Basically everyone Should Get Solar Panels In California Right? Via Financing?

[Xepa777]

So…if cost/watt is high (like in Cali it should be above 20 cents/watt), then everyone should finance Solar.

If you finance at like 0.99% interest over 20 years, you pay NOTHING upfront….but you get the 30% tax credit NOW. That basically gives you a tax credit for the first several years of the solar panel monthly payments. All while you’re paying a lower monthly bill vs what you’d be paying normally (especially so if you have an EV).

Eventually over course of 10 years the inflation should eat away the difference of paying cash upfront, and with us we can hodl more tesla share in the meantime.


This sounds like free money tbh, assuming your financial cost/watt is under like $6 and you have access to get that loan.

Why shouldn’t everyone do this???

1) if you have no tax liability to take advantage of the credit (rare scenario, but sure)

2)some psychological anti debt mantra (okay, that’s fine but I’m just looking at economics here)

3) you believe inflation won’t be high enough over 20 years to make this worth it (team Cathie Woods deflation)

4) you think you will resell house in short time period (5-8 years) and the cost of paying off the solar loan then exceeds the savings accrued (or you want to pass off the loan but then becomes liability and hurts your ability to find a buyer). Honestly if you live somewhere even 5 years only I think this scenario is widely mitigated against? Maybe I’m missing some math or greatly overestimating added property value to a fully owned solar system)

Thoughts???

 

[el-guapin]

Don't think .99% financing over 20 years is available anywhere. When Tesla had their .99% financing promo, it was for 10 years and IRCC, it required a high down payment. That promo didn't last long before it was shelved. I was able to secure 2.99% for 25 years with $0 down. I still think that's high but that's what was available to me at the time.

 

[chadol]

I agree with your point. The only reason in my case is that I have to also replace the roof tiles at the same time. The cost is alot more. It will be great if there is more incentive for solar + roof replacement.

 

[Xepa777]

I agree with your point. The only reason in my case is that I have to also replace the roof tiles at the same time. The cost is alot more. It will be great if there is more incentive for solar + roof replacement.

Can’t you get it all bundled together for the 30% tax credit? I’m bundling together an entire gas line replacement as well for the 30% tax break will even try to get 220v charging as well lol

 

[thesmokingman]

I agree with your point. The only reason in my case is that I have to also replace the roof tiles at the same time. The cost is alot more. It will be great if there is more incentive for solar + roof replacement.

You might consider the solar roof option instead of panels, two birds one stone.

 

[jjrandorin]

If you finance at like 0.99% interest over 20 years,

Where are you getting financing for solar panels (from tesla or otherwise) for 0.99% interest over 20 years? This post also reads like it was not originally posted in this subforum since in this subforum we do not normally talk about "with us we can hodl more tesla share in the meantime". Was this originally aimed at the investment subforum?

 

[tfan2018]

The .99% financing that Tesla had last year was a great deal.

But financing it kinda ruins the whole getting rid of electric bill feeling

 

[Xepa777]

Where are you getting financing for solar panels (from tesla or otherwise) for 0.99% interest over 20 years? This post also reads like it was not originally posted in this subforum since in this subforum we do not normally talk about "with us we can hodl more tesla share in the meantime". Was this originally aimed at the investment subforum?

Ehh I’m mainly an investment forum poster lol

 

[Xepa777]

The .99% financing that Tesla had last year was a great deal.

But financing it kinda ruins the whole getting rid of electric bill feeling

Yah, but factoring in opportunity cost and time value of money this definitely nets out better imo. If you were to go with emotions then getting power walls and disconnecting from the grid altogether is probably the preferred scenario lol.

 

[sunwarriors]

I tend to not like trusting lease/loan companies for solar due to a lot of restrictions or fine print that might be trying to rip me off, but instead of 0.99% in your 20 years scenario, maybe if someone hasn't done solar yet, just setup traditional financing and finance as many things as possible at low/lower rates and run with that instead. No need to complicate things with some solar PPA or lease or loan tied to the solar. Setup outside financing and do the same thing honestly.

We refied at sub 3% for 30 years fixed and don't expect rates to drop back down to those levels soon. Don't sweat the few percentage points you might lose with some fancy/big letters financing that might be a scam. iBonds are paying 9%+ now, they should still be decently high next cycle. Maybe pick some of those up if you have spare cash. NOT INVESTMENT ADVICE, SEEK YOUR OWN INVESTMENT ADVISOR FOR YOUR SPECIFIC SITUATION.

As for the 30% tax credit or any tax credit like the EV credit, there is a lot of assumptions from folks that a lot of things with tax credits are priced accordingly (inflated) to account for it. Maybe without any solar credits, prices will go down? (probably not likely, but still...).


What you're talking about in general can be extrapolated with any financing honestly. You're assuming any other investment will be going up, but leverage works both ways. Invest in stuff with options/margin/leverage and a 20% drop can result in a 100% loss as well. If you can invest and make 20%, any financing lower than that can be profitable, but since anyone who can see the future won't be sharing it with you or me and are already doing it and enriching themselves with it, it's sorta a moot point.

 

[wwu123]

The OP seems to bringing the topic up because the 30% tax credit is new. Yet that's not materially different than the 28% or 26% that has been the case for many years, but all those years nowhere close to everyone was rushing to get solar. So just by the tax credit alone, all the arguments for or against getting solar are unchanged from what's been debated here and elsewhere many times over.

He does bring up some of the classic debate points though, and it's actually here that some of the factors may have changed substantially, that would cause people to consider or reconsider:
-PRO: getting low-interest loan. This has become more of a CON, since it's currently higher than 0.99%, and we're moving towards a higher-interest rate environment, compared to the last decade.
-PRO: inflation causing energy rates to rise. Since OP specifically mentions California, we know here the utilities raise energy rates annually with or without inflation. So still a PRO, but is there really any big argument change here? Possibly they will raise rates even more than before. But as they also raise the rates on natural gas, it kind of still pushes additional PRO arguments on solar electricity.

But the looming new CON that OP may not be aware of is of course the NEM 3.0 possibility. That could still negate out all the PRO arguments and then some. I do have a small 4 kw solar array so have been skimming the cream of the best ROI for the past decade, but have been considering adding a 5 kw array (smallest Tesla system size) and maybe Powerwall to offset the remainder of my net usage. But if the NEM 3.0 solar tax of $8/kw/month is enacted, paying that tax alone would be greater than paying my current electricity bill.

But there's a whole stickied thread here to talk about NEM 3.0 so I'll leave it at that...

 

[Xepa777]

The OP seems to bringing the topic up because the 30% tax credit is new. Yet that's not materially different than the 28% or 26% that has been the case for many years, but all those years nowhere close to everyone was rushing to get solar. So just by the tax credit alone, all the arguments for or against getting solar are unchanged from what's been debated here and elsewhere many times over.

He does bring up some of the classic debate points though, and it's actually here that some of the factors may have changed substantially, that would cause people to consider or reconsider:
-PRO: getting low-interest loan. This has become more of a CON, since it's currently higher than 0.99%, and we're moving towards a higher-interest rate environment, compared to the last decade.
-PRO: inflation causing energy rates to rise. Since OP specifically mentions California, we know here the utilities raise energy rates annually with or without inflation. So still a PRO, but is there really any big argument change here? Possibly they will raise rates even more than before. But as they also raise the rates on natural gas, it kind of still pushes additional PRO arguments on solar electricity.

But the looming new CON that OP may not be aware of is of course the NEM 3.0 possibility. That could still negate out all the PRO arguments and then some. I do have a small 4 kw solar array so have been skimming the cream of the best ROI for the past decade, but have been considering adding a 5 kw array (smallest Tesla system size) and maybe Powerwall to offset the remainder of my net usage. But if the NEM 3.0 solar tax of $8/kw/month is enacted, paying that tax alone would be greater than paying my current electricity bill.

But there's a whole stickied thread here to talk about NEM 3.0 so I'll leave it at that...

Yah I can get NEM 2 timeline stuff easily for my personal install. That’s the catalyst for this decision now.

I have multiple vendors giving me 0.99%, can send you over DM if you don’t believe lol.

 

[jjrandorin]

Yah I can get NEM 2 timeline stuff easily for my personal install. That’s the catalyst for this decision now.

I have multiple vendors giving me 0.99%, can send you over DM if you don’t believe lol.

Im not an expert on this, but I would suggest you verify with those vendors that its actually a loan at 0.99%, and not some sort of "effective" 0.99 percent because they have an escalation clause in there that says you have to repay the tax credit to them (as a bulk loan payment) or have the price go up.

For many companies that offered solar loans, thats the way they were structured (to build the payment of any tax credit back to them into the loan, after 12-18 months, otherwise trigger a payment increase escalation).

I know you PM med me a couple things but neither of them said or didnt say that, that I saw (and they wouldnt, until you looked at the terms and conditions of said loan).

I would recommend you look closely for that, in the specific terms and conditions for any loan that is a specific solar loan (that you might be getting from a solar company).

 

[tfan2018]

Yah, but factoring in opportunity cost and time value of money this definitely nets out better imo. If you were to go with emotions then getting power walls and disconnecting from the grid altogether is probably the preferred scenario lol.

agreed. it is similar to paying mortgage early vs emotion use case.

I would have jumped on that financing offer had I not missed checking the forums by a month lol

 

[holeydonut]

Im not an expert on this, but I would suggest you verify with those vendors that its actually a loan at 0.99%, and not some sort of "effective" 0.99 percent because they have an escalation clause in there that says you have to repay the tax credit to them (as a bulk loan payment) or have the price go up.

For many companies that offered solar loans, thats the way they were structured (to build the payment of any tax credit back to them into the loan, after 12-18 months, otherwise trigger a payment increase escalation).

I know you PM med me a couple things but neither of them said or didnt say that, that I saw (and they wouldnt, until you looked at the terms and conditions of said loan).

I would recommend you look closely for that, in the specific terms and conditions for any loan that is a specific solar loan (that you might be getting from a solar company).

Just an additional things to look out for with loans or leases.

1) Some vendors will offer loans with a hefty origination fee. So maybe the cash-only amount is $30,000 (like all in with all taxes, fees, etc). But then when the system is financed, they put in a $1,000 origination fee so the loan principal is $31,000. This $1,000 effectively becomes an implied interest to the loan. For example with Sunrun, I asked for quotes that were cash-only and financed. For the identical system, the financed principal was $1,000 higher than the cash-only quote. Sneaky.

2) Some vendors will offer loans with a early prepayment penalty or termination (aka disposition) fee. Basically if you pre-pay the loan you could get hit with a penalty. And on some leases there is actually a balloon fee for the privilege of having had the lease financing. If you've leased a vehicle through BMW Financial, you'll be very familiar with an example of a disposition fee. When you take that BMW back to the dealership after the lease, they'll say you owe like $350... but they'll gladly waive that $350 if you get a new BMW today. Sneaky.

 

[jjrandorin]

Yah, but factoring in opportunity cost and time value of money this definitely nets out better imo. If you were to go with emotions then getting power walls and disconnecting from the grid altogether is probably the preferred scenario lol.

Also, as a quick side note, its not possible to "get powerwalls (or other battery storage) and disconnect from the grid altogether" for the vast majority of people in california. Pretty much anyone currently on the grid, is not going to be able to get battery storage and disconnect from the grid altogether"

If you want to define "disconnect from the grid altogether" as " I am connected to the utility grid, but dont pull any power from them most / all of the time" then yes, thats possible (but that isnt disconnected from the grid, either).

If we go by the regular definition of "disconnect from the grid altogether" which would be "I called up the PGE / SCE / SDGE and told them to end my service and come get their meter off my property", unless you already live in a very rural area where that is the case currently, its not possible.

 

[h2ofun]

Also, as a quick side note, its not possible to "get powerwalls (or other battery storage) and disconnect from the grid altogether" for the vast majority of people in california. Pretty much anyone currently on the grid, is not going to be able to get battery storage and disconnect from the grid altogether"

If you want to define "disconnect from the grid altogether" as " I am connected to the utility grid, but dont pull any power from them most / all of the time" then yes, thats possible (but that isnt disconnected from the grid, either).

If we go by the regular definition of "disconnect from the grid altogether" which would be "I called up the PGE / SCE / SDGE and told them to end my service and come get their meter off my property", unless you already live in a very rural area where that is the case currently, its not possible.

I do not know ANYONE who has installed enough stuff to disconnect from the grid, legal or not. I have tons of solar and batteries, but with a 99% electric house, no way could I be 100% off grid during the winter, solar just does not make enough!!

 

[holeydonut]

I do not know ANYONE who has installed enough stuff to disconnect from the grid, legal or not. I have tons of solar and batteries, but with a 99% electric house, no way could I be 100% off grid during the winter, solar just does not make enough!!

I think with your generator, you're really close to grid defection. If you ever felt like running your home with the generator and batteries in parallel, you'd be able to disconnect from the grid. With the exception of the dude that has the Tesla Megapack and an absurdly sized solar array, most people who grid defect just keep a fossil fuel generator on standby for when solar isn't enough.

Although since you got SGIP batteries I don't actually now if you're allowed to grid defect in the up-front period since technically PG&E rate payers subsidized the ESS.

 

[BGbreeder]

Yah I can get NEM 2 timeline stuff easily for my personal install. That’s the catalyst for this decision now.

I have multiple vendors giving me 0.99%, can send you over DM if you don’t believe lol.

As the Federal funds 30 year rate is currently 3.138%, no rational and above board investor is going to loan money out at 0.99%. I'm not saying that you can't find a quoted teaser rate at that value, but I seriously doubt there is an all in APY of 0.99%. So, yes, I don't believe it, for a variety of reasons.

However, 3-5% is less than the current inflation, and a leveraged purchase may make sense for some folks, but that is an entirely different discussion.

All the best,

BG

 

[Electrph]

I do not know ANYONE who has installed enough stuff to disconnect from the grid, legal or not. I have tons of solar and batteries, but with a 99% electric house, no way could I be 100% off grid during the winter, solar just does not make enough!!

hi my name is Jason ... now you know me
My record for continuous off grid (pre PTO) was i believe 45 days or so ...
the caveats are I cannot just charge my model 3 anytime I want (when solar producing only ) and in summer on 100+ days house may get up to 78 F when i cannot run AC anymore at night ... also i would still need ng for heat / dryer ..
this is w/ 2 pw and modest solar (24 panels)
not a shack either modern single story 2800 sq ft home
if all those caveats are allowed then i could go off grid .. but of course much better for me on grid when i can charge when i want and run ac all i want and still net zero at true up