When I went through the solar analysis and due diligence, I vetted Solar City, Sunrun, and Sungevity. After careful analysis and consideration, I chose not to buy or to do a Power Purchase Agreement (PPA), but rather a Lease. We then made the determination to do a prepaid lease vs. a monthly lease for 20 years.
A few considerations that we took into account in deciding to go with a prepaid lease:
-If we were ever to sell our home, we wouldn’t have to ensure the new buyer could get credit approved to have the lease assigned to them.
-If we were ever to sell our home, we assumed a buyer may be more comfortable with a lease vs. a owned unit if they no little about solar.
-If anything goes wrong with the panels, inverter, etc., the lessor will address.
-We expect to be in our home at least another 10 years and our break even point is 5.5 years, our 10 year base case returns are expected to be 10%, our 20 year base case returns are expected to be 16.5%, and our 20 year cost is $0.08/kWh.
-If I ever refer somebody to Sungevity, they have the best referral bonus, of $1000. One referral pops my 10 year return to 12%.
-The effective interest rate for a monthly lease ends up being 7-8%, which was too rich for me and turns the analysis into an NPV play vs. an IRR play which I was focused on the latter to increase the return on my investment.
If I were to rate the different companies, I would have given Sungevity 4/5 stars, Solar City 3.5/5, and Sunrun 3/5. Sungevity didn’t blow me away, but they got the job done. They contract with Mulholland Electric who is a locally family owned SD company for installation which did a great job. I definitely would recommend their installation.
