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About to sign on the dotted line with SolarCity...Any advice?

I'm a Tesla Model S owner, and I'm about to move forward on a proposal from SolarCity to have them install solar panels at my house...Any advice, suggestions, etc from fellow Tesla owners/SolarCity customers before I sign on the dotted line? Thanks :)

Have had them for almost a year--very pleased with them--they have consistently over-delivered. In my experience, the SC pieces go quickly--there things can drag is for inspections and the utility connection.

O

I signed a PPA last year--16kW system installed. Expert installation, no issues. Great esthetics--black panels and black skirts well laid out on mostly 'invisible' roof areas. Complex setup due to east-west installation (no good south roof). Could I have made more $$ over 20 years buying the system-sure. Would I tie up $$ in the investment--yup. But I have a no hassle no headache system monitored and maintained by SC with a guaranteed power output at a guaranteed price. Works for me. YMMV.

I got several bids before doing a 9kW system purchase. Solar City wasn't really interested in talking to me. I saved a lot of money by shopping around, however.

Let us know how it goes, I am going to call them next week for a quote. What is your current monthly electric bill and what will they save you?

What happens if you sell you house in a few years?

We've have a SC 9kw system installed last October - so far we've made almost 3 Mega Watt/hrs! So pleased with the install and system. It can take a while to go through design/permitting but when you finally flick the switch it feels great! If you sell the house, under my contract, the remainder of the 20 year lease goes to the new owner - read increased property value.

My solar isn't with Solar City, but one thing I learned dealing with my power company (Southern California Edison) that wasn't immediately obvious to me is that you want to size the system to produce the power you will use, and no more. I have net metering with SCE, and the best I can do is zero. They don't pay for any additional power added to the grid. When I put my system in, I wanted to go bigger, but a palm tree that cast shadow on my roof caused us to downsize, and in the end I'm glad I did.

Probably not popular to plug I non-Elon Mush company here, but I went with Sungevity - a 10 year least vs 20 with SC, and I was cash positive from the first day. Similar to JPPTM, my system has been putting out more than the guaranteed amount, at a guaranteed price. I pay them about half what I used to pay Edison...

To what happens if you sell, while the lease is transferrable, some buyers may not want the encumbrance. My plan if I was to sell would be to pay the lease off through escrow, and offer it as free solar power to a potential buyer.

I think my typos were caused by my browser correcting my spelling. I, of course, meant "a non-Elon Musk company" and a 10 year lease.

Like most here that went with SC, we are extremely happy with their service and support. We could only fit a 7kw system but it has been in since last July and we are saving money over pure PG&E rates. We went the PPA route as well. No hastles, no worries.

@zcataldo - actually, the Solar City contract REDUCES your home value measurably. There is no benefit to a buyer - but the contract's LIABILITY goes with the house - i.e. any buyer MUST continue to purchase the Solar City-panel-generated electricity at YOUR existing contract price through the entire 20-year period. There is no consideration of any future technology chafes or cost reductions, and neither you nor a future owner of your house is allowed to switch to any alternative power supplier at any time during the 20-year contract. Neither you nor the new owner gets ANY of the renewable energy credit payments and none of the upfront federal tax credits. Those are all stripped out to Solar City's private partnership investor groups (read wealthy Silicon Valley cronies). Solar City will (and probably did) show you a bunch of spreadsheets indicating expected power price increases and how much money you will save. Good luck with that - it is virtually identical to the hard sell by whole life insurance providers.

The Solar City model is designed to strip most of the benefits of solar panels away from the property owner and give them to investors. You contract to buy a specific minimum amount of energy from them at a specific pre-committed contract price for 20 years. They take YOUR commitment and securitize it - essentially selling a loan that you have just signed (a real permanent liability that remains attached to your house) to investors, like packaging and selling your mortgage). As the property owner, you do get some small benefit over time IF the price of electrical energy escalates dramatically.

If you really look hard at the numbers and have any federal tax liability, it is a much better deal to buy and own them, even if you have to borrow the money. Either way, you are borrowing the money if you don't have the upfront cash - you either take out a loan to put up solar panels, or you sign a commitment (loan in other terms) with Solar City. Either way, you are giving someone a check every month for the solar panels, including an imputed interest cost - BUT you never get the 30% tax credit or the renewable energy payments that we get every quarter.

The Solar City sales pitch is very convincing, and involves putting up no money on the property owner's part, and it so obscures the economics that the long term nature of the contract and its value implications are often missed.

I am a real estate finance professor at a major university, so spent some time running the numbers carefully, both before and after we put in our solar systems, and have recently received the full updated sales package from Solar City to compare for a new townhouse we just purchased for days when I go to the city to teach. The numbers are ridiculous, almost embarrassing. When I nicely ran the Solar City sales guy through the true economics, he slunk away quickly, after mumbling something about everyone not having the ability to put up the money, yadda, yadda. The most telling part of it was when I asked "Can you just give me the price to install the panels if we pay cash," he replied "That's not our business model. We don't do it that way." That told me all I needed to know about the real underlying motivations of the SC program, and it ain't driven by an objective to make the world a greener place or to put more solar panels in service at the best price. It may be about that too, but it is mostly about who gets paid.

Solar City is perfect for many people. I ended up buying my own system from somewhere else (but I had the cash laying around).

1. Buy your own system (if you can).
2. Use Solar City.
3. PAY SCE/PG&E/etc...

Nothing wrong with #1 or #2.

Many people think that because the monthly payment to Solar City combined with what they still owe to the local utility is less than they used to pay monthly to the utility, that they are saving money. Perhaps they are out a little less cash every month for now, but you have to factor in the element of the future liability for which they have signed up contractually - that has a real value which is SOLD in a bonded deal by the investors - most people who sign that contract have no idea how much they have just encumbered their home - but the investors know to the penny, and put it right into their pockets on day one. Also missed is the opportunity cost of all the benefits the homeowner could have enjoyed by putting a standard PV system on the roof without all the contractual machinations and shifted economics inherent in the SC model.

Unfortunately most people don't understand how renewable energy credits work or that you get paid for them every single quarter forever. And that you are giving them up in the SC contract. Or even how the process works to sell them. I admit that I didn't get it until I installed my first system using an honest, knowledgeable contractor who did all the paperwork under a straight-forward purchase contract. Only after a few months did the light go off - NOW I get it, I get these upfront credits PLUS I get these continuing payments forever. Cool. This lack of knowledge allows people to fall prey to business models that obscure the economics. Solar City is exhibit A. Basic economics should be a required course in any education, but sadly, we see people still doing high-interest car leases, renting furniture, taking out payday loans, buying whole life insurance policies, and renting solar panels. Sad.

Our biggest PV system, a 27 kWh 84-panel system (that is really generating over 32 kWh) was paid for in under three years. It cost $127k in 2010, funded $38k through the federal tax credit, $40k through a USDA farm grant, $10k through other state and local grants, netting out of pocket cost of $49k. The remainder was 100% deductible in our farm business under bonus depreciation in the first year (PV panels are considered personal property for tax purposes). That saved us about $20K in direct federal and state income taxes, so our true out of pocket for the $127k system after filing the 2010 tax return was $29k. We now receive quarterly SREC (Solar Renewable Energy Credit) payments averaging $1,800 (last year was $7,200 total), our former $850/month electric bill is zero, and our excess net-metered production is bought by the electrical cooperative at their "avoidable cost" price, or wholesale value of the electricity, or about $0.05/kwh. That nets us another annual payment of about $2k.

This same system would now be installed for about $80k. Not everyone could get the business-related credits and deductions that we got, but the payback period for most people would be well under 10 years. If the system was sized more appropriately, we could have gotten by with a 9 kWh system, which today would cost about $25-$30k to install, and the numbers would be even better because the net metering economics are not great, selling back our excess production at wholesale cost. There's a lot to know about this stuff, so don't let a converted aluminum siding salesperson take advantage of consumer naiveté.

I have to agree with Pungoteague_Dave. There is a house near me that has been up on the Market for over a year now. And I'm not really located in an area that is still suffering from the housing depression either. When I asked around about it, most people weren't interested because they didn't wanted to deal with the Solar panel contract.

Personally, when I heard that the buyer would be Required to take over the lease contract, I was baffled. I wonder why they couldn't just take them down. I wouldn't want to buy a house with a tag along contract if I could avoid it.

The biggest problem is ownership in long term. If the contract was for 10 years and at the end of that time they would remove the solar panels from your roof if you don't want to renew the contract that would be fine. Is this possible?

As I understand it you are signing a contract that gives them permanent ownership of the solar panels on your roof forever.

So let's say 10 years from now a new generation of solar panels is invented which is much cheaper to purchase and is more efficient. You don't want to use solarcity anymore. What are your options? Can you get out of it? Can you have the solar panels removed? Can you buy them from solarcity at the end of 10 years?

From what I have read it looks like they maintain ownership forever and you can't get out of it.

Wow @Pungoteague_Dave. Thank you so much for crunching the numbers. I really appreciate you taking the time to go over and explain your calculations.

I also considered Solar City and something about not being able to buy the system outright turned me off. I also felt by not being able to buy the system and them telling me how I had great sun exposure that will save me money that I was missing part of the picture. I would have done a lot more research before signing up and likely reached some of the same conclusions you did. What prevented me from exploring this option any more is the fact that I have a slate roof and SC does not support the installation of these panels on a slate roof.

Maybe another company can somehow set up panels on a slate roof and if I find such a company I will certainly explore this option further.

The one thing I am 100% sure about is that if I do have the solar panels installed, I will pay for it outright and I would then want all the credits, benefits, and energy savings that come with it. I don't need someone to finance me money under terms and an interest rate that is not entirely evident.

Also if I sell the house I want to sell the property free and clear without any contractual encumbrances. If I pay for the solar panels, then I can actually market that as an asset. Otherwise with SC it's somewhat of a liability because the house comes with panels that don't belong to you and you are required to keep them there and buy the energy they create.

The only situation I will even remotely consider paying SC is if I don't have the money or can't secure financing to pay for the panels outright. Even if you go with SC, just realize that you are to some extent financing the cost of the panels over 20 years.

Look into it even deeper you will find it's much cheaper to do it yourself by research i found out that I could get all the parts needed for 10 kW system for $12-$13,000 for someone to come and do it turnkey it would be 30,000 when you ask them how long it will take them to do it they typically tell you 2 to 3 days so right away I have a problem with that
I don't mind companies making money but I don't want to feed them steak for a year

And in Ontario Canada in order to qualify for the government program the solar system must be installed on your roof which I also had a problem with now you're talking about engineers City permits so on if your roof needs repairs you will need to take the whole system down
I just don't like that idea especially when I'm sitting on an acre and a half of land seem stupid to me I'm planning on doing my own system soon I will have the electrician come to do the final hook up which is my friend : ) and I'm thinking I will just go to the meter it's a one-for-one and you can bank for a year

+1 websurfr and church70 - I forgot to mention that Solar City owns the panels forever and you must maintain your roof at your expense no matter what happens. They will take care of any damage caused by the panels if there are leaks, etc., but if the roof needs fixing or replacement, you have to pay to remove and reinstall the panels, even though SC continues to own them in perpetuity. It truly is a liability to have someone else lease and control your roof, with a contractual financial liability connected to your house that goes along with it for 20 years.

You can do a roll-your-own system, but it takes a lot of knowledge and work - people who do it tend to think it is easy and cheaper by half, but most of us have neither the skills nor the knowledge to deal with permits, approvals, and complicated electrical interconnections. The extra half for for knowing how to do it and handling the paperwork in my opinion. My interconnection agreement on one system runs 22 pages! I like having one contractor do it all and have them come back if there is an issue. If you would put in your own swimming pool or hot tub, then maybe. I will replace a hot water heater myself, would't tackle PV inverters, interconnections, sub-panels, etc myself. I would not even trust myself to design the number of panels per inverter and connection line. And if I did it, would be in constant fear of something melting up there. ;^)

You may also want to consider geothermal heating and cooling this is quite efficient and also offset your hot water needs can also be used to heat your swimming pool this will also greatly reduce your need for solar panels considering these are the areas which consume the most electricity

For me to install solar panels on the ground there is no engineers or city permits needed I spoke with my local hydro-electrical company to find out it was just a one Page form to be filled out quite simple for net metering and like I said before it's a one for one with the ability to bank for one year the telling part for me was I called and inquired about this the guy I was speaking to told me you know you still have to pay $35 per month for the meter rental I was like okay no problem

p.s this is why I love my Tesla it is the missing link geothermal-solar-Tesla beautiful combination

Hmm...this is all good food for thought, and has probably lessened the chance that I'll get solar on my townhouse. I do value my time and if it is a bit of a premium for "the whole package", I'm fine with that; but 20 years when I expect to sell in less than 10? Hmm.

Two small of an area that I can cover; dealing with a crappy HOA; plus all the info on this thread...I knew I should bought that house in 2010.

Thanks all.

Yeah, we have to pay $8.23 per month for electrical service even though we are generating excess, just as a fee for having an account. Some utilities are starting to charge standby fees for net credit customers under the theory that they have to build and maintain the grid even for us folks who don;t actually use electricity. They bank our excess, and we net-draw overnight and net-generate during the day, and they feel entitled to charge for the ins and outs and the fact that we would need them to be there for us if we didn't have generation. I see the point but don't like it because it makes the economics of solar more tenuous - but they are probably right until we can justify putting in enough battery capacity to bank our own power. That would double installation costs for now and isn't feasible except where the grid does not exist.

The utility banks our net generation for a year, starting with the month first installed, and rolls it if we want, or pays it out at year end, but not before. My point was that over-sizing the system makes the numbers harder in places where the wholesale cost of electricity is below $0.08/kwh. CA and HI are dramatic exceptions, where positive net generation can be a real profit center. It worked in our case because of special government farm grants, but when I do additional systems, we try to get it pretty close to break even in terms of productions sizing/panel count.

We also have 10 geothermal wells driving three geo heat pumps that handle the HVAC, floor heating and hot water for the house and farm buildings. However, it is kind of a waste in our case because we get little benefit given that we already don't use 2/3 of the electricity we generate, so we could be less efficient at minimal cost. But it is still the 'right' thing to do if you can afford it. We have a green business (oyster aquaculture) and a green property, and I suppose that a small eco-footprint is the goal, but we aren't particularly excited about government-subsidized anything. However, if they'll pay us to do a thing, that thing shall be done.

850;
Don't wanna hassle you, but is a hastle a rush job? Or a bum's rush? ;p

Just curious what brand or brands solar city is using Anyone know ?

Looking at it pure financially:

Best Option:

if you have money in the bank or investment making less than 15% on annual average. Take out those money or sell some investment then own solar. You will get a far better and guaranteed return on your money.

2nd Best Option
if you have no money (which would be rare for tesla owners) or have investment opportunities making more than 15% on your money then lease.

Doing nothing is the worst because the paying the utility company is worse than paying solar city's lease.

@P_D, useful info, thank you.

Not to complicate your decision but electric rates have to go up.

http://www.latimes.com/nation/la-na-power-prices-20140426,0,6329274.stor...

I paid cash for my 22 kW system in 2008. Zero maintenance cost to date. On track to be even on the investment in 2016. Power my home and two Tesla's and sell enough surplus to cover my monthly connection charge of $18. A utility rebate and the tax savings got my payback to eight years.

Time value of money is a wash if I factor in electricity price increases and the value of fueling my transportation that was not considered in my original calculation of payback.

In the end I just looked at it that I was prepaying my electric bill for eight years then it was all free . Amazed how well the math has worked. Just have to spend the money to get the benefit.

Like PD I am not a big supporter of giving up all the deductions to others and being stuck with a long term liability. Better to own the system than lease the system.

If you have the money for it you should probably try to get SunPower panels. They have sky-high efficiencies and low degradation rates. SolarCity doesn't talk about the efficiency of their panels.

Personally I would wait to get panels. The efficiency has radically improved from 2012, just two years ago. The price or efficiency is going to become more favorable in the upcoming years.

A couple of follow-up thoughts:

1) One of the things that appeals to me about SC is the no-hassle part--they are on the hook for the system working and generating the min amount of power they committed to. While I have the geek creeds to roll my own to be honest, I don't want to spend my weekend on the roof or troubleshooting an inverter.

2) Around here (NorCal) I don't see solar as a negative--solar was a builder option in our development and many folks bought and I see the rate of installs around here continue to pick up. When we get around to selling the house, we'll probably just buyout the lease and roll the amount back into the selling price of the house. Last summer, my electric bill in the middle of summer (with its attendant 100 temps) was $20. I think that will appeal to buyers.

As always, this made sense for me, not saying it makes sense for anyone else.

O

@Pungoteague_Dave.. Is the Solar Renewable Energy Credit available in all states. I am in California and all I am aware of is the federal rebate and a one time rebate payment from my city that was $2.50 a W and this year was dropped to $1.50.

I also called in Solar City for a quote out of loyalty to Tesla and was extremely disappointed by their hard sell of their leases. The did give me the option of a purchase but continued to push their 20 yr prepaid lease dropping the price $1000 every time I refused.

Sounds to me like;

Buy a Model S, it is the best car on the road, but stay away from Solar City.

SC's deal always seemed strange to me, and I truly thank Pungoteague_Dave for laying out the details before the Timeshare salesman got the better of me!


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