Solar leasing (Sungevity)-how does it work?

[Badfish740]

I was at Lowes today and Sungevity was hawking their solar systems. I had the guy look up my house on Google maps and he confirmed what I already knew-that we have a perfect roof for solar: Simple gable roof, 25' x 50' rectangle facing directly south and no trees shading us. It's what kills our air conditioner every summer They're going to have someone call me, talk to me about my electric bill, etc...and determine what options are available. They mentioned zero down leasing, which, quite frankly, is the only thing we'd be in a position to do right now. What is the angle? Anyone leasing with Sungevity or a similar company?

 

[sloeffle]

There was an article in our local paper about solar and they interviewed a couple that leases their panels from Astrum solar. I thought about filling out their online form but all of my roofs ( house and barn ) face east and west. If I did solar I would want it on a mount anyways so that does not really matter. I am not sure if as leasing company would put them on a mount.

http://www.dispatch.com/content/stories/home_and_garden/2014/09/28/solar-surge.html

I am also interested in how a lease deal would work. Found a couple interesting links about leasing solar:

https://www.energysage.com/solar/financing/should-you-buy-or-lease-your-solar-panel-system

http://solarleasedisadvantages.com/

 

[peakbagger]

One thing that seems to be hassle with leases is if you try to sell the home. The lease company has to approve the buyer or the current owner has to buy out of the lease.

There is also a big competition going on between many companies to gain a large market share so they can go public, they are willing to take loss now in hopes that they can cash out later. Unlike buying a system outright on sale, the lease owner can make it back later on.

I think the standard financial advice applies to solar leases, if you can understand the deal, you probably shouldn't be investing in it.

 

[woodgeek]

With the price of solar falling so rapidly, there's also a lot to be said for waiting if you don't have the cash in hand now to buy outright.

The 'angle' is simple. If the company can pocket the Fed incentives (not you), the equipment is under 30 year warranty, they do not have to pay for the land (you do that), and they can sell you (or the grid) the power for something close to the market rate, then they can turn a reasonable profit on their investment $. Say between 5-10% return per year, and getting better every year. If they can get financing at a lower interest rate than that (say a few % for a corporate bond), their profit is the difference between their rate of return and their interest rate.

As long as the sun shines, and the financing all looks the same, they are all good. And you are helping to put more green power into the grid (or to take less non-green out), but not realizing any of the potential $ gains from doing so. You are also spared the risks (currently low) of net-metering arrangements changing in the future.

 

[DBoon]

With interest rates so low, a solid 4-5% rate of return is a great return, so I believe that leasing economics are very favorable for that very reason.

 

[johnny1720]

I had the pitch from sungevity last summer. They basically said for what my yearly electric cost is divided by 12 months they would lease me a system. However there was a part of the system that costs $10,000 and it needs to be replaced every 10 years. The cost to buy the system was $84000.

I ended the call after they said $84000

 

[newburner]

We are currently in the permitting stage of leasing a system from Solarcity. I too was skeptical of the "no money" deal but so far, I see no issues with it. Our system is due to be installed in December.

As someone mentioned above, Solarcity gets any rebates available since they own the system. In turn, they give us a low lease payment. Our system is designed to provide us with 70% of our current usage. The remaining 30% would be purchased through our current electric co. So, the lease payment plus the 30% we buy from the electric co. will be a couple hundred dollars less per month than what we pay now.

If our system produces more than we use, we get the credit through net metering. Also, they guarantee production. If our system fails to produce what they say it will, they'll send us a check for 11.8¢ for every kWh less than what they guaranteed. That will be nice when our panels are buried under a foot of snow for a few months!

They also warranty the system for as long as its on my roof. Anything goes wrong they fix it for nothing. They also provide repairs to my roof should I spring a leak due to installation, and they have a 2M insurance policy if, say, one of the panels flies off and hits the neighbors house.

With no money out of pocket, so far it seems like a no brainer. The pos far outweigh the negs in my situation. Plus I plan on dying in this home so I have no concerns about transferring the lease when I sell.

 

[BrotherBart]

Keep us posted on how it goes.

 

[Grisu]

So, the lease payment plus the 30% we buy from the electric co. will be a couple hundred dollars less per month than what we pay now.

A couple hundred per month LESS? How much are you paying currently and what size system are they installing?

 

[newburner]

We pay $422/mo right now. The system size is 14.025 kW. (55 panels)

I may have rounded up a bit when I said "a couple hundred" but it should be closer to $200 than $150. Plus, I'll be much more cognizant of the energy we are using and should have no problem reducing our load which would save even more money. I'm quite sure we will save at least $2,400 over the first 12 months.

 

[woodgeek]

it would be interesting to know what $/kWh you are paying the utility, and what Sungevity wants from you per kWh.

 

[newburner]

it would be interesting to know what $/kWh you are paying the utility, and what Sungevity wants from you per kWh.

Are you asking me or the OP? I'm with Solarcity.

 

[woodgeek]

both

 

[newburner]

We are paying the utility 26.4¢ per kWh and the solar lease is 11.8¢.

 

[NJ_Burner08002]

I have always wondered how this works. So basically instead of paying the electric company , you are getting your electric from the solar company. They install for free, and just sell you the electricity from the panels.

 

[NJ_Burner08002]

We are paying the utility 26.4¢ per kWh and the solar lease is 11.8¢.

So your saving 14.6 ? Saving 55%?

 

[newburner]

I have always wondered how this works. So basically instead of paying the electric company , you are getting your electric from the solar company. They install for free, and just sell you the electricity from the panels.

In a nutshell, yes.

 

[newburner]

I just wanted to update this thread. SolarCity installed our system this week and we are now waiting for the utility to install the net meter. I can't wait to start saving money. Our last electric bill was $588.

When they installed the array, they also replaced our fuse box with a circuit breaker box, grounded our system and "bonded" the electrical to the water. (Whatever that means)

The electrician said everything is up to code and it was all free.

Here are before and after pics of our service panels. I'll get some pics of the array once the sun comes up.

 

[newburner]

2 inverters...

 

[linc1216]

A co-worker of mine told me her parents has solar panels on their roof that they rent for approx. $70 a month. However, their home is entirely electic. I thought about it, but I'm already paying $70 or less per month at my house for electric.

 

[newburner]

$70 a month is awesome. My goal is to get my $400-500/mo bill down to around $150.

 

[Where2]

The sum total of my electric bills added up for the last 12 months don't total more than $588. Last time I checked, my annual total was around $460.

What is $588 worth of electricity, like 2500kWh at Mass rates? I know Mass has some ridiculous rates (just behind CT and HI), but I'd be living under a bridge if my electric bill was $588/mo.

 

[newburner]

What is $588 worth of electricity, like 2500kWh at Mass rates?

Yep. We used just over 2200 kWh. Februarys are usually the worst month. We typically run around 3200-3300 kWh then. With National Grids latest rate increase, I'm looking at an $800 bill if my solar isn't operational by then.

 

[mellow]

So do you get the SRECS or does solarcity? I was under the assumption that they got them.

 

[newburner]

So do you get the SRECS or does solarcity? I was under the assumption that they got them.

Solar City owns the equipment so they gets the SRECs. It's how they make money. All I do is lease the equipment. In doing so, I get free electricity off the array, bill credits from the utility when the system over produces, and solar lease refunds when the system under produces.