Leasing solar panels-a good deal?

[kcal09]

Does anybody have experience in leasing solar panels instead of buying? There are a few companies which allow homeowners to lease them for 20 years.
Any comments would be appreciated.

[ocrenter]

I recently checked into it, the lease was for 20 years, at rate of 7.5%.

It would make more sense to simply get a HELOC at 3% and purchase the system or “prepay the lease”.

Also, the electric bill is tiered, 15-17 cents for the first 450 kwh, 27-29 cents for anything after that. The solar companies will always quote you a system that would cover the entire bill. You may want to get a system that simply cover your usage past the 450 kwh mark.

[an]

I recently checked into solar buy vs lease (monthly and pre-pay). I end up going with buying. I ruled out monthly leasing early on, because it’s super expensive when you add it all up. It’s only good if you have no cash. If you do have cash, I would suggest one of the other two options. The reason I buy is because:
1) it’s mine, so after 20 years, I don’t have to give it back or buy it out (who knows what the price they set then). So, if the system actually stay functioning well past 25 years (since that’s when its warranty ends), then your average monthly cost would be lower.
2) flexibility. If you sell the house, you don’t have to worry about buying out the system. If you don’t have the money to buy out the system, you’d have to make sure the buyer would want to take over your lease and is qualified (credit wise) to take over the lease. I don’t think you can buy out the system early. IIRC, you have two times to buy it out, either at 7 years or 20 years. You have to pick that date ahead of time.
3) you’re locked into the current technology. Solar, like any other technology, I expect to improve over time and get cheaper. If this holds true, 10 years from now, I can sell my panel on craigslist and buy new, more efficient panel. Especially if my usage goes up. You can’t do this with leasing.

Now, the pro for leasing are:
1) no worry about maintenance (although I’ve talked to a couple honest sales guy and they said they haven’t had a service call ever).
2) no up front cost for monthly lease and lower than buy price (after all rebate) if you do prepay. Prepay was around $1-2k cheaper. However, you still have to buy out the system at a later date. So, the total cost would most likely be more expensive than buy.

[moneymaker]

I remember seeing a piece on Bloomberg where they interviewed 2 guys that were running one of these companies. It seemed pretty obvious to me that they were just in it to charge the high interest rates, effectively setting up there own little loan operation with the panels as collateral. Probably better to buy outright if you can afford it. I would love to go solar, but even at todays low loan rates I think the utility companies can buy the electricity back at lower rates than they are charging the higher consumers. In other words I don’t think it really pencils out unless you have a high usage and can pay cash. So the rich and the marijuana growers benefit, as for the rest of us, we will have to wait. If I ever get a C-10 license then I will install my own, by then the ones they sell @ Costco should have the independent charge controllers.

[CA renter]

AN,

Did you already get the panels installed? If so, what did you think of the installer, installation process, and the system, in general?

Would you mind providing details as to the size, type of inverter, price, etc.?

We would really LOVE to get solar panels, but are worried about the manufacturer/installer going out of business well before the 25 year warranty runs out (did you get insurance to cover this event, or just not worried about it?).

Thanks in advance! 🙂

[no_such_reality]

My installers did a great job. I’d recommend them to anyone. A tad expensive though. But, got my bill yesterday, had the AC set at 75 24 hours a day for the last month when the average high was 95 and average low was 74 at our house. The bill was $0.92

Which is what the bill is every month even though we have been running a large generation credit. This last month we did dip into the generation credit. SCE still owe me a few hundred dollars on credit though.

One additional thing to think of on the lease, if you want to sell the home, you either have to buy out the lease or the new buyers have to take the lease.

Since I expect electrical rates to continue to rise, and rise dramatically, it probably will not deter them too much. It’s just an extra hassle factor that will raise more questions for buyers though.

[an]

I didn’t get it installed yet. We’re waiting for permits from the city. Should have it install in the next couple of weeks though (hoping). So, I can’t speak about the installer’s quality. Although, they’re not your fly by night shop. They actually did large jobs for SDG&E and the city. So, I’m hoping they’ll be around. Their workmanship warranty is 10 years, while the manufacture warranty is 25 years. I pick brand name panels (Sharp), so, it’s not likely that Sharp will go out of business. They’re too diverse to sink like other solar only companies.

Their price is also the lowest, without ANY haggling. So, if you want this contact, I’d gladly give it to you. The system I got is 15 x 240W panels. So, it’s a 3.6kWh system. I would get bigger, but the way my roof is, I can only fit 15 panels. I went with the Enphase micro-inverter because if I don’t, then I won’t be able to have 15 panels. IIRC, the max I could have w/out micro-inverter is 12 (they go in sets of 4). Price wise, it will be around $10.8k after all the credits. It “should” produce about 430kWh a month. I’m currently using between 700-1100kWh a month, so it would put me mostly in tier 1 and 2 and during the summer months, tier 3. I did a rough estimate of how much my bill would be w/ solar and I’m seeing myself saving between 100-200/month. So, assuming SDG&E doesn’t increase their rates, my saving is ~$1800/year. So, it would take 6 years to break even. Then everything after that is gravy. Now, if SDG&E raise their rate, my break even will come even faster.

Due to my roof position and the max 15 panels, buying makes more sense. If, 10 years from now, they come up with panels that are 2x as efficient, then I can just buy the panel, have some electrician to come out and replace it. Then sell the old one. I wouldn’t really need to pull permits, since it’s just swapping one for another. That would allow solar to cover even more of my bills. Leasing would not give me that option.

[hillsilly]

I also looked into this right after the NY Times ran an article (“Here Comes The Sell” 8/12/12) on the trend towards renting systems to homeowners.

I got a quote from one of the big outfits. In the end, I decided I didn’t want to trade away my federal tax credit (30%) and utility rebate (varied by company) in order to have them installed “free of charge.” Turned out I’d be sending a check to the solar lease company instead of my utility. Their projection on the increase of electric rates seemed a little inflated. We concluded it’s best to buy them outright if you have the cash. Our monthly electric bill was too small to make the ROI pencil out– for now.

I look forward to AN’s update!

[Aecetia]

I agree with AN’s recommendation to use a brand name manufacturer like Sharp that has a track record. Some of the school districts have had to have Chinese made panels removed due to defects: http://www.utsandiego.com/news/2012/sep/14/tp-flawed-solar-panels-removed-at-schools/

As always do your due dilligence.

[CA renter]

AN and NSR,

Thanks for your posts! Would love to hear how you feel about the installers and installation project once it’s done, AN. Some friends of ours had solar panels installed and the roof leaked. They did come out to fix it, but that story makes me nervous. Also heard stories about them taking weeks to do the installation. We’d prefer to get them in and done as quickly as possilbe.

We’re heavy users because of our pool (old pumps) and A/C which have doubled or tripled our SDG&E bills compared to what we were paying in our rental. This house had higher bills in some months when it was empty vs. our rental house with 5 of us living there. Called SDG&E to ask if it could be the meter, but they refuse to come out and check it. Need solar panels!

Thanks so much for your input!

[Aecetia]

Our roof leaked and they blamed the roof. Not kidding, but the bottom line is they have to fix it because they signed a 10 year warranty on workmanship and you can always go after them to the Contractors’ License Board. However, if they go out of business, I guess that is another problem, so pick a reputable company and make sure you ask for references where you can talk to the people where they did the installation.

[UCGal]

We haven’t put in panels because it just doesn’t pencil out yet. Some of the factors in our decision:

– We barely break out of the lowest rates. We have no AC or Pooln no incandescent bulbs (LED or CFL), so that’s probably why. This will change if we ever buy in a plug in hybrid car.

– We are 15 years into a 30 year roof. When it comes time to replace the roof you have to take the panels off, then reinstall them after the new roof is put on. This is a biggy. If you have a tile roof – this is less of an issue… but we have the old school asphalt shingle.

So… In about 10 years we’ll look at getting a plug in car, after we get a new roof. And we’ll get panels at that point.

It’s fun talking to the sales folks. (They come door to door in our neighborhood). They make claims, and I show them our bill… and they grudgingly admit it doesn’t work for us.

[treehugger]

Trying to figure out if it is worth it. We are in process of researching a pool, but not sure how the solar helps off-set the cost if the pool/spa heater is gas? From what everyone we have talked with says the new pumps are so efficient they don’t use a lot of electricity. I had thought a pool was expensive, but apparently only if I heat it?

I would really love to embrace alternative energy and think everyone in sunny places should have solar, eventually the economy of scale would make them as realistic for everyone as a normal roof. Unfortunately, it seems it is just some scheme to make money and the installation companies are not out to help me and the environment. Whatever, I am fine with making a buck, but have been unable to really understand the details.

Can anyone explain how it will help off-set the cost of a pool?

[UCGal]

[quote=treehugger]Trying to figure out if it is worth it. We are in process of researching a pool, but not sure how the solar helps off-set the cost if the pool/spa heater is gas? From what everyone we have talked with says the new pumps are so efficient they don’t use a lot of electricity. I had thought a pool was expensive, but apparently only if I heat it?
[/quote]

Maybe all my friends have older pump systems… It’s the pump costs that are the issue.

[an]

[quote=UCGal][quote=treehugger]Trying to figure out if it is worth it. We are in process of researching a pool, but not sure how the solar helps off-set the cost if the pool/spa heater is gas? From what everyone we have talked with says the new pumps are so efficient they don’t use a lot of electricity. I had thought a pool was expensive, but apparently only if I heat it?
[/quote]

Maybe all my friends have older pump systems… It’s the pump costs that are the issue.[/quote]
Yep, it’s the pump that matter. When we first bought the house, it came with a 1.5HP single speed pump. So it always run at full power. During the summer, you don’t really want the water to sit idle mid-day. That’s just asking for algae to grow. So, you use a lot of power when you have to run ~6 hrs. durning the summer months. My first 2 months electricity bill was HUGE. I then immediately bought a variable speed pump. Now, I run my pump at slow speed (I think it comes out to be about 1/2HP) for 12 hrs. and I just A LOT less electricity. It’s only when I want to use to pool (heating it up to 90-93 degrees) where the bill went up. Not only because of the gas that’s needed to run the pool heater, but I need to turn on pool pump to Max power, so the water would turn over much quicker and the entire pool would be at the desirable temperature quicker.

To show you how little the new variable speed pool pump uses, during the months where I don’t use AC and have no Christmas lights, my usage is around mid 600kWh/month. With Christmas light, it jumps to 800kWh and during the summer where my AC runs 24/7 at 73 degrees, it gets to about 1100 kWh. Keep in mind that I have people home all day long and my computer is on 24/7 and my TV is on a lot too. I’m not sure how much you use, but my parents’ usage is in the mid 400kWh, and they only use power 3-5 hrs. during the weekday.

[Author]

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