[montana]

Solar financing via Solar loan securitization or PACE bond securitization is the hot new consumer asset in asset-backed securities.

Mosaic just completed their initial securitization and SolarCity also just financed their fifth transaction.

As long as the solar loan providers are able to reduce the overall annual bills of the consumer, the consumer wins and will buy the loan product. The loan product interest rates may range from 3%-9% typically, but the actually installer who is selling the loan product isn’t getting 100 cents on the dollar when they sell the loan product, the originator is buying the contract between 85-95 cents which is required in order for the underlying equity investor to hit a 7-10% unlevered return depending on what coupon the installer is trying to sell to the consumer. The lower the interest rate, the lower the discount they will be able to achieve. Therefore wherever electricity is expensive, the loan products will continue to make sense and yes the installers will continue to make money, but they are not making 100% of the coin if it is financed through a loan product.

As more and more competition comes in, then ultimate winners will be the consumer as the sales and marketing companies and the installation companies will need to lower their margins in order to keep the business. As there is more and more competition in the ABS market, spreads will come in on the bonds that are being sold, allowing for either lower interest rates to the consumer or purchasing at a higher cost from the installers.

Just a few cents from the ABS market side of the house.

[montana]

We have a hummingbird who has claimed our pomegranate tree. We see fights almost every day for control of that tree.

[montana]

I finally cut the cable cord about two months ago and went with Sling TV. We already had an Apple TV but when we signed up we took the offer to get another Apple TV for $89. We haven’t looked back since. The majority of the channels that we enjoyed are offered on Sling TV and they carry ESPN, FS1, P12 networks so I have plenty of College Football to watch. We are saving about $100/month and throwing that towards other forms of entertainment with the girls instead of parking ourselves in front of the TV. We have the Apple TV’s hard wired in our house and currently get 50+ mbps download speed

[montana]

I installed three motorized solar shades and a motorized retractable awning a year ago. We love them.

Our house sits to the South East and has great views of Elfin Forest. Unfortunately, the sun blasts that side of the house in the morning and we frequently drew our shades. And then a week later we would remember that we had a great view and pull the shades up. Now, the exterior motorized shades are programmed (via remote and app) to come down at sunrise automatically (you can still see through the shade despite them being 95% solar shades) and then roll up around 1pm when the sun passes over the house.

The shades serve a purpose of preserving our view and ensuring that we see it every day as well as blocking all of the heat that used to enter the house. Our interior shades were only ‘slowing’ the heating of the house. Prior to the solar shades on a typical 85 degree August day, the A/C may kick on around 10 or 11am. Now with the shades, the A/C doesn’t kick in until later in the afternoon.

Our courtyard use to never get used during midday when it was in the mid 80’s as, now with the awning, it is a great place to relax midday. The awning rolls out around 11am and retracts around 5pm.

We have a few other large windows that we will most likely add motorized shades this year.

[montana]

My max is 31.54kWh with a 4.5kWh system. Just wrapped up the first year of solar last month and created 8200kWh with a total usage of 9700kWh, only paying SDGE for the difference of 1500kWh. Payback period on track for 5 years with 12% IRR after 10 years! Yeah!

[montana]

[quote=ljinvestor]So what was window manufacturer solution…no Low-E glass?[/quote]

The window manufacturer replaced the windows with Low-E glass, but the new windows were 3/16″ thick vs. 1/8″ in the original windows, as well as putting in “capillary insertion tubes”. The thicker glass reduces the “flex” of the window and significantly reduces the laser beam effect and the “capillary insertion tubes” help regulate the pressure in the double pane window to match that outside of the window. The reflection of the sun is now a perfect replica of the window vs. the laser beam that melted our turf and previously had burned a number of our plants/shrubs etc.

[montana]

We replaced all of our grass in our backyard with about 600 square feet of artificial turf last fall. We used Tiger Turf Marquee Pro Natural and we love it. My wife and girls now spend 2-3x more outside because it is hardly ever wet, never muddy, no bugs, etc. (I have a very picky five year old).

We had our landscape contractor perform the work and he did fine. However, he had not installed turf in a backyard where he had to worry about Low-E reflective windows. The day after install I had four or five melted streaks across the yard as the sun reflection from my windows was coming back in a laser beam and melting the turf. The turf itself can withstand 240 degrees!

After a long four month battle, my window manufacturer replaced half of my windows in my house for free (no more laser beams), the turf store provided new turf for free, and my contractor re-installed for free.

Initially I thought I was paying a little more than I wanted to spend, but after all that I went through with the melted turf which ended up not costing me an additional dime, I am fine with the original amount!

At the time, we qualified for the SoCal water rebate. As another posted stated, take the relevant pictures and get approved prior to starting the program. We ended up with a $2300 check where we replaced turf with artificial turf and other plants/shrubs.

We now save $80/month on a gardner and probabaly $40/month on water, so it will breakeven in ~4 years with a +/-20% IRR after 10 years. No brainer for us.
[img_assist|nid=20814|title=Artificial Turf|desc=|link=node|align=left|width=100|height=75]

[montana]

We made the decision to cut water by tearing out our turf last fall and installed artificial turf with drought resistant plants all on a drip system. The kids love the turf, no dirt, mud or bugs, and I just saved $1k a year in a gardener. If 50% of our water usage was used for landscaping previously, I have easily cut that amount in half if not further by tearing out the turf and installing an efficient drip system. I also bought a new motion sensing kitchen faucet which is awesome which has reduced a lot of previously wasted water.

Frankly I’m irritated that it has taken so long to have the governor issue the water restrictions, these should have been put in place at least a year ago. And unfortunately, most people I talk to really have no idea the situation that we are in and just feel entitled to having water. Raising water rates significantly will be the only way you really get the whole states attentions, but the actual water use rates on your water bill are only a portion of your water bill. There are so many fixed costs of sewer and pumping station charges that mask the water usage charge. Doubling water rates wouldn’t be dramatic, but doubling your total bill may catch somebody’s attention.

[montana]

[quote=spdrun]I mostly agree, but I do think that banks/servicers should show some compassion when exigent circumstances arise.[/quote]

I completely disagree. A borrower signs a note that explains exactly what they are agreeing to. If they fail to meet their end of the bargain then why should there be compassion? The bank, investor or lender has provided their capital for a mortgage, auto, credit card or student loan and they get to dictate the terms of the agreement. They underwrite the credit and if the borrower fails to perform they seize the collateral and send you to collections. A borrower should be prepared for exigent circumstances, they should have a cash reserve that can get them through any hard times, i.e. loss of job, etc.

I’m tired of the whining and complaining of the “predatory” lenders, especially in today’s environment how everybody is underwritten. I didn’t buy my first home until I could afford one. I put 20% down and had another 20% sitting around in cash and equivalents. I had no auto loans, student loans, or credit card debt. I have a HELOC that is not drawn upon. People need to be fiscally responsible and not ask to borrow money unless they are willing to pay for it. If you are a bad credit, be ready for high rates and high origination fees as the lender needs to ensure to cover for your sorry ass when you default.

If you want somebody to help you out for making a bad decision and get through a tough time, go to your family and friends. There is no need for a lender to provide compassion, they are in the business of creating margin, not losses. A servicer is engaged by the lender to perform their role, collect payments and produce a statement, not to listen to sob stories.

[montana]

We received the tax credit immediately within the pricing of the prepaid lease. We did the lease in April, so therefore pulled the tax credit forward about a year and didn’t have to file any paperwork or wait for the govt to issue my tax credit.

[montana]

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.

[montana]

We pay $90 a visit for our housekeeper who comes every two weeks and spends 5-6 hours to clean the entire house. 3600 sq feet, 5 bedrooms, 4.5 baths.

[montana]

I have an IRA at E Trade. When a previous colleague of mine started his own company and looking for angel money, I provided an investment into his LLC with some cash of my own, and then an investment from my IRA. This way I was able to diversify my risk with cash and funds that I don’t have access to for a number of years. E Trade acts as the Custodian, charges me an annual fee, and prepares a tax return for me based upon the K1 that the IRA receives. They have since stopped providing this service, but the annual fees are low so I haven’t looked to transfer the investment to another custodian.

[montana]

[quote=evolusd][quote=montana]Just on my street only, which was built out in 2006, only 1/3 of the original homeowners remain. Both my neighbor and I pick up what we believe were incredible deals on short sales when looking at the price per square foot. After factoring in the present value of future mello roos payments, we still purchased well below the then current (and now) market value of the homes that sold without taking into account the present value of future mello roos payments.

I think there are still a number of people that will walk away, I just think that the majority have already done so in SEH.[/quote]

Montana – I’m curious. Where do you get information on the specifics of the bond to calculate the PV of the payments?

That’s a good way to compare the new homes with no MR to the existing resales that have MR.[/quote]

Evolusd –

The specifics of the bonds that were issued for SEH can be found on the City of San Marcos website in the Community Facilities Districts section found here:

http://www.ci.san-marcos.ca.us/index.aspx?page=54

Click on CFD 99-01 to download the PDF that has each improvement area (neighborhood) and specific information for the terms of the bonds, including the maximum amount that could be charged on an annual basis.

To find the current CFD charged for a neighborhood, just check out City of San Diego Treasurer – Tax Collector website and lookup any address or street to look into the current property taxes.

Now that you have the current bond payment and the maximum bond payment and the bond maturity, you can calculate the PV of your payments and be able to compare homes with mello roos and those without mello roos and make a good educated decision.

[montana]

[quote=ice9]montana – how extensive are the trails you can access from SEH? Just looking for a rough idea… a few miles, 10, 20, more?[/quote]

Just from SEH, there are 18 miles of walking and hiking trails. One of favorites is running the Ridge Line Trail. A short drive down Elfin Forest Road is the Elfin Forest Recreation Reserve with another 11 miles of trails.

[Author]

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