PV technology is ancient. Thin film is the future. And manufactured at .10 – .20 per watt. Compare that to the old technology. Also factor in paying for the same cost of installation so the installation guys don’t starve…. and you are still looking at like $6,000 per home to have installed.

    • Kelly February 28, 2012, 7:50 pm

      Cybor: You can purchase the thin film panels from Solar Direct in Goodyear AZ. I just had them installed on my home down there. Solar direct imports them out of Germany.

      • Cybordolphin April 21, 2012, 2:01 am

        Kelly…. the new thin film technology cannot be purchased by you nor I. And it does not come in a “panel”. You are confusing the differing technologies.

      • Leigh June 13, 2013, 2:31 am

        Kelly, I also live in Goodyear, and contemplating upgrading to solar. Please contact me with how well your system is working and the approximate costs associated with it. Now that this post is year old. Thanks..

  • Rick G January 19, 2012, 3:10 pm

    Short answer:

    4.3 kW SolarCity system, 20 years, one time lease payment of $4,116 in Denver, CO.

    Longer answer:

    As an engineer I did like all good little engineers and put together a spreadsheet taking into account all manner of initial and future costs of buying vs. leasing for the available technologies. SolarCity won hands down. No one was more surprised / resistant than me. Even with a no interest loan lined up for a purchased system I still couldn’t make the math work for buying.

    I’m also a licensed general contractor. The crew that installed my system was on time, professional, and had well above average workmanship (in spite of weather being less than perfect during the install). If these guys were my electricians, plumbers, etc I’d gladly hire them again. That’s actually saying something as I expect a lot from my subs, as I’m sure they’d gladly tell you.

    Although we don’t plan on selling anytime soon I did try to consider what would happen if we did have to sell the house before the end of the lease. I came to the conclusion that no one in their right mind wouldn’t just assume this lease, and if they didn’t see the logic in it I would be very unlikely to enter into a contract with them anyway. This factor will most likely vary for people depending on what the typical buyer would be for the home.

    For information’s sake, I would have gone with a bigger system but had limited available area.

    So, for me, in February of 2011, in Denver, CO, SolarCity was the hands down winner for putting solar on my house.

    Results will vary….

    • Tadas January 19, 2012, 4:33 pm

      Hi Rick, thank you for your comment and insights, always good to hear from an engineer. Granted, however, how “happy” your comment is and the professional use of SEO techniques (use of keywords) I have to advise my readers here to take your enthusiasm with a tiny grain of sea salt. :-)

      As far as your reasoning about not entering into a contract with someone who does not want a lease… As a Realtor I would only add that you would be exponentially limiting your potential buyer base. Bay Area is a bit different than the rest of the country but generally speaking, in this market, a seller will be happy to get any offer, let a alone the one they are truly happy with.

      • Rick G January 20, 2012, 5:30 pm

        I’d have to advise your readers to take your less than subtle calling of me a liar with a grain of salt. I have no ties to the solar industry other than the panels above my head. Would my Denver contractors license # or my company tax ID put your worries at ease?

        And as far as my reasoning when it comes to real estate, I think I’m right on. I flip houses for a living. Which in my experience gives me a much better understanding of the average buyer than most real estate agents (which I’m sure we can agree is a profession thick with silly people). Please expand on why my no cost to the buyer leased solar panels would exponentially limit my potential buyer base?

        PS: “Bay Area is a bit different than the rest of the country”? Seriously? I would counter that it’s vastly different than almost all of the the country in regards to real estate. I haven’t had any problems selling any projects over the last few years. Almost positive none of them went over 60 days on the market. Location, location, location…

        • Tadas January 21, 2012, 4:21 am

          Rick, I wrote a “grain of salt” (to accept it but to maintain a degree of skepticism about its truth), not a liar. :-) Given how enthusiastic your comment was, mentioning a city and a company name, perhaps you can see my suspicion was not unwarranted. As far as the buyer base, not everyone will want to take over a lease with the house. After all, a lease is a liability, not an asset. I meant Bay Area is different that the re-sale activity is better here because of the demand so you’d be more likely to find the right buyer for it. I still maintain that fundamentally, lease is by far an inferior option to simply buying the solar panels, or at least financing them.

  • Cybordolphin February 28, 2012, 9:14 pm

    Kelly…. do not confuse THIN PANEL with THIN FILM. Completely different. The future held being able to PRINT the film using a printer that could actually apply the thin film to a roof tile, etc..

    Ian…. finding the technology available to you and I…. once again…. NO you will not find a retailer in Phoenix of ANY other state. You did not understand or read my posts. The technology is only being made available to large utility companies… and the government. The utility companies want to keep you on their grid.

    Manufacturing costs now of less than 20 cents per watt… compare that to any other panel solar available today… and you can see the huge lower cost potential.

  • Dave April 8, 2012, 3:39 pm

    This is a great and informative thread, although I am still confused as why why the author is so down on solar leasing. I did some quick calculations and my options are 1) spend about 15-20K upfront (after rebates, etc.) to buy panels or 2) spend nothing, breakeven on energy costs and get about 50% of my energy from leased panels. Sungevity has a performance guarantee which make sure the monthly lease cost is offset by savings. I’m not doing it primarily for the money…as long as it breaks even or better, why not do my part to reduce reliance on the grid?

    If I look at the $15-20K system Sungevity would install and price it out to purchase, I am seeing about 13 years before breakeven. That makes no sense to me. Why should I prepay the cost of my electricity like that?

    Now maybe if I finance that system, it will feel a lot like the lease does…but best case, I think that works out to about $100/month, not $45. If you can show me how to finance a 3.76 kW system with a 20 year loan for $45/month…well, that system has to cost under $7500, assuming 5% and 20 years.

    This article has a lot of anti-wall street rhetoric in it…I don’t really care if I’m trading the rental of my electricty from NSTAR to Sungevity…and it seems like a home equity loan to put up a solar array in New England makes about as much sense as taking out a loan to build a man-cave in the basement. It’s not that I don’t have the money…but I don’t think it makes economic sense to invest in a solar array like that when there are other home improvement projects I could be doing.

    Finally, when I consider the risks, it seems like the most current (2012) offers from these leasing companies address those risks. The performance guarantee should cover the issue of the array not saving as much money as we’d hoped. When I go to sell the property…we can prepay out the lease or transfer it–not a big concern in the context of your average $500K house sale. Much easier to negotiate that than deal with unpermitted basement work, the scrap of asbestos the home inspector finds, or plenty of other unexpected things that I am very familiar with in buying and selling houses. The solar array is “all good” from a seller’s perspective.

    As far as I can tell, the principal risk to the lessee is that they are obligated to pay $45/month for 20 years and something could happen that would make you regret that commitment. The risk to the buyer of a solar system is all up front.

    A solar lease seems to me an easier choice than even going with LED lighting. I went all-in with CFLs and I have yet to see a single one last more than 2 years–never the 7 years of use they promise on the labels. Prepaying energy savings is risky. When there is an option to try the technology out with no risk, I say go for it. Even if I don’t save much money, I will be reducing net demand by contributing energy to the grid.

  • Guy from MAS April 18, 2012, 10:39 pm

    Great thread. I am in MA considering leasing option. I have 2 choices. One from SunRun (6000 KwH/year and 11.8c/KwH increasing at 2.9% per year) and the other form SolarCity (about 7.7K KwH/Year at 10.6c/KwH increasing 3.5%/year, 20 year term, $0 down). SolarCity is also offering prepay for $7.5K). Debating which way to go. Any comments/insights?

    Thanks.

    • Ian S April 19, 2012, 3:30 am

      Find a Sunpower dealer and get a quote on a Sunpower lease. They are very competitive and their panels are top quality. In any event, I’d avoid leases with escalators even if you have to prepay some nominal amount upfront. If you don’t go fully prepaid, then consider that when you sell the house prospective buyers may not be enthusiastic about another monthly payment. 20 years is a long time for a commitment.

      The installation of my system has finally begun. $6700 prepaid for a 6.9 kW system.

    • Dave April 19, 2012, 1:58 pm

      Don’t forget the impact of SRECs. In Massachusetts, a 6 MwH/year system would currently generate over $3000 of income in addition to electricity savings. While the future of SRECs is certainly not guaranteed, it certainly helps in the short term and should make a system this size break-even in 5 years or less when you factor in all the other incentives and credits you get when you buy vs lease. If you don’t have the cash lying around (who does?) then a home equity loan will still result in monthly payments that are less. If you are considering prepaying a lease–why wouldn’t you buy instead of lease?

      I did more research from my earlier comment and while I do not share the author’s perception that solar leases are somehow evil or bad because they are connected to Wall Street, it seems to me once you have decided to go solar, you might as well buy the system. In my case, a shading tree may derail the whole thing–and even if it didn’t I am looking at only a 3-5kW system. When you can put a 5-7kW system on your roof…I’d want to OWN that asset…and within 5 years or so, it’s all profit.

      • Ian S April 19, 2012, 4:03 pm

        Massachusetts may be an unusual case but other states with SRECs have seen an extremely volatile market for them with huge value drops from when they started. Here in Arizona, there is no SREC market, and in any event, if you accept the utility incentive, you give up any right to them. As for prepaid lease vs purchase, I’ve run the numbers here in Phoenix, and the prepaid lease is far cheaper than a purchase even after all the incentives are considered. For example, my prepaid lease is under a buck a watt and I don’t have the hassle of dealing with getting all the incentives, tax credits, etc. The reason for the prepaid lease advantage is quite simple: the lessor benefits from MACRS depreciation for which an individual purchasing the system is ineligible.

    • CarLen April 30, 2012, 5:10 pm

      I am using Sungevity. Prepaid a 3.4 Kw system for $5000. Therefore there are no monthly payments. Extremely easy to do.
      You can use my reference number for another $500 off but then it sounds like I am selling as I also get $500 for the referral and that is not my intent. My referral number is 147185 if you want to use it…

      So far I am very happy with this decision as it has been painless. All I want is to see my electric meter spin backwards!

  • Wayne May 18, 2012, 2:56 am

    I agree that the plan that has 3.5% raise in price is no good… there are other plans that are a little down and a fixed rate. I am deling with another company who offer a fix cost 0% down plan.

    As far as the rebates… that seems like a service to have them deal with it and pass the savings on.

    I see it as a good deal, maybe not the best opportunity for your money, but still a good deal, doing the right thing.

  • Dr. Katherine Verhoeven June 9, 2012, 9:25 pm

    We had an appointment with SunRun yesterday, signed papers, and are within the three day period to cancel. Are there indications that the technology will advance to the degree that our system will soon become outdate?

    • Tadas June 10, 2012, 4:04 am

      Hi Katherine, I received this answer to you via e-mail so posting here as a reply. Its from Jonas Villalba: The equipment and technology are irrelevant. You signed a contract to purchase electricity. SunRun is required to guarantee that electricity for the contract term. After the contract ends, you will likely wish to have the system removed and replaced with the latest technology. They are just another electricity provider similar to pg&e.

    • Ian S June 10, 2012, 4:20 am

      To answer your specific question, no, your system is almost certainly not going to become outdated anytime soon. But what does outdated really mean in this context? Your system, assuming it’s comprised of good quality components will be generating electricity for decades to come. What else really matters? That said, I do hope you got several bids and looked at both a prepaid lease and outright purchase. Big names besides SunRun are Sungevity, Solarcity, RecSolar, and Sunpower. The variability in price as well as terms would astound you. Other low and zero down leases with 20 years of monthly payments tend to be far less attractive.

  • John Finney July 3, 2012, 5:43 pm

    This is the first time I have read this site and the thread of emails. As a solar EPC company I make it very cut and dry for our customers. It is just like buying a car. If you want the best ROI (return on investment)then paying cash is going to be the best for you generally speaking. If you still want to benefit and cannot afford to then there are other options such as Leases and PPA’s that will give you less benefits with less upfront risk.

    I see a lot of confusing points in this article that do nothing more than demonize investors and “Wall Street”. As any renewable Developer of Installer can tell you the hardest thing in this business is the financing. Banks are not eager to fund many of these projects without heavy collateral in most situations. So if you have equity in your home that you are not saving for something else by all means see about an equity line or other personal loan and finance the system yourself. But to demonize the people out there for making a profit on financing things for you makes no sense. Shop around…do not go with the first offer. Understand that on the residential level most people will not make the most benefit of the Tax credits or REC’s. The leasing companies are taking these incentives from a lot of small residential systems and bundling them into larger packages to essentially “sell” them to larger firms that can use them more efficiently. In return they get money which offsets your lease payment. PPA’s are generally no different. The incentives are used by the people who front the money and/or own the actual equipment.

    I also saw some comments about escalators in leases. We are very flexible in our Leasing and PPA structures. We try to work with the clients financial situation to find the best solution for them. Sometimes having a lower initial lease rate and gradually stepping it up over time allows a clients cash flow to work out better. Sometimes it is part of a personal financial strategy that allows a customer to take to the energy savings more in the beginning of the lease and push the heavier energy payments to the end of the lease.

    For the average homeowner I would tell them to spend a lot of time breaking down the numbers with the company they are working with. There are a lot of variables in this business. And there are a lot of high pressure commission based residential sales people who are less than half trained in what they are selling. I have seen a lot of number manipulating that does nothing more than cause a bad name after the fact for a good industry. So take your time, understand what you are signing and why it is better than the next offer. GET A PRODUCTION GAURANTY if you are doing a lease. Make sure you have a plan for the O&M of the system as it saves you less without regular cleanings and general maintenance.

  • Glenda July 6, 2012, 9:03 pm

    I am currently experiencing the whiplash from a deal like this. I did the whole lease thing 2 years ago, and have found, with monthly payments, absolutely no change in my overall energy costs. Now I’m having to short-sale my house and this lease thing makes it virtually impossible to do so. Who has credit over 700 and would want to take on an extra $117.00 a month payment on a lease? With the glut of affordable housing on the market, as a house buyer, I would pass on to an easier deal. I can’t get the company to answer my questions straight. I am currently asking how much it will cost for them to dismantle the system. I am NOT paying the lease and having someone else benefit from it.

    Does anyone know of a way around this? Legally, that is.

    • John F July 11, 2012, 6:55 pm

      Hi Glenda,
      Getting out of this will all depend on how the lease is written. You need to look at your lease and see what kind of recourse the lease owner has if the lease terms are breached. If they can come after you personaly or if they can only lien the home. If they can attach their losses to you and not your home then it could take a bankruptsy to get past it if they come after you.

      There is a Law Firm in Palo Alto named “KL Gates”. This is one of the “go to” law firms of the energy industry and perhaps you could give them a call and have them refer you to someone who could help you. It is worth a shot!

  • AJ August 13, 2012, 6:50 pm

    i’ve been looking and this is what i concluded..

    the difference between buy and pre-paid lease was about $2,000 for the same specs. with the pre-paid lease, all the parts and labor are covered for 20 years while buying the system wouldn’t. at the end of 20 years, the company can

    1. come take the system down
    2. offer to sell it to me for a price
    3. try to upsell me on a newer system.

    assuming in 20 years, this technology we have today will be pretty outdated, it would probably cost them more to take it down. they could also offer to sell it to me for cheap as nobody would really want this system specs anyways. but most likely the sales rep i talked to they would try to upsell me on a newer system.

    so for $2,000 savings in pre-paid lease…i get the system completely covered with the option to buy if i wanted (assuming that the buy price will be less than $2K) then it would make more sense to just do the pre-paid lease.

    also..since it’s pre-paid..if i were to sell this house…the new owners would just have to know that in however x-years are left in the lease, they would be presented with the 3 choices above at that time.

    wish people posted more about pricing but a 5Kw system would cost me about $16K pre-paid lease. just fyi.

    • Mike August 19, 2012, 5:43 am

      Fyi, for those in the San Fransisco Bay Area, there is another option. If your electric bill averages under $130 per month, a nonprofit called SunWork, does installs using trained volunteers for 30 to 40% less than traditional pricing.

      They can typically install a small system for around $3 per Watt before rebates and tax credits. They have great reviews on solar-estimate.org. Full disclosure, I am on SunWork’s board.

  • CarLen October 20, 2012, 1:48 am

    My installation is complete! I am happy with my decision to lease. American made panels, local union labor and a 4 day installation job…
    Feel free to ask any questions about the leasing program or about the processs…

    I am using Sungevity. Prepaid a 3.4 Kw system for $5000. Therefore there are no monthly payments. Extremely easy to do.
    You can use my reference number for another $500 off but then it sounds like I am selling as I also get $500 for the referral and that is not my intent. My referral number is 147185 if you want to use it…

    So far I am very happy with this decision as it has been painless. All I want is to see my electric meter spin backwards!

    • Carlen January 21, 2013, 11:31 pm

      Update: The system was finally turned in Dec with delays from paperwork etc. I am glad we were going into the shortest day of the year and winter as our expectations were low. When there is sun we initially saw a peak of 6 kWh/day in the first few days. Now , in January, we have hit 12 kWh/day. It is steadily increasing as winter progresses.
      So.. is it worth the money? The lease got us to do it and that is more important than not going solar. It has been very entertaining watching our daily kWh production and the meter actually move backwards. We are looking forward to peak season. Now that I know so much more about solar installations I still feel that we did not have the time or energy to do this ourselves.
      Whatever you do..once you go solar you will feel real good about it.

      I am glad we pre-paid the lease because now I am done with it..

      Good or bad? Lease or buy? Whatever you do… please be careful with scams, sales pitches, too good to be true offers etc. This advice holds true whether you lease or buy. Now that solar is here.. there will be more and more people trying to take advantage of you.

  • Gonzo October 24, 2012, 9:02 pm

    Anybody has experience with EchoFirst? They provide solar panels, water heating, air cooling/heating…just wondering..contemplating the idea to get their system for my home in Arizona.

  • RK November 9, 2012, 10:33 pm

    Looking to sign a lease with Solar City. Here are some details:

    State: AZ
    Capacity: 6.2KW
    Prepay: $9600

    They will pay 5.2c per KWH that I don’t use. They guarantee power generation, maintenance, replacement of inverter etc. To me it makes total sense. Anyone with a different idea?

    • Ian S November 10, 2012, 1:06 am

      What utility is it with? I’d be leery of them paying me only 5.2c per kWh you don’t use. That’s an odd setup with a prepaid lease. What you really want is net metering where the utility credits you for the kWh you feed back into the grid then you draw on that credit when you’re not producing enough in the hot summer months.

  • Lynn November 12, 2012, 3:33 pm

    My husband and I currently lease a system from Solar City. We have had this system in place now for almost two years. Other than a couple of hiccups in the beginning (bad inverter, which they promptly replaced and some issues with our city) it has been fine. We pay around $125.00 a month for the lease for a 1275sq ft home. The lease payment only went up by about a $1.00 after the first year (no big deal). We were told it would only go up by maybe a dollar or two at most each year. Remeber though PG&E is going up much more than that each year so we are still saving big time. We pay PG&E around $500-$700 a year now (it varies depending on the weather – Fresno, CA gets HOT in the summer so big bills for air-conditioning). Solar City monitors our usage as do I via their website. We have had no problems so far and I am pleased at the money we are saving. We had a 0 down lease and after doing the math we are saving beween $1000-$2000 a year in energy costs (PG&E credit us for the solar energy we put back into the grid). I for one highly recommend Solar City lease program, but only if your energy costs are high like ours were. I agree with the person above who stated that if your not paying more than $100 or so a month then solar probably won’t do much for you. Our average bill was $250 a month and now it is $180. I can’t speak for a PPA, nor can I get my head around how it works but for us the Solar City solar lease was a great way to go. we are now looking into wind power to off set the rest of the PG&E bill. Wind power is great as you generate power during the night as well as during the winter. When the sun isnt shining there is a good possibility of wind, so I think the two go hand in hand. I’m in the preliminary examination of wind power but I believe the hardware is much cheaper than solar. Whether it is worth it or not, I haven’t determined yet. Time will tell.

  • Chris November 21, 2012, 1:10 am

    I’m a residential solar panel system designer for a company in southern California. I don’t think I’ve ever designed a system that had a 3.9% annual escalation. That sounds outrageous to me. Most of
    the systems we’ve leased to people had 0% annual escalation. In SOME cases the homeowner chooses to
    go with a 2.9%. But I don’t think we’ve ever seen them go over 2.9.

    There are a lot of sketchy solar companies out there, but not all leases are bad.
    Everytime I design a system I see to it that the lease payment + their post-solar electric bill comes out to less than what they were paying before. Sometimes I can’t do it because their bill was very low in the first place, but that’s when it’s time to just be honest and tell them they had a low bill already and solar wouldn’t lower their cost of electricity very significantly. This is pretty rare, it’s mostly when the homeowner is on a care rate or a medical rate with Edison. But I digress, I’m just here to point out that not all leases are bad news. Whenever someone is thinking about getting solar they should ALWAYS shop around, look at everyone’s proposals, see who has the best deal then decide.

    • Rob February 17, 2014, 12:49 pm

      But why wouldn’t Solar be better even if the monthly costs went up slightly with it?
      The clients get to get to go green, and it’s an overall win for society. Why allow the utility companies to win a tie? I just see it as a positive for the US, so why focus so much on the payment?

  • Coronadad January 5, 2013, 1:52 am

    I just purchased solar today from Sungevity. My contract was looked over by my friend who is an attorney. It clearly states, a “fixed” monthly payment for 20 years. Covers everything if it breaks, they replace all parts, we even get paid more per kW while the system is down than Edison charges us! It’s guaranteed in writing how much output must happen, if that doesn’t happen, each year we would get a check for more than Edison charges per kW.

    If anyone is interested, they have an extra $1,000 rebate right now for all of you if I refer anyone until the end of January, but you must use this link:
    [comment edited by admin - promotional links will not appear, please e-mail commentator directly for the link]
    After Jan 31, 2013, it goes to $500 for you and $500 for me.

  • Tyler January 10, 2013, 12:02 am

    This website says a lot against solar leases but has quite a bit of inaccurate information as well. To start, the payments only increase by 3.9% IF the homeowner wants them to. All monthly leases have the option to increase at a rate of 0% up to 3.9%. The reason for the increase is to allow the homeowner to reduce their bills now and allow them to grow over time as inflation and utility rates grow. On average in the state of California utility rates increase at 6% each year. Would you rather pay an increase of 6% or 3.9%??? Another bit of inconsistency in this rant is the cost of going solar. People think there is so much money to be retrieved from rebates but the truth is that they are going away very quickly. Likewise the ones that still exist are rather difficult to apply for and to ensure you receive. California is almost at a point of grid parity meaning it is cheaper to purchase a solar system than to pay your utility bill every month. This gives lawmakers very little incentive to keep extending these rebates. Solar leasing companies have the ability to take the remaining tax credits as well as specific business tax credits and use those to pass along greater savings to customers, something a residential homeowner could not accomplish.

    The biggest thing you are missing are the huge benefits of having someone else own your system. These include a PERFORMANCE GUARANTEE AS WELL AS ALL MAINTENANCE AND REPAIRS! Imagine purchasing a $50,000 BMW. In the following 20 years you will have to pay anywhere from $5,000-$20,000 in maintenance and repairs and you’re not even guaranteed that it will work for the entire time. If you could lease that same BMW for that entire time you are guaranteed all of those things and for less than it would cost you to purchase it outright.

    Overall there leasing truly is a win-win for both homeowners and solar companies and yes wall-street investors. This option does not screw over anyone and gives people the power to lock in utility rates that PG&E, SCE, and SDG&E cannot and will not do. Another fun fact to think about is that yes, after 20 years most companies will “say” they are going to remove the system but in the end it is too expensive and time-consuming to do so. They will 95% of the time end of leaving it on the roof.

    My credibility here is that I am a Mechanical Engineer that has worked for several different solar integrators and currently works for one of the largest solar leasing companies in the United States. I help people every day and in no way do I impose a threat or a hinderance on anyone’s wallets.

  • Paul in Clovis January 10, 2013, 5:35 pm

    Nicely put Tyler. At the end of the day, the solar market would be 10% at best if it wasn’t for the lease/ppa’s. Less demand=higher costs=no parity=fewer or no real alternatives to utility provided power.

    Happy New Year!

    Paul

  • mary January 19, 2013, 3:27 am

    i am hoping consumers open their eyes. i kept researching and have come to agree that the lease is a RIPOFF. a 78k with micro inverters on a 20 year lease was quoted $23k.if we prepay, closer to $50 if paid monthly. we may not live 20 years. a problem for our kids. quoted $36k to buy system. watched youtube DIY & shopped. we will pay $16k max for the same system. we will do the roof mount and have an electiican hook up. this price includes a respected local draft plans ,app to tie in to grid, gateway, all nuts bolts racking, flashing, disconect, 30 mono 260w pv etc. we will be on a time of use E6 net meter. i can wait till do laundry off peak hours. i can handle a full day on the roof. we don’t make enough for the 30% tax break. we do for a utility rebate about $1300. check which is not included in our cost. we still have the 10 year inverter & 25 year mono panel warranty. and jamie our power is produced a half hour drive north from us. do the math. 2 doors away they paid $17500. for a 3k no tax break for them installed. well they have some buyers remorse for not shopping. also not the best panel company. do your homework

    • mary January 19, 2013, 3:47 am

      1 more item for the consumer. check nasa on solar storm 2013 emp. i am hoping to disconnect and de-energize my inverters. panels are suppost to be okay. check year 1857 solar storm knocked telegraph grid out world wide and we have a big whole exposing us more today then we used to. i will hope to watch dvds with our pv.

      • Carlen January 21, 2013, 11:35 pm

        Not that I am worried about it but If the solar storm knocks out all the electronics in my Sungevity solar system.. well .. I guess that is why I lease.. Under the contract..it will all be replaced…

  • JJ January 22, 2013, 5:34 pm

    Honestly, I didn’t read most of the comments…there’s too many of them and I just wanted to respond to the writer. I get it, your entitled to your opinion and I respect that but I don’t respect someone that writes about something they don’t understand or haven’t fully researched. If I didn’t know better I would have read this and probably never given solar a chance which no doubt would have led to me losing thousands to the utility companies. Yes, I’m in the industry but the only dog I have in this fight is the fact that I don’t agree with the writer at all! I work for a company offers both a PPA (similar to a lease) and the purchase of solar. I always compare the programs with my customers and let them choose which one works best for their family and situation. Yes, if you purchase you’ll most likely save more money in the long run but I find that after my customers are properly educated they don’t want to purchase. Why??? 1. With a PPA there’s no large loan balance added to your credit report raising your DTI and dragging your scores down. 2. Service, maintenance, warranties and a performance guarantee are all included with PPA’s. You literally install your system start making lower payments and never have to worry about your system again. 3. In most states you don’t have to pay sales tax on the equipment because with a PPA your are paying for the electricity. 4. What if you have or want to move? Then you’ll have a loan that you’ll be paying for after your close of escrow. Yes, you can use the proceeds from your home to pay off the loan but then your screwed because you’re going to see a loss because used solar systems depreciate like cars. These are just a few of the many examples of why people would rather lease or go with a PPA than purchase. It’s plain, simple and easy!! That’s what people want. I don’t know where you’re getting a 3.9% increase from because industry standard is 2.5% which is a lot less than the 6-9% increase you would see from your utility company. And if the 2.5% is that big of an issue for someone they have the option to go with a fixed rate. However, most people don’t go with this plan because the rate is a little higher and it only makes since if you know you’re going to be in your home for 7+ years. And I’m not sure what planet you’re from but hear on earth if you want to buy a house you need a credit score of 700 or more. So common sense says if they’re going to buy your house then they’re going to qualify for your solar system which by the way takes a 680 credit score and a 1 page transfer agreement that goes into the escrow instruction of the sale of your home. Easy peezy lemon squeezy…again that is the whole point…NO RISK, NO INVESTMENT NO ROI time, it’s just simple. And due to the Solar Rights Act which was passed before you wrote this Home Owners Associations can’t tell you not to go solar. It’s the one thing they can’t tell you not to do. Let’s see, what else…15-20 agreement…who cares, you know what your payment is going to be for that long amount of time. Where is your agreement with your utility company? Right, you don’t have one which is why they can raise your rates every year. Now, I will recommend that someone purchases a system if they one have the money and two know that they will be in that house for 10+ years other than that there is no reason taking on all the risk of purchasing and waiting to see your ROI. Solar is asesome and is saving people a lot of money. Depending on the size of your system your going to most likely see at least a 20k savings over your utility company. How can you say that something that saves you money isn’t good for you. If you invested 20k into a CD for 20 years with a 3% APY you would make $6,878. So investing nothing for solar and saving 20 30 40 50 60k sounds like a pretty wise financial decision. Okay, I’m done for now, have a great day everyone and if you do decide to go solar whether it be buying or leasing just make sure you go with a reputable company, do your homework and most importantly make sure you like and trust your sales person. And always shop and ask for a lower rate than what they originally offer you.

    • Rob February 17, 2014, 1:00 pm

      Well said!! Are you still in the industry?

  • Terrell Stuteville February 13, 2013, 10:55 pm

    I agree, but we all need to understand that adding Solar to their home is an asset that could increase the long term worth of their building if / when they make a choice to sell. With the environment the way it is going we simply cannot overlook any product that offers 100 % free electricity at no cost to both the consumer and more importantly the earth!

  • Patrick March 27, 2013, 6:15 pm

    I am a homeowner who has been evaluating solar for my house for over 7 years. Looked at original full purchase, lease, PPA, and even doing the purchase of the system through wholesale sources, and hiring my own installer. My main criteria was a resonable breakeven time period of less than 7 years.

    reading all of these posts, i can say that everybody is a bit right, and a bit wrong. What I finally realized, is that it is the time period that you think you will be in the house that is the main factor. If you think you will be there for 20+ years, then full purchase is probably the way to go. If you want to save money, buy the system thru the web, and find an installer. I could get a top of the line system (4.6 Kw) with 25 year inverter warranty thru Solarhome. Then you can find an installer who will typically charge 0.7 per watt. With all the rebates, etc, total cost would be around $12K. Little extra leg work if you go this route as you are the General manager in sort, so if your not up for that, then go with a full installer. You will pay more, but less headache. My breakeven was about 7 years assuming a 7% yearly rise in electrial rates. This is about right as i am consuming power in Tier 4 and 5 with SCE. the reason i finally did not go this way, is that i figured i probably wont be in my house for more than 10 years more (want more space, job move potential etc). If i knew i was going to be there for 20 years, this would have been the choice.

    so, then lease and PPA beccomes an alternative. SolarRun is now offering the latest PPA deal. You can do 0 down, or $3K down. With $3k down, you get no escalation in the rate, and the price is $0.16 per KwH. They target about 90% of your current power usage, so the remaining 10% i pay to SCE. This paypack period is about 4 years. The overall ROI of this over 20 years will be much less than if i bought the whole system. But the point here is that it is all about potential timing. I know i will be here for at least 4 years. No idea about 20 years. So i am willing to make less money than if i buy the system, because it reduces my risk that i have to move before i capture the full benefit of buying the system outright.

    With either full purchase or PPA (didnt really analyze lease), your going to save money. It is just a matter of how much money you will save relative to the amount of time that you will be in the house.

    Electrical rates in the higher tiers will continue to increase. The grid in Southern Cal is over burdened and will require extensive capital improvements. This will result in rate increases.

    anyways, i never saw any mention of appreciating the time scale of being in the house as probably one of the main factors for making your decision. I would say that most people do not stay in their house for 20 years so this is a relevant consideration. best regards

  • Patrick March 27, 2013, 6:44 pm

    One thing i forgot to add from my additional post, is to also consider what any additional value this would add to your house if you did sell it. From my previous post, there are two financial terms you have to consider, Payback and ROI. These are very different financial terms. Payback is when you have received monetary return to 0 the cost of your investment. ROI is the return you get on your investment over the life of that investment (basically, how long you will be in the house). So, if solar does add some economic value to your house when you sell, then this would reduce your Paypack time period, and increse your overall ROI.

    What i would love to hear is from some of the realtors who can share their experience about what qualtititive economic value a solar system adds to the house. From the several realtors i have talked about, they still do not have a good model for valuating solar for a house. If all else is equal between two houses including asking price, and one has solar and one does not, this is a simple choice that the solar house wins.

    My simple logic for the value of solar is that if it saves you $X per month, then a prospective buyer could potetnially buy a house with that same $x more per month in their mortgage and get “more” house since they could apply the saved electrical bill to their monthly mortage payment. Lets assume the normal electrical bill would be $100/month. At 4.25% for a 30-year loan, an extra $100/month in mortgage payment (remember, eletric bill erased so this money would now go to a mortgage) could get you $20K more in loan. So, lets say for example, that we would discount this in order to make the solar contribution a positive aspect for the buyer and not a break even for a mortgage consideration…lets use 60% discount, then, this would value solar to the buyer by $12K more for your house. This of course is assuming a complete purchased system. But you could do the same exercise for a PPA where they woul not get the full $100/month electrical savings, but rather some lesser amount that they owe each month for the PPA fees.

    would love to hear feedback from realtors on how they value solar. Any additional value on resale would of course need to be considered into your Payback and ROI projections based upon how long you think you will be in the house, and the final outcome should help you make the choice between full purchase and PPA.

    • Rob February 17, 2014, 1:31 pm

      Great questions, and well thought out. Why wait though, just reach out for the question you want. Realtors love to hear from new potential clients, so simply “google” realtors in your zip code and ask them. If they don’t know, they will find out. Plus, you can go down the list and call 10 in a row, and get an average guess. Realtors though, arent the best when it comes to those questions, you may also want to try to contact your local Appraisers. They are the ones that really set the market price, along with the consumers of course.
      I would tell you, in regards to real estate, anytime you have something unique and atypical of the market, it will limit potential buyers in the future (plus the new buyer has to quality to transfer to them). Anytime you cut prospects, it’s likely the supply/demand ratio gets worse for the seller. Plus, an appraiser has to have “Comps” to compare your home against, so it is all relative.

      Finally, Each state is different, as the higher utility states get more benefit from solar than others. So, the homes appreciation from solar panels would directly correlate with the market. However, If you review every option except the purchase, the future value (up or down) doesn’t matter. (again, the issue is on the qualified new buyer for the transfer, as MANY buyers do not have 700+ credit. I’m a mortgage broker, and that is just something you will need to trust me on). Although, as the economy gets better, banks will loosen up on lending policy and lower credit thresholds

  • Jeremy May 30, 2013, 4:31 am

    Lawrence Berkely Labs released a study of Solar Homes sold verses non-solar homes soled in California. Saw a $17k premium for solar homes…
    http://newscenter.lbl.gov/news-releases/2011/04/21/bright-spot-for-solar/

  • Rich June 2, 2013, 2:09 pm

    We’re putting in a system in Hawaii. As our home is a rental (we use it as well) it does not qualify for the 30% federal tax rebate for individuals. We probably could get 70% of the state rebate (35%) off of a straight purchase. The $42,000 price of the system (31 panels) in Kauai would be cut to $22,500. Utility costs on Kauai are very high (about $.43/kWh) and our bills are about $5,000/year. We believe our bills would be cut about $300/month, and SunRun has a power guarantee for our current output (but only @ $.105/kWh). We plan to pay for a lease up front, and believe the payback will be about 6.25 years. On a 20 year lease, we would then be saving about $3500 or more per year, burning less oil, etc. We do not plan on selling the house (ever) and passing it to our heirs. I really can’t see the downside of this. In 20 years they will take it off when the lease is up. If we did sell the system would go with the home, which would be a great selling point for a buyer.

  • Jeremy October 30, 2013, 5:29 pm

    This article is out of date. There are no more rebates with most utility companies. They have all ran out. PG&E, SCE and SDG&E are officially done with rebates. Federal tax credit is 30%. You need to qualify, if you are retired you may not get any of it.

    credit requirements are much lower now than 700 and SolarCity has some solutions to transferring the agreement to a new buyer if they do not qualify. but lets be real, if you qualify for a home loan these days you will qualify for solar.

    If you purchase you are responsible to fix. Other than that it sounds like solar is a no brainer, just what is the option for you.

  • Carlen October 31, 2013, 4:05 am

    Almost one year since we leased with Sungevity. We have had 3 referrals for $2500 back so that was good. However the biggest thrill is generating electricity every day and THAT is why we went solar… So do it… Just do it…you won’t regret it…

  • Corrine February 12, 2014, 9:57 pm

    Thanks for the information. They just came by and were trying to sell me. Appreciated your posting.

  • KathyK April 25, 2014, 8:18 pm

    Yes, this is a negative article, lacking many, many facts and options. Of course it’s 4 years old. One thing it fails to address is that the solar lease has made solar panels (CLEAN ENERGY) available to the masses. The new credit requirements will be going down to 650 to qualify for most solar leases and those requirements will continue to go down. The solar lease has kick started the solar revolution in the US and is going to help this economy is multiple ways, including creating thousands of jobs, reducing dependency on fossil fuels and foreign energy imports and it helps our grid during peak load times. For instance there will be fewer rolling black-outs because all of these new independent energy generation sites (people’s homes), will be able to help lesson the load during peak hours. And ultimately, the solar leasing program is helping us fight global warming more quickly, which we can’t really do quick enough. People just need to be smart about the leases they engage in. There are many fair offers out there.

    • San Jose Green Home April 25, 2014, 8:28 pm

      Excellent points Kathy. Even after four years I’m a big proponent of buying the PVs and claiming the credits, rather than handing them out to solar lease company and paying all this extra fees in interest, not to mention full price of the panels. However, if one was to find the silver-lining in all this it would be in the points that you mentioned.

  • Scott May 21, 2014, 12:20 am

    I was approached by a guy working for SolarCity at a show recently. I’m not one to just jump and buy something because someone talks to me, but without me asking about Solar he sure was pushing it. They make it sound like it’s a great deal and that you benefit from it, but I’m old enough to know that if something sounds too good to be true, it probably is. There’s no free lunch, and I’m sure everyone who works in solar will argue this comment – I expect you to disagree with me. But when you just don’t find anyone who doesn’t work for a solar company telling you that it’s great, then you start to believe it isn’t so great. My e-bills are well below three digits most of the year anyway, and since I live alone I don’t use much electricity. I especially don’t like the contract and then the “buy them at the end of the contract”. It doesn’t sound to me like they are “free” if you’re paying for them over time or at the end of the contract. A tire shop once told me they had free mounting and balance, but their price was higher than everyone. When I asked, he said they build into the price of the tire what they feel the free services are worth. That makes those “free” services not so free, right? So with solar, if I’m buying the panels at the end of the 15 year contract, I’m paying the full new price for 15-year-old panels. This doesn’t sound like “free” to me.

    • San Jose Green Home May 21, 2014, 9:14 am

      Exactly Scott, most if it is fancy language and short term benefits but in the long term you end up paying for it through the roof but they end up with all the subsidies, discounts, etc.

  • Ollie July 31, 2014, 1:39 am

    It was true in 2010 and it remains true today: SolarCity is a gigantic rip-off. Leasing solar panels in general makes no sense, unless you have astronomical power bills, but SolarCity is the worst.

    How they continue to get such good press astounds me, although it at least looks like investors are wising up. I mean I love Elon Musk and all, but he’s majorly misfired with this venture.

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