Profile picture for danchris89

We live in Orange County, NY and received a proposal from Solar City to lease their solar system

The cost of the lease is $139/month for 20 yrs, increasing $4.00/month/per yr.  Our electric company currently has us budgeted at $335/month. Solar City proposal estimates a savings of roughly 42% of the $335 for an estimated net cost of $40/month including the lease.  Is this worth it and, will it increase the value of our house?  Thanks.

Dan

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June 01 2013 - Town of Chester
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Profile picture for RayBoggs

Unfortunately $139/month for 20 years isn't your true cost. You neglected to factor in the 30% federal tax credit that you're handing over as a down payment. There's also the New York solar rebate that your handing over as a down payment. The 30% federal tax credit alone is worth about $10,000.00 on a typical 6 kW system at the leasing company's much higher pricing. The leasing companies will tell you that they will apply the tax credit and cash rebate to the system price so that you'll lower the acquisition cost but the leasing company's pricing is so over inflated that the tax credit and rebate as large as they are will hardly make a dent in their price.

Instead of an expensive solar lease or PPA, consumers are now buying their systems with $0 down solar loans that require no equity, that offer tax deductible interest and allows you to keep the 30% federal tax credit and any other incentives and own your solar system for a much greater return on investment than any lease or PPA.

And good luck ever selling your home with a lease attached to it. What homebuyer will want to assume your lease payments on a used system, when they can buy and own a new state of the art system for less than $3.15 a watt, installed, before incentives? Don't take my word for it, search the Internet and you'll find many articles concerning homeowners who are having difficulty selling because they have solar leases attached to their homes.

If I were you I would demand to see in writing, not only what the system is priced at but also the exact amount of the tax credit and cash rebate that you're forfeting before making any decision.

And finally, consider this: You're paying so much more than what you would pay for this system if you purchased it instead that it is actually you that is paying for any maintenance and repairs.

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August 17 2013
Profile picture for danchris89
According to Solar City's contract, Solar City takes care of all repairs and maintencance.  Your point about the technology changing so rapidly is well taken, the realtor mentioned that as well.  Something else to consider.

Thanks,

Dan
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June 03 2013
Profile picture for wetdawgs
Let us know what the agents say.    At the moment, the solar technology is advancing very rapidly so a six year old system is likely to be quite out dated.   Who takes care of maintenance of the cells etc  and roof issues?
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June 03 2013
Profile picture for danchris89
Thanks, wetdawgs, for your response.  I have contacted a realtor in my aarea and asked them to let me know about resales with rooftop solar panels. Solar City has estimated my monthly cost for electric would be $156/month, add that to the lease amount of $139 = $295/month, saving $40/month for first year.  The lease rate increases $4/month each year, which I'm not thrilled about.  We're planning on selling the house in 6 years so, yes, I'm concerned about the next homeowner not wanting to take over the 14 year lease.

Thanks again for your help,

Dan
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June 03 2013
Profile picture for wetdawgs
Talk to people in your area who've installed the system to get some real numbers. 

Here are the numbers as you've stated them for monthly costs:
$139/month for lease
$197/electricity  (42% less than your currently monthly cost)
Sum = $336month.

Total savings = nothing (in fact, a dollar more per month than your current budget)   

I'm a strong proponent of renewable energy, but at the moment the costs don't seem to be realistic for your goals.  


When do you plan to sell?   Buyer's don't like to take over leases, so it may actually be a negative to the value of your  house





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June 01 2013
 
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We live in Orange County, NY and received a proposal from Solar City to lease their solar system
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Latest answer by RayBoggs
August 17 2013 | 5 answers
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