WELCOME TO RIVER DAVES PLACE

Solar lease questions

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
I am buying a home with a Solar City Lease. I have to assume the payments or buy out the lease. Its a shitty deal and I don’t want any of it but it’s a nice house.

I don’t have the numbers yet cuz the sellers are retards. The system looks big.

Its in year 6 of a 20 year term. The lease payment is based upon all output of the system. Cost is $0.19 per kWh with a 2.9% escalation clause. I am told that is $200 a month.

I am allowed to buy out the lease now which I can negotiate with the seller now. I can also buyout the lease annually thereafter.

The buy out is for fair market value. How do we assess the fair market value?

I need to get more data like the size of the system, it’s seasonal output and their usage. It has 35 panels and an inverter. They used it as a primary residence and the house is all electric. We will be weekend warriors so our usage will be less but it does get hot there in the summer and that place has AC.

My primary residence we are in tier 2 of usage with PG&E and are averaging $0.27 per kWh. We use 560 kWh a month but we have NO AC On the primary.
 
Last edited:

Done-it-again

Well-Known Member
Joined
Apr 3, 2016
Messages
8,819
Reaction score
10,839
Not sure how this is done, but I would have have the current owners to buy out the lease.... Like you said, people sign shitty deals all the time and expect to coupe back their money on a bad purchase.
 

HNL2LHC

What is right and what is wrong these days!
Joined
Jun 25, 2018
Messages
13,822
Reaction score
24,782
Depending on where you are at in the sales process I’d lump it into the contract that you buy the system at the same time of closing. Leased systems are not the best and the seller is dumping on you. Put it back on the sellers!!!! I have had a similar situation on a property that was leased land. My realtor (my mother) put it into the contract that the fee was to close at the same time as the house.

Now if you don’t want to loose the property then you could close and bend over when you try to deal with the purchase of the system.
 

Uncle Dave

Well-Known Member
Joined
Sep 7, 2008
Messages
9,826
Reaction score
10,929
Depending on where you are at in the sales process I’d lump it into the contract that you buy the system at the same time of closing. Leased systems are not the best and the seller is dumping on you. Put it back on the sellers!!!! I have had a similar situation on a property that was leased land. My realtor (my mother) put it into the contract that the fee was to close at the same time as the house.

Now if you don’t want to loose the property then you could close and bend over when you try to deal with the purchase of the system.

Thats exactly how I'd do it

- Id put it back on the seller to eat it unless I felt I couldn't live without the property.

Dave
 

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
They have to disclose everything which they have not done yet so we wait.

I read the contract and it has no data or numbers.

it says at this juncture I can assume the lease payments, prepay the lease, move the system to the sellers house for $1000 or buy it out at fair market value

The seller is a PITA and I will see what I can negotiate but they want us to assume the lease. Lets assume it’s a take it or leave it.

I need to get the numbers to figure out how bad or good it is
 

BasilHayden

Well-Known Member
Joined
Jun 9, 2011
Messages
1,761
Reaction score
2,295
I am buying a home with a Solar City Lease. I have to assume the payments or buy out the lease. Its a shitty deal and I don’t want any of it but it’s a nice house.

I don’t have the numbers yet cuz the sellers are retards. The system looks big.

Its in year 6 of a 20 year term. The lease payment is based upon all output of the system. Cost is $0.19 per kWh with a 2.9% escalation clause. I am told that is $200 a month.

I am allowed to buy out the lease now which I can negotiate with the seller now. I can also buyout the lease annually thereafter.

The buy out is for fair market value. How do we assess the fair market value?

I need to get more data like the size of the system, it’s seasonal output and their usage. It has 35 panels and an inverter. They used it as a primary residence and the house is all electric. We will be weekend warriors so our usage will be less but it does get hot there in the summer and that place has AC.

My primary residence we are in tier 2 of usage with PG&E and are averaging $0.27 per kWh. We use 560 kWh a month but we have NO AC On the primary.

Six years old, Panels will be in the 270w each size and a single string inverter most likely, definately not a good start, but 35panels x 270w = 9,450w or 9.45kw. Good sized

Payment based on output, is a PPA not a lease, worst scenario especially if it is bigger than you need, though 0.19 isnt terrible, better than PGE You are paying for power even if you dont need it.

allowed to buy out - if so get the price and see if you can work it out with the seller. Honestly the price is usually much more than the system is worth, like 3x more. New this system would be close to 30k today on the high side, but its not new and inverter is at half life, depending on panels manufacturer could be no value in warranty. Negotiate from there.

As I have told more than 1 member, if you want the house dont let a lease stop you, just know that you could have done much better if you bought a new system, but what is there is better than nothing if its the house youve been looking for. In 6 years call me and we can replace it with new.
 

Ace in the Hole

Well-Known Member
Joined
Aug 15, 2020
Messages
5,742
Reaction score
13,036
Seller signed a bad deal at that rate w/ 2.9% escalator.. (our commissions on leases (not SC) were based on that escalator back in the day..it ranged from 0-2.9%, that sales guy made bank on that large of a system) You can only negotiate buyouts with solar city in 3 ways...and its very important you now exactly what you are signing.

Solar City is Tesla, and they will screw you in ever way possible. I'd run before I ever bought a home with an older SC system on it...cheap equipment, cheap install methods, pump em and dump em mentality company

I'd pay the grand to move it... One thing to know is if they remove system they will do one of two things: Leave the mounts in place...or remove them and you will need to either repair or replace roof. Fair market value is determined by a 3rd party appraiser. But there is a basic formula for it... I agree with above that the seller is trying to dump it on you...

One other thing to really pay attention to is the timelines in the buyout clauses they are specific...and you can really get screwed if you don't watch it. You cannot just buyout at any time...seller is lying if they say otherwise. Time of your purchase and maybe 3 other times in the next 20 years are your shots. With that escalator you may wind up getting the shaft later on...

Unless you are over 65 with zero tax liability leasing is the single worst way to get solar.
 
Last edited:

Mandelon

Coffee makes me poop.
Joined
Sep 24, 2007
Messages
13,963
Reaction score
18,524
Why not just assume the lease? You pay less for electricity than you would from the power company.
 

Tpltrbl303

Well-Known Member
Joined
Dec 27, 2013
Messages
764
Reaction score
900
Make the seller buy out the lease. This is done all the time. Don’t let their agent bully you into assuming it. It will never be worth it. If they got the price they wanted they should have no problem paying it off.

As solarcity is now Tesla you are dealing with a financial company and not a solar company.

A couple of notes on leases is that service or warranty work is slow in coming. Also, especially in solar city’s case the installation is probably second rate(think roof integrity).

I’ve been in the solar industry for a long time and I have never seen a residential lease that’s a good deal.


Sent from my iPhone using Tapatalk
 

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
Thanks for the insight. I am gonna buy the house crappy lease and all. Lol. Did I mention it was a lake house with a view and 4 boat parking spaces?

I know this is a crappy deal. I would never lease. Plus it’s probably oversized

I have the contract. it is a PPA. It says we can buy it out when the house is sold. Or I have to wait and do it annually on 10/1 each year.

I am not sure of usage but I bet we generate more than we use for sure. I will use it like 7-8 days a month during the summer. So the house is vacant the rest.

I think I wanna buy it out now. I still get the net metering from PGE so there is that. I am OK withe the three options (buy now, buy later or lease)

The real question is what is this used POS worth?

So it was probably $30k new. They said a 3rd party appraisal will be done on the buyout. I got $$ for the buyout then try to make them eat some too.

So electricity is expensive here so it does have some value. Tier 3 is going to be more than $0.35 kwh. The real question is what is the current depreciated value? Whats is the remaining life?

Address is in Napa county. I have never owned AC. I am afraid of PG&E!!!
 
Last edited:

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
Here is the house. Boat parking on the side and back
44CA1F12-107F-41CE-B754-6284FC8AF159.png
 

HitIt

Well-Known Member
Joined
Apr 29, 2008
Messages
2,193
Reaction score
3,472
move the system to the sellers house for $1000

Tell the sellers to pay the $1k to move the system. Or offer to split it. Or suck it up and pay the $1k. If you really want solar, there are better options these days and $1k spent now to get out of that system will be money well spent.
 

Dettom

Well-Known Member
Joined
Apr 10, 2009
Messages
2,669
Reaction score
2,855
It’s for all the above, complicated, shell game fuckery that I would never have solar. You have to hire a lawyer before you sign anything. Just my .02..
 

DLC

Well-Known Member
Joined
Jan 18, 2013
Messages
9,855
Reaction score
14,352
I would make 2 offers but I would get a roofing estimate 1st to see what a new roof is going to cost, you know the roof after system removed will have more holes than Bidens presidential victory

1- pay the $1,000 and a if the roof is 10 plus years old ask for a percentage cost of the new roof

2 - buy it out and split it with sellers
 

hallettheck

Well-Known Member
Joined
Jun 25, 2016
Messages
147
Reaction score
267
A lot of negative things said about Solar City....My experience with them has been as they promised. I leased it...no money exchanged.....anything go wrong they repair, "NO CHARGE" they monitor via wifi...and notify if something wrong, which has only been 3 times, (hassle free). Called me one day, coming out to exchange panels with new improved ones, and 5 fewer....same output, about the lease,! Well all I can say is, I save a $100 a month +.....not very much....but if I said to you here's $1,200, a year, and I didn't have to pay a cent to get it !!!!!
 

petie6464

Well-Known Member
Joined
Feb 19, 2009
Messages
1,285
Reaction score
2,368
Get the lease for the solar and start there.

I was in the same situation a few months ago , looking to purchase a house with a newer installed solar system.

When I got the copy of the lease it was 32 pages long! I didn't need to read much because it was 32 pages of "You're gonna pay" Expressed in every way conceivable.

It was the one of the best hog-tie contacts I've ever seen, even to the point of early termination had a factored penalty you would pay based on money you would have saved over the 20 year term of the lease, absolutely insane.
 

DC-88

Well-Known Member
Joined
Aug 27, 2012
Messages
1,798
Reaction score
4,649
Since the house is all electric I'd want solar on it anyway, so in this case I'd probably try to negotiate the best deal to just buy the system at the best possible price without blowing the deal up. It looks like probably an asphalt comp roof (?) from the pic , so that is good for cleaning the panels as well as easier for roof maint. if the solar outlasts the roof .
 

stingray11

Well-Known Member
Joined
May 29, 2020
Messages
796
Reaction score
1,422
I would have them guarantee the life of the solar panels to at least the end of the lease or they replace them for free. And any other components that go with this system. Generally panels are not that reliable. If they would do that then I would go on with the lease If not I would not buy the house or make previous owner take them with and fix your roof for free.

Sent from my SM-G970U1 using Tapatalk
 

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
So the bill is gonna be about $225 a month with an escalation. I am not sure what the actual consumption is yet but I intend to find out

They guarantee repairs and parts and labor for the term so there is that

With the help of someone this lease is exactly what I thought. Absolute crap

We estimate that over 20 years the lease payments are about $57,000. There are payments of $43,000 left to pay over the remaining 13 years.

If I bought a brand new system today it would cost $24,000 after rebates. With 3% interest over 10 years that cost is $26,600.

So they leased a system costing $57,000 that would cost $26,600 if they bought it Instead.

Jeezus, man. Why do people do that to themselves?

This is why you don’t put tards in charge of important financial decisions
 

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
Thanks Allen (Ace in the hole)

He hooked me up with some great data about solar costs and production which is immensely helpful while I am trying to close

BTW...He does solar in Texas!! Any of you fuckers in Texas looking for solar, give him a call
 

X Hoser

Well-Known Member
Joined
Nov 2, 2011
Messages
1,656
Reaction score
1,717
I have had a couple of friends buy properties with solar and the lender would not allow the lease to be taken over. Had to be paid off before funding the loan. Not sure of the exact circumstances though. In both cases I know of the sellers paid off the system to get the deal to close.
 

sixdays

La Flama Blanca
Joined
Apr 2, 2008
Messages
509
Reaction score
422
So the bill is gonna be about $225 a month with an escalation. I am not sure what the actual consumption is yet but I intend to find out

They guarantee repairs and parts and labor for the term so there is that

With the help of someone this lease is exactly what I thought. Absolute crap

We estimate that over 20 years the lease payments are about $57,000. There are payments of $43,000 left to pay over the remaining 13 years.

If I bought a brand new system today it would cost $24,000 after rebates. With 3% interest over 10 years that cost is $26,600.

So they leased a system costing $57,000 that would cost $26,600 if they bought it Instead.

Jeezus, man. Why do people do that to themselves?

This is why you don’t put tards in charge of important financial decisions

Sounds like you answered your own question. Either eat or negotiate the $1k to move the system off your roof. Then call BasilHayden and have Andy put a top notch system on your roof that will serve your needs for many years.
 

Ace in the Hole

Well-Known Member
Joined
Aug 15, 2020
Messages
5,742
Reaction score
13,036
Jeezus, man. Why do people do that to themselves?

This is why you don’t put tards in charge of important financial decisions

Years ago these "scams" were sold at the door...like right at the door. No appointments, no follow up, signed right at the door in under 10 minutes...shit would be on the roof within the month. It was a long form paper single sheet carbon copy contract. The industry was crazy for a couple years with it, high residual comm's tied to the first few years of the lease in many cases..but it was insane.

D2D SR "Hey let me check out your bill?"
Homeowner "here it is"
D2D SR "I can give you 20 cents a kWh vs 29 cents guaranteed for 20 years...sign here" (we had massive leeway in how it was priced...just a floor..the higher the per kWh the higher the commission).
Homeowner "this is such a great deal"
D2D SR "yep" (laughs all the way to the bank)

People actually did this...shit loads of them. The "orange company" was the king of the lease...I had friends that worked for them closing 5-10 a day...reps had lambo's, Porsche's, Ferrari's, bought houses, boats etc..lots of partying etc.....we were in our early 20's, again it was insane. (this was not in TX).

I don't do leases, figured out really quick what a shit deal they were for people...prefer cash deals and I only offer one financing option...with zero lender fee's its actually a good deal for the consumer.

Good luck with your endeavor, glad I could give you some data to use.
 

socal0487

Well-Known Member
Joined
May 2, 2008
Messages
395
Reaction score
390
Thanks for the insight. I am gonna buy the house crappy lease and all. Lol. Did I mention it was a lake house with a view and 4 boat parking spaces?

I know this is a crappy deal. I would never lease. Plus it’s probably oversized

I have the contract. it is a PPA. It says we can buy it out when the house is sold. Or I have to wait and do it annually on 10/1 each year.

I am not sure of usage but I bet we generate more than we use for sure. I will use it like 7-8 days a month during the summer. So the house is vacant the rest.

I think I wanna buy it out now. I still get the net metering from PGE so there is that. I am OK withe the three options (buy now, buy later or lease)

The real question is what is this used POS worth?

So it was probably $30k new. They said a 3rd party appraisal will be done on the buyout. I got $$ for the buyout then try to make them eat some too.

So electricity is expensive here so it does have some value. Tier 3 is going to be more than $0.35 kwh. The real question is what is the current depreciated value? Whats is the remaining life?

Address is in Napa county. I have never owned AC. I am afraid of PG&E!!!

i was in the same situation and had buyers buy it out. Granted it was a buyers market then so I had some leverage. My buyout number per kilowatt was written within the contract. Also remember that you assuming the PPA, you’re assuming the lean that is placed on the house by the solar company
 

socal0487

Well-Known Member
Joined
May 2, 2008
Messages
395
Reaction score
390
Why not just assume the lease? You pay less for electricity than you would from the power company.

not necessarily. He will pay for every kw produced regardless if he uses it not. If he produces 800 kw but only uses 300 kw. His bill will be 800 x .19
 

DaveC

Car-boat motors
Joined
Sep 25, 2007
Messages
11,177
Reaction score
6,350
What he said. This is the big system. I don’t know what their usage is let alone mine

Excellent probability that my consumption will be much less than what it produces. Not sure.

I have to talk to PG&E about the balance of net metering and what their rules are regarding the excess. I was hoping we can apply the excess to the other house but that is probably a pipe dream

No lien but the seller won’t sell without resolution and the deal is contingent on doing something about it
 
Last edited:
Top