We're Going Solar: Lease or PPA?

[InTheShadows]

I agree. I'd make a way to purchase. After a number of years, it will have paid for itself. I'm almost there, but only a little slow as I overbuilt before my first Tesla arrived almost five years ago. I think in one more year - all will be free, forever.

I also agree with Tesla940. These things don't break much. I did have my panels "professionally" washed twice for like $100 times each. If they were easier to get to, i'd do them myself. But only every 2-3 years. My first inverter did broke, but it was under warranty. The panels themselves are warrantied for 25 years.

We have been installing solar over 5 years. Excluding micro inverters we have had 1 system we needed to work on after it was commissioned. And that was a defective disconnect switch, which isn't solar specific, it was the same switch that's also used for AC units, hot tubs, and pools. It went bad within 1 month of service.

We had one inverter that arrived DOA.

 

[simplesolar]

Guys glad I found this thread and hopefully someone can help me out... I've got a quote from SolarCity yesterday for SolarPPA and they quoted me $0.23 / kWh. That seemed very high to me. Am I getting ripped off? I should add that it's a 6.75kw DC panel with 0% escalation. What do you guys think?

at $.23 /kwh that is a rip off! I totally agree with Theshadows. There are a lot of solar installer out there who only pushes lease because it is the easiest thing to sell. They don't provide a cost anaylsis or other creative solution such as HELOC to get people to own solar. Owning is the true way to save $$.

 

[AmpedUP]

We're waiting for our shingle roof to wear out (we are East coast) and then we are going to go with solar shingles. 'Hoping by that time more efficient than today, and cheaper, too.

 

[Andrew]

Based on everyone's comments above suggesting we buy the system outright, I went back to RGS and asked about pricing. After incentives, we are looking at a total cost of about $16,600 for this 5.25kW system. With 2.9% financing over 12 years, that translates to a monthly payment of $137.60, with total payments of $19,814.

Yes, that's significantly less than the 20-year PPA cost (~$27,000). BUT, we're also not sure how long we're going to be in our house. For my estimates, I've been using the round number of 10 years. After 10 years, we would have made $16,512 in payments on the purchase, or ~$12,340 on the PPA.

If we do sell the house after 10 years, I think either solar system will certainly be a good selling point to attract buyers, but I don't think a fully-owned system (vs. the PPA with good rates) will actually add any more to the selling price of the house. (It would have to be at least $4,000 more to be break-even, too.)

Ultimately, either choice is probably a good way to go, and I'm very excited to start driving on sunshine!

 

[InTheShadows]

We're waiting for our shingle roof to wear out (we are East coast) and then we are going to go with solar shingles. 'Hoping by that time more efficient than today, and cheaper, too.

Not worth it IMO. solar shingles are way complicated to install. Each individual shingle has an electrical connection. That is, more points of failure. If some go bad you have to dead the whole string because you would have to remove half the roof to troubleshoot it.

Also solar shingles use thin film technology which is half as efficient as crystalline.

Also they do not authorize solar installers to install the systems, they only authorize roofing contractors, which almost none know even the slightest thing about solar. (This is for DOW shingles, IIRC they are the only company doing solar shingles right now.)

 

[simplesolar]

Based on everyone's comments above suggesting we buy the system outright, I went back to RGS and asked about pricing. After incentives, we are looking at a total cost of about $16,600 for this 5.25kW system. With 2.9% financing over 12 years, that translates to a monthly payment of $137.60, with total payments of $19,814.

Yes, that's significantly less than the 20-year PPA cost (~$27,000). BUT, we're also not sure how long we're going to be in our house. For my estimates, I've been using the round number of 10 years. After 10 years, we would have made $16,512 in payments on the purchase, or ~$12,340 on the PPA.

If we do sell the house after 10 years, I think either solar system will certainly be a good selling point to attract buyers, but I don't think a fully-owned system (vs. the PPA with good rates) will actually add any more to the selling price of the house. (It would have to be at least $4,000 more to be break-even, too.)

Ultimately, either choice is probably a good way to go, and I'm very excited to start driving on sunshine!

What you're not factoring is the penalty you have to pay if move or sell the house in 10 years and the new homeowners does not take the system. Unless there are none, buying is still better. Also shop around more, $16,600 is definitely on the higher side for a 5.25kw system.

 

[Owner]

Another odd related factor to consider is moving in California will reset your property taxes to a new level. There is a "generally" huge advantage long term to staying in a home in CA once you are satisfied. Seems like you like your home a lot if you are saying 10 years. If you said say 5, you would probably be moving in the short term. Folks who say 10 are more likely to stay forever.

Also if you can afford to along the length of the loan to pay it off early, you will see the benefits of free electricity faster. I'd make sure the loan has no pre-payment penalty.

I think as more and more people understand the benefits of a solar system, the housing price will reflect that. Particularly in an eco-aware town like Santa Monica.

Based on everyone's comments above suggesting we buy the system outright, I went back to RGS and asked about pricing. After incentives, we are looking at a total cost of about $16,600 for this 5.25kW system. With 2.9% financing over 12 years, that translates to a monthly payment of $137.60, with total payments of $19,814.

Yes, that's significantly less than the 20-year PPA cost (~$27,000). BUT, we're also not sure how long we're going to be in our house. For my estimates, I've been using the round number of 10 years. After 10 years, we would have made $16,512 in payments on the purchase, or ~$12,340 on the PPA.

If we do sell the house after 10 years, I think either solar system will certainly be a good selling point to attract buyers, but I don't think a fully-owned system (vs. the PPA with good rates) will actually add any more to the selling price of the house. (It would have to be at least $4,000 more to be break-even, too.)

Ultimately, either choice is probably a good way to go, and I'm very excited to start driving on sunshine!

 

[tlloyd]

Sounds like good responses for someone with solar questions. I have been contemplating getting solar for my house for some time, but am clueless. If someone could advise me a little I would appreciate it. I have a guy bugging me from vivintsolar who wants to get me into a 20 year PPA at .15/kwh with 2.9% escalation.

I don't know what you all would need to know except the fact that my SCE bill is about 4 times all of my neighbors. I do have a pool, but from there it must be the kids and lights on all the time. I have an 1800 square foot single story house and the guy said the panels would go in the back yard which is good. I just put a new roof on too. I plan on staying at my house for the long haul (I am 45 years old).

Background: Southern California Edison (I live in Orange, Ca). I went to a flex pay plan since my bill is anywhere from $350-$700 a month. I pay about $420 on my flex pay. Looking at my bill my daily average usage (kwh) is about 44 kwh per day. This month total is 1377kwh.

I have 304kwh in Tier 1 @ .13cents, 91kwh in Tier 2 @ .16cents, 213kwh in Tier 3 @ .28cents, and 769kwh in Tier 4 @ .32 cents.

It seems it would make sense to go solar, but it does get confusing looking up the information about buying vs leasing vs PPA. The biggest factors for me would be committing to 20 years and if something happens and I need to get out it would cost me a fortune. Alternatively I would assume when buying one has to figure the panels would be "out of date" within no time like buying a new computer. Also whatever maintenance or costs to fix any issues would be on me. Would that not be expensive and after say 10 years or so would parts be available without paying a lot?

I would love some advice as to what questions I should ask the sales guy or also thoughts on this PPA vs buying. I could easily get an equity line of credit and maybe purchase a system, but since I know nothing about it I don't want to get over my head and regret it in a few years. Are my savings buying vs PPA that much to where I would see a difference in the near term.


Thanks for reading the confusion

 

[bart513]

Solar City Proposal

This is info that I got from Solar City to install. I guess there is no out of pocket cost on the lease? My biggest concern other than getting the best product at the best price is not knowing if I'm going to stay in the house for more than 10 years? Any feedback would be helpful. If these attachments can't be opened please PM me your email address. Thanks!
View attachment Eric Bartky SolarCity proposal 10.5 kwh.pdfView attachment Residential Storage FAQ 11-11-2013.pdf

 

[Andrew]

Update!

Because of the persuasive opinions in this thread (thank you!), I decided to purchase the system instead of a lease or PPA! There were three big factors that changed my mind:

First, the system is ours to do with whatever we want; we'll be able to expand it, move it to a different house, whatever, and that will make selling our home much easier (no contingencies on whether the buyers can assume the existing solar agreement, the panels will simply be a part of the sale).

Second, our total commitment (after incentives) will be in the range of $15,000 (without financing). If we did a lease or PPA, our total commitment was in the range of $27,000. So by buying, we significantly reduced the overall commitment, making it a far less intimidating decision. (I know we'll need to replace our inverter in ~10 years, but I figure by then they'll be smaller and less expensive... and maybe even more efficient.)

Third, the local installation company (that was offering the Sun Power lease) also sells SolarWorld panels. They gave us an excellent price, and I'm happy to be buying high-quality, monocrystalline panels made in America - and supporting a small, local business at the same time. I anticipate SolarWorld will be around a long time and will be there to honor any warranty issues, and the installer has a good track record as well (they installed my parents' solar pool panels about 15 years ago).

On Monday they're going to install the roof mounting posts, and then we're going to put GacoRoof silicone sealant on the entire roof. Then they'll be back to install the panels later this month. Hooray!

Thanks again for your info and help - I'm truly grateful.

- - - Updated - - -

This is info that I got from Solar City to install. I guess there is no out of pocket cost on the lease? My biggest concern other than getting the best product at the best price is not knowing if I'm going to stay in the house for more than 10 years? Any feedback would be helpful. If these attachments can't be opened please PM me your email address. Thanks!
View attachment 42020View attachment 42021

Assuming the lease terms in NY are similar to what I saw in CA, the pricing is significantly better than what I was offered here in Santa Monica (NY State incentives?). Solar City was offering me 16.4 cents/kWh on the lease, which would have meant $113/month (plus an annual 2.9% escalation) for a 5.25kW system. Looks like this is a system twice the size for $137/month. (Your estimated production isn't doubled, though -- My 5.25kW system was estimated to produce ~8,000kWh/year. Yay Southern California!) And yes, it was no out-of-pocket; my first bill was just going to be due after they energized the system.

Do be careful of the annual escalators. Plug that in to my spreadsheet and you'll easily be able to tell how much that will be after 20 years. http://andrewwilder.com/solar_cost_calculator.xls

Also, once you do the credit check they'll give you the full lease agreement to sign. Read it VERY VERY carefully!! There's a lot of language in there that favors Solar City, especially with regards to the power performance guarantee and what your options are when you sell your house.

Hope that helps!

 

[InTheShadows]

Awesome Andrew! I'm so excited for you and I know you made the right decision.

 

[Owner]

CONGRATULATIONS! :biggrin:

I'm excited for you. Glad to have company here in solar land.

I'm glad we were all able to help and convince you. I've always been a bit fan of buying things out right. I had been wondering what you had decided, so thanks for letting us know.

 

[bart513]

Andrew thank you for starting this process. It was very helpful for me to read. I will plug the numbers into your spreadsheet and see what happens. Also Shadow has been very helpful.

 

[simplesolar]

Great job. You wallet will thank you down the road vs leasing!!

Because of the persuasive opinions in this thread (thank you!), I decided to purchase the system instead of a lease or PPA! There were three big factors that changed my mind:

First, the system is ours to do with whatever we want; we'll be able to expand it, move it to a different house, whatever, and that will make selling our home much easier (no contingencies on whether the buyers can assume the existing solar agreement, the panels will simply be a part of the sale).

Second, our total commitment (after incentives) will be in the range of $15,000 (without financing). If we did a lease or PPA, our total commitment was in the range of $27,000. So by buying, we significantly reduced the overall commitment, making it a far less intimidating decision. (I know we'll need to replace our inverter in ~10 years, but I figure by then they'll be smaller and less expensive... and maybe even more efficient.)

Third, the local installation company (that was offering the Sun Power lease) also sells SolarWorld panels. They gave us an excellent price, and I'm happy to be buying high-quality, monocrystalline panels made in America - and supporting a small, local business at the same time. I anticipate SolarWorld will be around a long time and will be there to honor any warranty issues, and the installer has a good track record as well (they installed my parents' solar pool panels about 15 years ago).

On Monday they're going to install the roof mounting posts, and then we're going to put GacoRoof silicone sealant on the entire roof. Then they'll be back to install the panels later this month. Hooray!

Thanks again for your info and help - I'm truly grateful.

- - - Updated - - -



Assuming the lease terms in NY are similar to what I saw in CA, the pricing is significantly better than what I was offered here in Santa Monica (NY State incentives?). Solar City was offering me 16.4 cents/kWh on the lease, which would have meant $113/month (plus an annual 2.9% escalation) for a 5.25kW system. Looks like this is a system twice the size for $137/month. (Your estimated production isn't doubled, though -- My 5.25kW system was estimated to produce ~8,000kWh/year. Yay Southern California!) And yes, it was no out-of-pocket; my first bill was just going to be due after they energized the system.

Do be careful of the annual escalators. Plug that in to my spreadsheet and you'll easily be able to tell how much that will be after 20 years. http://andrewwilder.com/solar_cost_calculator.xls

Also, once you do the credit check they'll give you the full lease agreement to sign. Read it VERY VERY carefully!! There's a lot of language in there that favors Solar City, especially with regards to the power performance guarantee and what your options are when you sell your house.

Hope that helps!

 

[772]

Congrats Andrew! We are also considering installing a PV system in our home in Ohio this spring and this thread has definitely made purchasing the more compelling option. However, I would like to know how you arrived at choosing the PV system dealer/installer for your home. I understand that PV is much more popular in CA than OH (so you'll have many more experienced installers, I'm sure). I don't know anyone who has PV in our neighborhood, maybe not even our whole town. We're planning to go for this around April, and I'd like to start looking around for reputable installers in the Northeast Ohio area. I would appreciate any advice on how to get started. Thanks!

 

[nwdiver]

Congrats Andrew! We are also considering installing a PV system in our home in Ohio this spring and this thread has definitely made purchasing the more compelling option. However, I would like to know how you arrived at choosing the PV system dealer/installer for your home. I understand that PV is much more popular in CA than OH (so you'll have many more experienced installers, I'm sure). I don't know anyone who has PV in our neighborhood, maybe not even our whole town. We're planning to go for this around April, and I'd like to start looking around for reputable installers in the Northeast Ohio area. I would appreciate any advice on how to get started. Thanks!

Depending on the installers in your area and your comfort level at taking on a new project you may be able to save A LOT of money by "sub-contracting" the installation. The actual panel racking is easy... it's the final wiring and mount installation that can be tricky; I hired roofers and electricians to do that for me and saved ~$15k over getting everything installed by my local solar installer.

 

[InTheShadows]

Congrats Andrew! We are also considering installing a PV system in our home in Ohio this spring and this thread has definitely made purchasing the more compelling option. However, I would like to know how you arrived at choosing the PV system dealer/installer for your home. I understand that PV is much more popular in CA than OH (so you'll have many more experienced installers, I'm sure). I don't know anyone who has PV in our neighborhood, maybe not even our whole town. We're planning to go for this around April, and I'd like to start looking around for reputable installers in the Northeast Ohio area. I would appreciate any advice on how to get started. Thanks!

Go to NABCEP.org and search for installers that have been certified in your area. We have random inspections, training, a grueling exam, continuing Ed, and a code of ethics we must maintain to keep our certifications current.

 

[Andrew]

Congrats Andrew! We are also considering installing a PV system in our home in Ohio this spring and this thread has definitely made purchasing the more compelling option. However, I would like to know how you arrived at choosing the PV system dealer/installer for your home. I understand that PV is much more popular in CA than OH (so you'll have many more experienced installers, I'm sure). I don't know anyone who has PV in our neighborhood, maybe not even our whole town. We're planning to go for this around April, and I'd like to start looking around for reputable installers in the Northeast Ohio area. I would appreciate any advice on how to get started. Thanks!

Hey 772! I can't really speak to finding a local Ohio company (other than to suggest Google, Yelp, and SolarReviews.com...and maybe Angie's list?), but to answer your question here's the process I ended up going through:

1. Saw a Solar City rep at Home Depot and, although I wasn't really intending on getting solar YET, I chatted with him for a few minutes. He came over for a visit later in the week and gave me a quote.

2. Decided to shop around as well. I found Solar Forward, a local installer (that only installs Sun Power panels, it turns out), through Google and positive Yelp reviews.

3. My dad had recently gotten a quote from Solar Unlimited, a (small) local installer here in LA. They installed my parents' solar pool panels about 15 years ago, so they've been around for awhile (something worth considering...there are lots of solar startups now, with unproven track records).

4. I also got quotes from Sungevity and Real Goods Solar. Found both of them just by Googling (though I had heard of both before; I remember shopping from the Real Goods Catalog when I was in high school!).

5. Ended up being very honest with each company, going back and forth and telling them the prices I was getting. Prices varied substantially. I had decided to go with Real Goods Solar for the PPA, but then the smart people in this thread convinced me I should really consider buying. At the same time, Solar Unlimited came back with a PPA price that beat RGS -- and with better panels, made in America (SolarWorld vs. Canadian Solar)... After all that, I just decided to buy the system outright from Solar Unlimited.

Solar Unlimited is an installer for SolarWorld Panels and SMA Inverters- so it's up to them to do the installation correctly. If there are any warranty claims, they'll be the middleman between myself and SolarWorld or SMA (and presumably do any warranty work and be paid by SolarWorld/SMA). For the larger companies, you might not know what panels or inverter you're getting... doesn't matter as much for a PPA, but for a purchase it certainly does!

Hope that helps?

 

[772]

Yes, thanks a lot Andrew. I'm just starting to go through all this and it is very helpful!

@theshadows Thank you... I will look at that website.

 

[30seconds]

Update: this post was moved from another, less relevant thread. Now that I've read this thread and become a bit more informed please ignore


---------------------------------------------------------------
ORIGINAL

looking for a little advice here. We are planning an extensive renovation over the latter half of 2014 of our house and I would like to include solar. According to PG&E (NorCal) we are up to about 700-800kWh / month.

I'm leaning towards buying a system vs. leasing. I'm also more interested in understanding what are the current technology trends b/c we plan on living in this house for the next 2-3 decades and I'd like to make a reasonable short vs long term trade off.

We have plenty of roof with various areas that face in every direction.

Any suggestions on where to start?

----------------------------------------