Solar: Is It Worth It? (Phoenix: days on market, apartment, leases)

[patrick85395]

Originally Posted by john3232

My feeling is if you have a large home with high ceilings and have no plans to move. Yes. Otherwise no.

Any sort of a binding contract with a solar company with years to go will hurt resale value.

I spoke with my agent friend and she told me that leased solar has never been an issue with homes that she has sold. As a buyer, I wouldn't hesitate to purchase a home with a solar if the deal made sense. The alternative is to have a home without solar with stressful summer power bills. I used to think about how much my bill would be before solar and I kept the thermostat at 79. With solar, I don't even think about the bill or the temp setting. My home is always super comfy in the summer.

My only hesitation would be panel placement. Mine are on the back of my home and I would never purchase a home if the panels were visible from the front.

[HX_Guy]

Originally Posted by Bummer

Great point, Hal . . .

Just recently a seller in my neighborhood with Solar Panels learned that the hard way at closing . . . "eat" a $17k solar payoff or lose the sale since the buyer was not interested in the additional fees.

So the buyer wasnt interested in paying LESS?

I've been in the solar industry coming on 5 years, my company has close to 6,000 homeowners who have gone solar with us and I can't think of one scenario where a home with solar doesn't cost less than if the home didn't have solar.

The biggest problem is not the solar, its lack of education, on both the real estate agent's side, and the buyer's side. Most real estate agents are not solar consultants, they have no idea how it works, so while they write things like "Beautiful granite countertops and large entertaining backyard" in their listing, they put solar as a foot note in the listing that no one has any idea on how it works.

True story - a had a potential homebuyer call us a while back, asking how much it would cost to remove a solar system off a house they were interested in buying. I asked them why, and they said they didn't want to have the extra bill from the solar payment. We looked at the details, and I said I'd be happy to take their $3500 to remove the system, but why would they want to pay that AND also pay $700 per year MORE to APS than if they left the system on the roof. Needless to say, they bought the house and kept the solar system.

What people don't seem to grasp sometimes is that solar doesn't cost you more, in essence it doesn't cost you anything, because youre already spending that same money. All you're doing with solar is re-allocating your money - so instead of giving 100% of your money to APS, you can put 80% of the same money toward solar, and pay APS only 20%. You're spending the exact same (or typically less actually), but youre putting the money toward your own investment vs just mailing it off to APS. Think of it like renting vs owning - I think most would agree that spending $1000 toward mortgage is smarter than spending $1000 toward rent. However even if the solar is being leased, again typically the total of payments (solar + remaining APS) will be lower than just 100% APS. Why not produce the power with solar vs just getting it 100% from APS if you are going to spend less?

[wase4711]

its the cost of entry that scares away most folks, and, the fact that their is some maintenance/service issues that can come up with the system...plus, with APS messing with what they charge you when you are solar, and what they re-imburse you for your excess production that they take, makes it very iffy for folks now a days to pull the trigger.
in a state like Arizona, with endless abundant sunshine, APS/Arizona should make it super easy and in expensive for ANYONE who wants to go solar to do it; as you know, that isnt really the case right now..

[HX_Guy]

The cost of entry is typically $0, as most finance the systems and make monthly payments (which are less than what they would be paying to APS anyway).

And I agree, APS is not making it super easy and they've only been making it worse. We see people wanting to wait all the time, but all that we've seen happening is that its getting worse for the homeowner. There used to be net metering, which meant that if you had a 100% offset system, you'd end up with a ~$20 per month Aps Bill, all year long. Then in later 2017 they changed it to the new buyback rate program, and the same 100% system now resulted in a $40/month average bill. Late 2018, the buyback rate changed and now the same system resulted in a $60/month average bill. Now this year, just a couple months ago, the buyback rate dropped again and now for the same 100% system, you're looking at around $80/month.

Add that in with the 30% tax credit ending this year (dropping to 26% for 2020), and solar overall is actually getting more expensive, not cheaper. What has helped is that equipment costs came down for a while, so it helped balance everything out more or less, but now equipment is trending upward as well with the tariffs.

It still makes financial sense to do it. I'm looking at a homeowner that went solar with us yesterday right now. They were paying $295/month to APS without solar. They did financing, and the solar payment is $230/month, and their new average APS bill is projected to be $0 (system is oversized to overproduce, so that the exported power, which APS pays you for, offsets the charges that APS charges you). They are saving $65/month AND putting that same money that they would be spending anyway toward their solar system, which will eventually be paid off (by them, or the next homeowner).

[wase4711]

so, someone like me, paying 160 per month on a budget plan with aps, would need as system that over produces significantly, if I wanted to buy/lease a system that would have a TOTAL monthly investment of 160.00?
plus, what happens when APS once again changes the "buyback" rate?
and, as a "older person", what happens to my system if I dont outlive the life of my lease/payment plan?
these are some of the major questions I havent been able to get clear in my mind..


thanks

[HX_Guy]

Originally Posted by wase4711

so, someone like me, paying 160 per month on a budget plan with aps, would need as system that over produces significantly, if I wanted to buy/lease a system that would have a TOTAL monthly investment of 160.00?
plus, what happens when APS once again changes the "buyback" rate?
and, as a "older person", what happens to my system if I dont outlive the life of my lease/payment plan?
these are some of the major questions I havent been able to get clear in my mind..


thanks

It's hard to quote on the price without knowing a few factors such as roof direction and tilt, as those make a difference in how large the system needs to be, which therefore affects the solar payment. But typically, solar costs less than the utility, so if you currently have a $160/month payment, its likely the solar would cost less than that (or solar + new utility bill).

The APS buyback rate gets locked for 10 years at whatever buyback rate you get in at. People that got in at $0.129/kWh buyback rate in late 2017 have that rate for 10 years, people that got in at $0.116/kWh in 2018 have that rate for 10 years, and so forth. The buyback rate after 10 years hasn't been established yet.

If you don't outlive the system, its like any other type of loan/debt.

[wase4711]

thanks, that is some interesting info..I'll send you a PM in a bit with a couple more questions..

[EEngineer]

I am looking at a house that has solar panels. The house is really neat and matches our tastes. Then I found that the panels are leased, just as of Oct 2019 from Sunrun. I read many forums about the bad aspects of solar panel leases, and I think I see all the math involved. I asked my buyer's agent don't these turn people away. She says that some people won't look at solar panel houses and some will, but she hasn't had anyone walk away after learning about the lease details. Of course the lease payment may be considered a debt for D/I ratio, and the buyer must qualify to take over the lease. So I was ready to look at the panels in a poor light and seek concessions or something, but my realtor seems fairly calm about the situation, as if it is a fairly neutral factor for a house. So now I am trying to resolve the two contexts.

[wase4711]

You could ask them to pay off the lease; find out how much the payoff is, and add it to your offer...that way, you own the house and the panel outright..

or, if you qualify, and the solar leasing company approves you, you can continue to pay the lease and not worry about that.

its really simple and nothing to be scared of; just make sure either way, you ensure the warranty that was provided to the original owner can be transferred to you..

[EEngineer]

Originally Posted by wase4711

You could ask them to pay off the lease; find out how much the payoff is, and add it to your offer...that way, you own the house and the panel outright..

or, if you qualify, and the solar leasing company approves you, you can continue to pay the lease and not worry about that.

its really simple and nothing to be scared of; just make sure either way, you ensure the warranty that was provided to the original owner can be transferred to you..

wase4711, Yeah, those are the words that sound practical to me. I am not sure if the buyout can be performed now - I have the impression the solar company wants to have the panels for 5 years for the tax credit to vest into their pocket, but just use the next steps of logic from that point if true.

I am very likely to qualify for the lease and could assume it - whether I reduce the overall monthly expense with the panels is a detailed sub-topic that is not central to my thoughts at the moment.

The impact on resale is what I am wrangling with. Of course there is some impact, but how much I am not sure. Realtor feels neutral about the value. The house is having some extra days-on-market now.