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Published on June 9th, 2013 | by Nicholas Brown

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Solar City Offers Zero-Down Financing For Home Builders

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June 9th, 2013 by
 
SolarCity-logoNEWSSolarCity, one of the key companies that made solar power more attractive to its potential customers via solar panel leasing (so they won’t have to put the full cost of a solar installation up front), is now offering a policy that enables home builders to install solar panels without paying up front.

This may really help the effort to get more new houses built with solar panels preinstalled, as the upfront cost of solar panels is probably their greatest deterrent, as indicated by the way in which customers have swarmed to solar leasing despite it often being a bit more expensive for them simply buying the panels on their own.

Recently, the governments of Lancaster, California and Sebastopol, California mandated that solar panels be installed on all homes, and in the case of Sebastapol, commercial buildings as well.

SolarCity will certainly accelerate this effort to make solar a mainstream, standard power source on new homes across the country.

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About the Author

writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is: Kompulsa.com.



  • ronwint

    Unfortunately, no money down solar leases and PPAs are two of the most expensive ways to have solar on your roof. A zero down solar lease will typically cost a homeowner more than 3 times what he or she would have paid had the system been purchased instead. In fact you’ll pay so much more for a leased system that it will actually be you, who will be paying for your own repairs, insurance and monitoring many, many times over.

    Don’t believe it ? Do the math. Add up your lease payments including the annual payment escalator over 20 years on that $0 down solar lease and then compare that to purchasing an installed system at today’s much lower pricing of less than $2.10 per watt after the incentives are applied, and there you have it. More than 3 times the cost when you lease.

    And good luck if you ever want to sell your home with a solar lease attached to it. What home buyer will want to assume your lease on a used solar system, when they can buy a brand new solar system and keep the incentives for tens of thousands less than your remaining lease payments Don’t become a solar sheep. Shop before you sign that 20 year contract !

  • Marion Meads

    The manufacture of solar PV is no longer the problem, it is the exorbitant cost charged by the installers. It has been reported here that the cost of production of solar PV has gone down to $0.52/watt but the total cost of installation before subsidies or tax rebates remained high at about $7-$8/watt. Even in the design of the panels, and now the ease of installation has greatly improved to reduce labor, such improvement coupled with the very low cost of solar PV, the total installed price remained almost the same. The installers are therefore gaming the system because they know you are going to get the rebates, so they jack their prices accordingly, and improve their profits. They should pass on the cost reduction to end users. A complete grid-tied PV system right now are available from big box stores at CostCo, Home Depot, Lowes, and you can get it for about $2.00-$2.40/watt complete with inverters and racking setup. You can install the system on the roof yourself as it requires basic carpentry skills, and then hire a licensed electrician to check your system and do the final connection to the grid on your main circuit panel. Licensed electrician for a half day job costs between $200-$400. Your total cost of installation should be a small fraction than what Solar City is quoting you for the option to buy and install the panels.

    Or someone has to come out and compete with a cheaper method of installation.

    • Bob_Wallace

      I think your prices are high.

      Average installation costs are right about $3/watt in the US. Residential prices are higher than commercial and utility sized installations but are averaging about $5/watt. I wouldn’t be surprised to find that some people are getting charged $7 – 8/watt but that’s far from the average price.

      Between the end of 2011 and end of 2012 residential solar prices dropped 29%.

      • Marion Meads

        Is your price after or before rebates? I always quote before rebates because it is the total money that went into the project. And all calculations of payback should be based on the total money spent.

        Also, I would truly appreciate it if you can name me a few of the companies that are installing at below the average price of $3/watt. Remember that it is the average, so there is high and low to get the $3 average, and am interested in the below average price, unless the $3/watt is the minimum that you can find and not the average.

        • Bob_Wallace

          Those are non-subsidized solar prices.

          They come from Greentech Media’s fourth quarter 2012 solar report.

          The $3/watt average includes utility, commercial and residential – as I said. It is not common practice for solar companies and utility companies to publicly disclose their numbers. The best way to get a feel for what is happening is to rely on one of the companies like GTM which have inside access.

          There is some residential installation happening for under $3/watt. One community organization in LA was installing at $2.78/watt.

      • Marion Meads

        Last time I checked with Solar City for an installation that I will pay upfront, the quote as $7.50/watt before rebates. At this price, the project will be a financial black hole that you continue to lose your money compared to investment elsewhere. It is mathematically impossible to recoup the cost if you compute the interest rate on $7.50/watt versus the value of electricity produced by one watt rated panel per year.

        • Bob_Wallace

          In that case I would not do business with Solar City.

          You can buy the system for under $2/watt and hire a roofer and electrician to do the installation.

          $7.50/watt becomes $5.25 after the federal subsidy. Depending on how sunny your location is that would give you electricity in the range of 20 to 25 cents.

          If your cost of electricity is on the high side, say 20 cents, then solar will pay for itself. Remember to use the expected average cost of electricity over 20 years. A current 15 cent rate at 3% averages 20.1 cents.

          There are multiple states that get enough sunshine and where grid prices are high enough that even $7.50 -> $5.25/watt solar pays for itself.

          • JamesWimberley

            Bob’s right. Solar City have no interest in selling you an installation for cash; their business model depends on capturing the tax breaks, available to corporate owners.

  • JamesWimberley

    It seems thee are still housing developers so clueless as not to offer solar as a standard fitting. What is the value added by the solar lessors? The houses are less valuable with the leasing contract than with a free and clear installation. Would you buy a house with a leased kitchen?

    It must be much cheaper to design in solar than to add it afterwards. In fact, developers should be thinking of architecturally integrated solutions where the panels replace the roof tiles.

    • Matt

      Yes, and since the price would go into your mortgage you don’t have to find the extra money. But then I’m guessing some banks are not ready to think about PV increasing than the value of the home.

      • Bob_Wallace

        I really doubt that the case with new construction.

        And the sales price of a resale is the price. The value of the solar system will be reflected in the appraisal. We already know that the resale market values installed solar.

    • Bob_Wallace

      ” architecturally integrated solutions”

      Yes. Design the slope of roofs facing in a solar direction optimal for the latitude.

      Create ‘whole slope’ solar roofing systems in which the panels are the roof. Attach them to the plywood decking or use metal strapping for sheer instead of plywood. Make the wiring accessible from inside a walk-able attic space.

      Moving away from a plywood deck would allow active cooling of the back of the panels.

      Offer a full roofing package including skylight, roof door, and vent stack options. Design an attractive trim package.

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