Solar City Offers Zero-Down Financing For Home Builders
SolarCity, 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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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.
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.
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.
” 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.
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.
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%.
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.
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.
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.
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.
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$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.
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.
Cost after rebate has always been a thorn in my side. I will not get much as I am retired and and don’t make enough to get the 30% Fed part. Also as of now that is going away in 2016. I also agree with Marion above as the cost doesn’t come down when installers can say you will get about $8000 back on a some what average instillation. When it becomes like a Vehicle when you add upgrades to your car it is financed into the loan then and only then will it really catch on like it should. A law that makes possible for a lender to add it without any cost and roll it into your existing loan if they see that you can 0 out your bill and maybe get some money returned to the home owner it would only be a reasonable upgrade. Give any rebates to the lender to make up for any interest rate deficiencies. If there are not any then put it towards the loan as a down payment and further make it cost effective.
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 !
As other commentators have mentioned, a zero down solar lease makes what would have already been a bad deal, monumentally worse.
Leasing solar panels, as opposed to buying them, costs significantly more over the long run and also lowers the value of your home. Purchasing the panels, by contrast, adds value to your home, costs less and you actually get to own the panels too.
This excellent article has more specifics on why it’s a bad idea: http://gsesolarlasvegas.com/solar-purchase-increases-home-value-while-solar-lease-may-decrease-home-value/
“lowers the value of your home”
Speculation.
Even the title of your linked article points that out in its title – Lease May Decrease Home Value.
You wouldn’t happen to be someone employed on the selling side of solar, would you? Those people seem to have very strong anti-lease opinions.
We might not have a scientific study to prove how leased solar panels lower your home’s value, while making it more difficult to sell, but we do have mountains of anecdotal evidence that points in that direction.
SolarCity won’t even let you transfer a lease contract to a new home owner, unless that owner meets their stringent credit requirements with a credit score in the 700 plus range. That alone is unattractive to any potential home buyer.
The fact of the matter is the high installation costs of solar panels already make them a tricky proposition that only works if you can get the cost per KW down to a reasonable rate (hopefully something below $2 per KW). SolarCity’s cost per kilowatt is in the $5 range and you don’t even own the system after the lease is over. Not a smart move in my opinion.
We have mountains of anecdotal evidence that saw palmetto treats baldness, chronic pelvic pain, chronic nonbacterial prostatitis, and urinary problems due to prostate conditions. However actual studies do not support any of these claims.
And we don’t have “mountains” of anecdotal evidence. Just a few here and there statements. Speculation.
You’re sounding more and more like you’re in the business. Any truth in that?