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Ok, I know this subject has come up various times in the past but things have/are changing with respect to the economics of Solar on ones home.
I'm looking at leasing a system that will generate 1.5 KwH more than we use. The lease is $140 per month with a 2% adjustment rate and they are guarantying that we would pay APS $0 due to oversizing. Our level billing rate with APS is $180 at this point but I'd expect the price per KwH will go up sooner than later. I also understand that the power companies are talking about changing the way they bill using something along the lines of 30 minute metering using the highest KwH cost as the basis for the days power usage.
This would be a 20 year lease, panels,parts,labor warranted for 25 years as well as a 95% generation warranted for 25 years.
If the Tesla Power wall or one of their competitors actually becomes reality that could be added which would effectively take us "off grid" for all intensive purposes.
This has been covered quite a bit, but I personally wouldn't do it for a number of reasons... Most importantly, you are going to be locked into today's technology for 20 years. With how fast things are progressing in solar, I wouldn't want that. Second, if you do end up wanting to sell your house between now and when your lease is up, you'll have to find a buyer willing to take on that payment for today's technology. Then you have the questions of what APS is going to do with their rates over the term of the lease. And, IIRC, there are issues with lenders financing a home with a solar lease. I personally would love to do solar, but there are way too many variables for me right now. Hopefully the technology will continue to progress over the next few years and some of the variables will sorted out. Your math and situation may work out differently than mine though.
We've been looking at buying an AZ property in a 55+ community. I like the idea of solar a lot but....as Brian571 points out in his excellent post above a leased solar system, in my view, is a negative. i wouldn't want to add the terms of the lease to any purchase I make. Plus, and I'll defer to those with more expertise in this area, I believe any tax benefit a homeowner might gain from purchasing a solar system is given up to the power company in a leased situation.
I would not lease solar from anyone let alone APS. I recently bought a system and looked into leasing as well. There are many issues with a lease that have already been stated. Difficulty selling the house if/when you move. You don't get any of the tax credits (30% federal and 1000 state) they go to the leasing company. Let's say you do a good job of conserving energy or you're gone for many months you are still paying the amount of the lease and don't get any benefit of not using the power.
Your statement above doesn't make sense. How much extra power is APS trying to get you to generate for them? 1.5kwh doesn't make sense. I use about 15 kwh per day. The power companies are discussing upping the charge for solar companies but it's a small increase right now at the ACC that is approved will take affect for new solar customers after 1 August. They currently also do have a plan based on peak demand which is what I believe you're talking about but right now you can still choose the plan that works for you. They will not force you to go to the peak demand plan. Also, any power over what I use I generate right now is banked and if I used more power than I generate then it gets taken out of my bank and I don't get charged. When the bank runs out I get charged according to my plan.
They are using the roof of your house and you are paying them to do it and they get all the benefits. I'm a huge fan of solar but leases are only good for the company and not the homeowner.
If you are really interested in solar I would take a serious look at your usage and how you can conserve. Get your roof checked out to see what kind of shape it's in and if it needs to be repaired from a roofer. Then get as many quotes for reputable contractors, get educated and decide for yourself.
JimJ, I own a solar company so I'd like to chime in...
Some of the items you mentioned just are not true in my opinion...such as X company guaranteeing that you won't have an APS bill at all due to oversizing? Unless you are grossly oversized, that wouldn't happen...and if it ever did happen, it would be a year end bill credit, not on a monthly basis. APS pays diddly squat for over generation...as in about $0.03/kWh..while they charge anywhere between $0.07 - $0.24...most people average around $0.135 - 0.14. With a leased system, you'll probably be paying around $0.09 - $0.105/kWh. It does not make sense to over generate and if X company is telling you that, they are just trying to sell you a bigger system than necessary.
As for power companies changing the way they bill...APS is not looking to go to Demand based billing like what you mentioned. SPR has already done it and forced new solar customers on the new plan (and it's really a huge solar killer in those areas right now) but APS has elected to stick with a flat fee per installed kW which they actually already implemented at the end of 2013 with a $0.70/kW fee, but they are asking the Corp Commission to raise that to $3.00/kW. What that means if that if you have a 10kW system on your roof, the current monthly fee is $7.00 and they want to raise it to $30.00. If you already have solar, or if you submit an application to APS before the new rate takes effect, you get grandfathered into the $0.70 fee (APS has already stated this in writing).
To Brian's point about getting locked into today's technology for 20 years...people have been saying that for, well, probably 20 years. Yes the technology has gotten more efficient (a 40"x65" panel used to produce say 225W and now they can do 327W for example) but the technology behind is still the same...you just need fewer panels to produce the same power. Sure you can always wait and see what come out next, but in the mean time you risk getting locked into new/higher APS rates and paying more while you wait.
Leasing vs buying...well, I own my system so I believe in owning them, but that doesn't mean that leasing doesn't have it's place. Bottom line is that you pay less than you do now...how can someone say that's not a benefit to the homeowner, I'm not sure. If you currently pay $0.14/kWh and you use 20,000kWh/year and your leased system is at $0.10/kWh and you use the same that's $800/year difference...of course there will still be some monthly APS fees to the tune of ~$20 so your net savings is $500 - $600 vs if you didn't get solar.
Second thing is that not every one qualifies for the tax credit. You must have a tax liability greater than the tax credit (it does roll over to the next year as of now, due to expire in 2016) but that liability must come from wages (1099 employment for example does not count for some odd reason, thanks IRS! ).
A lease payment is also going to be less expensive monthly for example than if you were to finance a system, but the difference it's all that big if you compare 20 year lease vs 20 year finance.
As pointed out, one of the possible downsides of leasing is when you sell your house...and it could be a downside if the new potential homebuyer isn't educated on solar and/or their real estate agent isn't either and sways them away from it. I don't quite get it...I mean you're buying a house with a stated monthly electric bill vs another house that the electric bill could be who knows what...in either case the house without the solar will definitely cost more electricity wise per month than the one without the solar, but I guess people are afraid of what they don't know/understand.
Okay, I did a bad job in explaining what I was looking at doing.
1.The system is not from APS, it's from SunPower.
2. I asked for 100% + power generation with any eye towards being able to go off grid when something like the Tesla Power Wall (or similar system) becomes reality. This should be fairly soon as many other companies are doing the same research. Powerwall | Tesla Home Battery
3.My power generation should result in a $0 bill due to excess power sold back to APS.
4.I wanted to purchase but the tax credit is of little/no use for us. Now I'm just doing the math on a refi or HELOC to purchase the system and if that works out cheaper then that might be the way I go.
5. If the tax credit expires in 2016 like I understand is to happen then that wipes out that benefit right there.
6. Lenders have revised the way they look at funding a home with a solar lease and have reversed their position from no to yes.
7. I would think having a full warranty (parts,labor) on the system for 20 years would be some piece of mind unlike owning the system where the owner is on the hook?
Got it. I know APS has been cleared by the ACC to lease solar to customers so I thought that's where you were getting it.
As far as integrating the Tesla Power Wall and going off grid as your future plan I would look into your local city, county code and see if that's even feasible. The Tesla Power Wall was designed to provide you battery back up during an outage or shave peak demand depending on the size you get. Going truly off grid takes some planning and lifestyle changes. People do it however most of those people do it because it is prohibitively expensive to get electricity to their house.
I would look into the refi/heloc option. That 2% adjustment on the lease happens how often? Take a look at both options, run the numbers and see how much you're paying in the long run for both.
The tax credit does expire in the 2016 tax year. They could renew it, change the percentage or totally do away with it. Is there something you can do with your taxes to take advantage of it? We changed some things when we bought our system this year and we should make back around half the cost of the system with the savings this year and the tax credit. It's something to think about.
The mortgage lenders may have reversed their position about the solar lease aspect but that doesn't change the fact that the person that is buying your house has to qualify for both the lease and the mortgage at the same time. Also, some people just don't want to mess around with it at all. Go to the Real Estate section of the forum and query solar lease.
My panels have inverters on each panel due to some shading issues with my roof line. Those parts are warrantied for 20 years with the purchase. These things don't break down that often. If I have to replace an inverter in 10 years then I will pay for the labor.
I don't run a solar company or am in any way associated with the solar industry. I'm just a homeowner trying to make the most out of her money. I go out and read my meters to monitor my usage as well as use my APS account to make sure I'm getting the most out of my system. I also have a monitoring system for my solar panels which comes with the purchase so I can see if there are any problems.
One last thing, I would get a few quotes with different types of panels. Sunpower is a more expensive panel compared to other brands like LG which is a good brand/well known name.
Got it. I know APS has been cleared by the ACC to lease solar to customers so I thought that's where you were getting it.
As far as integrating the Tesla Power Wall and going off grid as your future plan I would look into your local city, county code and see if that's even feasible. The Tesla Power Wall was designed to provide you battery back up during an outage or shave peak demand depending on the size you get. Going truly off grid takes some planning and lifestyle changes. People do it however most of those people do it because it is prohibitively expensive to get electricity to their house.
I would look into the refi/heloc option. That 2% adjustment on the lease happens how often? Take a look at both options, run the numbers and see how much you're paying in the long run for both.
The tax credit does expire in the 2016 tax year. They could renew it, change the percentage or totally do away with it. Is there something you can do with your taxes to take advantage of it? We changed some things when we bought our system this year and we should make back around half the cost of the system with the savings this year and the tax credit. It's something to think about.
The mortgage lenders may have reversed their position about the solar lease aspect but that doesn't change the fact that the person that is buying your house has to qualify for both the lease and the mortgage at the same time. Also, some people just don't want to mess around with it at all. Go to the Real Estate section of the forum and query solar lease.
My panels have inverters on each panel due to some shading issues with my roof line. Those parts are warrantied for 20 years with the purchase. These things don't break down that often. If I have to replace an inverter in 10 years then I will pay for the labor.
I don't run a solar company or am in any way associated with the solar industry. I'm just a homeowner trying to make the most out of her money. I go out and read my meters to monitor my usage as well as use my APS account to make sure I'm getting the most out of my system. I also have a monitoring system for my solar panels which comes with the purchase so I can see if there are any problems.
One last thing, I would get a few quotes with different types of panels. Sunpower is a more expensive panel compared to other brands like LG which is a good brand/well known name.
I don't see the tax credit helping much at all due to the fact I'm retired and have no earned income to offset.
As for the 2%, I've got two options, $120 +/- mo with the 2% yearly step up or $140 +/- without it.
From what I've been able to find out one of the advantages to the Sunpower panel is it's warranty both for power generation % and basic functionality and that the warranty is longer than most others.
The cost for the system is about $32k.
The lease payments over 20 years are lower, given I can't use the tax advantages it's kind of a wash?
If your going to do it, do it soon. SRP just made new solar installations useless by charging a monthly surcharge on users. APS is trying to follow suit. You would need to get locked in before APS kills solar as SRP did.
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Yes the technology has gotten more efficient (a 40"x65" panel used to produce say 225W and now they can do 327W for example) but the technology behind is still the same...you just need fewer panels to produce the same power. Sure you can always wait and see what come out next, but in the mean time you risk getting locked into new/higher APS rates and paying more while you wait.
Let me clear some things up......
