Author Topic: Is there a downside to no-cost solar panels?  (Read 2494 times)

AMandM

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Is there a downside to no-cost solar panels?
« on: December 21, 2017, 07:55:27 AM »
I was recently given a sales pitch by a rep from a solar panel company.  The deal is, they install panels on my roof. There's no cost to me, but they own the panels. In exchange for my roof space, they sell me the power generated from my roof at a lower price than the local suppliers.

So no cost upfront, but certain savings. I can't see a downside to this, but that makes me nervous. Is it too good to be true?

Part of what makes me nervous is that I can't see how this is profitable for the company. We considered buying a solar array a few years ago, but because of the structure of tax credits etc. in our state the payback period was too long for our comfort (15 years).  What makes it a good deal for this new company?

Any advice or insight welcome! Thanks!

Syonyk

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Re: Is there a downside to no-cost solar panels?
« Reply #1 on: December 21, 2017, 08:01:46 AM »
They sell you power for more than it's costing them.

It'll be basically impossible to sell your house during the contract. Buyers don't like to deal with that sort of nonsense.

You'd better hope your roof holds out for the term.

boarder42

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Re: Is there a downside to no-cost solar panels?
« Reply #2 on: December 21, 2017, 08:03:34 AM »
the new company is making a profit off of this or they wouldnt do it. 

Typically when solor is installed they recommend you replace your roof.  so now you have that added costs.  if you dont in the future you'll need a new roof and have to pay extra for the panels to be removed and the roof replaced.

you can easily figure out if its a good deal for you to have it installed and reep the rewards yourself.  if you live on a coast its highly probable its lucrative for you if not it depends on your rates.  at the end of the day its a math problem. 

a few years ago solar cost a lot more than now. 

radram

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Re: Is there a downside to no-cost solar panels?
« Reply #3 on: December 21, 2017, 08:07:13 AM »
Their might be a downside. Their work will most likely create some legal claim to part of your property or land. It might not matter to some, but it might drive away some future buyers who are not willing to give up those rights.

You are also giving up your rights to benefit from future improvements. If prices continue to drop, you might be locking in to HIGHER prices indefinitely with no way out. How much exactly are you expecting to save, and is there a guarantee and a sunset on their contract?

I was looking at a piece of land this past summer that entered a non-development agreement with the federal government. They were paid very will to enter the program, but the land is now almost worthless in that the owner no loner controls what can happen on this land. They are unable to sell the land at about 20% of full market value. This example is very likely more extreme than yours, but something to consider.

Broadway2019

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Re: Is there a downside to no-cost solar panels?
« Reply #4 on: December 21, 2017, 11:23:32 AM »
I had Vivint Solar install panels for free through MD program. So far everything seems fine. They even had extra insurance in case something happens and explained if our roof is damaged they come out to take the panels off free of charge.

I think a lot of people on here are risk-averse. No problems as of now w/ Solar and am saving about $100 a month. Didn't cost us anything.

Syonyk

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Re: Is there a downside to no-cost solar panels?
« Reply #5 on: December 21, 2017, 12:04:33 PM »
...and explained if our roof is damaged they come out to take the panels off free of charge.

Let us know how that works if you actually need them to do it.

Quite a few people have discovered that what the sales guys say and what actually happens if something goes wrong with the system are worlds apart.

I don't think it's risk adverse to not let someone else lay claim to my property...

Broadway2019

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Re: Is there a downside to no-cost solar panels?
« Reply #6 on: December 21, 2017, 12:15:12 PM »
I guess maybe I am not thinking about this the right way, but I still can't understand why someone would not want free solar panels and to save on electricity.

Maybe I am naive but i read through everything and it seems legit. Nothing I can do since I have solar. Our house is new construction so hopefully no issues with the roof so I guess we will never know.

Syonyk

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Re: Is there a downside to no-cost solar panels?
« Reply #7 on: December 21, 2017, 01:30:02 PM »
I guess maybe I am not thinking about this the right way, but I still can't understand why someone would not want free solar panels and to save on electricity.

I can't speak for everyone, but I can tell you why I wouldn't want one of those companies mucking about on my roof/house.  An incomplete list:

- They're making money somewhere in the bargain.  Whatever they can offer, I could presumably do better if I self funded solar.
- They're likely to be doing the absolute cheapest install possible, see previous point.
- Whatever they do, it puts a lien on the property (or some other claim) which makes it difficult to sell, and I don't like claims on my property like that.

I'd rather put up a system of my own design, for my own needs, and not have to fit into some standard cookie cutter mold.  Which will be more expensive than a comparable microinverter based system, but will give me sustained off grid running, which I value.

Quote
Maybe I am naive but i read through everything and it seems legit. Nothing I can do since I have solar. Our house is new construction so hopefully no issues with the roof so I guess we will never know.

I'm sure it's legit in that they'll install panels, but I also don't trust solar companies to be around long term right now.  There's a ton of flux in that market.

boarder42

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Re: Is there a downside to no-cost solar panels?
« Reply #8 on: December 21, 2017, 01:44:51 PM »
yes i dont think risk aversion is the reason you dont let someone install "free" panels on your roof and reduce your energy costs. 

I think many here would find me to be one of the more risky players in this forum and there is little chance i would ever let a company install these on my roof. 

for the reasons syonyk has defined in multiple posts here.

I mean cmon think about it - regardless of the lien.  if they can do this make money AND give you a tax break you can do it yourself higher contractors even if you have to and make more of a profit.

Broadway2019

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Re: Is there a downside to no-cost solar panels?
« Reply #9 on: December 21, 2017, 02:02:12 PM »
Yes but then you pay for the solar panels.  Also, we can give the solar panels back at any time.

I'm just saying I have had zero issues so far. Maybe I will have a different response in 5 years, maybe not.

Slow2FIRE

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Re: Is there a downside to no-cost solar panels?
« Reply #10 on: December 21, 2017, 02:05:21 PM »
Disadvantage:
If you want to sell your house the new purchaser has to agree to the terms of the power provider or you have to work out a deal with the solar company to buy out the remainder of your term.
You don't get the full benefits of solar (just lower cost electricity instead of electricity paid for by acquiring the asset).

Advantage:
You don't have to come up with the upfront costs of a solar panel installation

Catbert

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Re: Is there a downside to no-cost solar panels?
« Reply #11 on: December 21, 2017, 02:08:29 PM »
I live in a HCOL sunny city so many people have solar electricity.  For a few years (less so now) solar leases were very popular.  Real Estate agents tell me that solar leases have become the nightmare/deal killer in home sales.  People don't want to take on the long term lease and it's expensive for the seller to buy out the lease.

 

Syonyk

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Re: Is there a downside to no-cost solar panels?
« Reply #12 on: December 21, 2017, 02:17:22 PM »
I mean cmon think about it - regardless of the lien.  if they can do this make money AND give you a tax break you can do it yourself higher contractors even if you have to and make more of a profit.

Right.  And a lot of those sales pitches (at least the ones I've seen) seem to involve some rather creative estimations of power rates increasing, which I find somewhat unlikely, as utilities are building out large solar/wind farms of their own.  Maybe it'll pay off.  Maybe it won't.  And you're locked into a seriously long term contract with them, and since There Ain't No Such Thing as a Free Lunch, you're not getting the better end of the deal, typically.

Remember, this is a forum where people tend to be pretty good with money and savings - so if it makes sense to do so, prepaying 20 years of power at a nice discount isn't that difficult.  It's, what, $20k-$30k for a typical house?  That's locking in power pricing regardless of what markets do, regardless of what power prices do.  Is it a good deal or not?  Well, state your assumptions and do the math.

For me, I plan to build a system that will never pay off in terms of power cost, simply because I value being able to run grid down for long periods of time.  It's not that likely to get used in that mode, but I've got a pure electric house and, importantly, a fairly deep well (~250' to water).  I'd like to be able to ride through problems with the grid at a minimum level of functionality, and that involves a system that's not quite as cheap as the microinverter based stuff.  But, flip side, I can run my whole house without grid power (and I plan to do as much of the dirty install work myself as I can - that depends on the electrician I find to supervise the work).  Probably AGM in the crawlspace unless I find someone willing to work with me on lithium iron.

Yes but then you pay for the solar panels.  Also, we can give the solar panels back at any time.

I'm just saying I have had zero issues so far. Maybe I will have a different response in 5 years, maybe not.

I don't doubt you've had zero issues so far, but I question the cost effectiveness based on actual numbers instead of sales guy pitch numbers, and I question your assertion that they'll be responsive if you decide to change something or sell the house or something breaks or (etc, etc, etc).

Also, what are the terms of the lien/claim on your house?  What's considered an asset of the company, were they to go bankrupt in the next 15-20 years and have creditors looking for whatever they can get?  Just the panels?  Your roof?  The house?  Would the removal leave you needing a new roof because someone literally came and ripped it out of the roof with crowbars?  There's a lot of uncertainty in solar, and solar companies are quite reliably going out of business.  I wouldn't bet on something that requires them to be around long term.

Fundamentally, this is the type of thing that I imagine sounds like a great deal to a typical family - in debt, minimal savings, big power bill, but wants to "feel green" or be able to get the conspicuous conservation credit of being able to say they have solar panels on their house.  I question that it's actually a good deal compared to the alternatives, given the general nature of the people on this forum.

Syonyk

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Re: Is there a downside to no-cost solar panels?
« Reply #13 on: December 21, 2017, 02:18:56 PM »
Real Estate agents tell me that solar leases have become the nightmare/deal killer in home sales.  People don't want to take on the long term lease and it's expensive for the seller to buy out the lease.

Yup.  Fairly regularly on r/solar, people are asking questions that amount to, "How can I sell my house with this stupid solar lease on the roof?"  Because the solar company (who generally doesn't bother responding to calls) has to approve the buyer, approve the buyer's credit, etc, and often appraisals don't include the value of "someone else's solar panels on the roof."  So it becomes a nightmare for the seller, because most buyers say "Meh." and go find a house that's less complicated to buy.

Broadway2019

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Re: Is there a downside to no-cost solar panels?
« Reply #14 on: December 21, 2017, 02:26:05 PM »
The paperwork I signed states they do not put a lien on my house. I just looked at the contract. Maybe I will report back in a couple years, but for now, I haven't had issues.

radram

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Re: Is there a downside to no-cost solar panels?
« Reply #15 on: December 21, 2017, 10:46:26 PM »
Yes but then you pay for the solar panels.  Also, we can give the solar panels back at any time.

I'm just saying I have had zero issues so far. Maybe I will have a different response in 5 years, maybe not.


Are you saying you signed a contract to have a company place solar panels on your home at no cost to you, and that you can give them back the very next day the install is complete and the company will say OK, no problem and just take them back?

This just doesn't sound possible. How can this company protect their outlays?


bacchi

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Re: Is there a downside to no-cost solar panels?
« Reply #16 on: December 21, 2017, 11:15:29 PM »
The cost to remove panels and replace them on a roof are minimal (unless your roof is a 10/12 and 3 stories up, I suppose.) The roofers just shrugged when I got bids.

That said, lease-to-own deals are for the lessor, not the lessee. Buy it yourself and reap all the benefits.