Residential Solar Power: Lease vs Buy

Discussion in 'Environmental Discussion' started by zenMachine, May 16, 2012.

  1. zenMachine

    zenMachine Just another Onionhead

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  2. dkelly

    dkelly Member

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    No, but I'm interested in hearing any feedback as well.
     
  3. schorert

    schorert Member

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    I just purchased through 1 block off the grid, 1bog.org. I investigated lease vs purchase and in my state, MA, purchase is definitely the way to go. 1bog is primarily a lease company, but arranged a purchase for me at a good price.
    A lease will put panels on your home and give you cheap or free power, but the payback in residential solar arrays is in tax incentives and energy credits (SRECS). If your state offers SRECS...BUY.

    oh, I have a 29 panel array that has generated 4Mwh of electricity in six months. This 4,000kWh is worth $800 in utility credit(.20kWh) and $2000 in srec value (Srecs are currently valued at $540/MWh).
    here's a look at my array production, it's been a cloudy month!

    https://enlighten.enphaseenergy.com/public/systems/deQc40429
     
  4. Vege-Taco

    Vege-Taco Junior Member

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    We weighed our options and found purchase to be the better deal. It all depends on how much your state, utility company, and any other subsidies will help out. Our system ended up costing us about $2 out of pocket per Watt. We have a 12.5 kWh system and it saves us about $2400 per year in electricity. This means that from our standpoint, it will pay for itself in roughly 1/2 of it's useful lifespan.

    NOTE: We also had a 16-battery pack installed, along with the necessary inverters, so your costs could be quite a bit less if you aren't interested in battery backup.
     
  5. wick1ert

    wick1ert Senior Member

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    Enjoy those SREC prices while you can. We got screwed here in DE, as they're buying them all cheap from the large solar farms that came online in the last year or two here and us small residential owners aren't getting anything now. In fact, I believe I've got 2 or 3 of them just sitting there.
     
  6. schorert

    schorert Member

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    We have SREC price support for ten years, so our "floor" is $300 and our ceiling is $600. SREC demand outstripped supply this quarter in MA by 100%, and mass doesn't allow SREC sales from other states...so while production is up sharply, it will take some time to exceed demand. Looks like something like 30% of srec sales in Delaware come from outside the state...


    though I must say, I'm curious about the current flooding of the state by solar leasing companies. As SREC value erodes, solar leasing companies suddenly risk holding capital investments that are losing value rapidly. If the ROI for a system is 4yrs, leasing companies are faced with the very real prospect of having equipment that will barely pay for itself before the market collapses and the free market takes over.
    This was the ONLY reason I was considering a lease, that there is a very real possibility that the entire solar leasing industry would be tits-up in five years...and I could end up buying my system from a creditor for pennies on the dollar.
     
  7. SageBrush

    SageBrush Senior Member

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    You are saving 50 - 80 cents a kwh for the next 10 years then. Wow. Sounds like you made out like a bandit, but I'm curious what you paid for installed $/watt cost net after tax credits and state subsidy.

    Btw, I won't be surprised if your 12 month average production comes in near 1.6 kwh/watt. That is great; quite a bit more that I would have guessed from what I remember of MA, even knowing this winter was mild.
    Sharp reasoning, although it sounds like you might own the array outright in 4 years anyway, depending how much it cost you.
     
  8. doho817

    doho817 Junior Member

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    I have a 4.6 KWH system and my electric company (Florida Power & Light) had an incentive program which paid for half the cost. The system had been only on for 3 months so far and my last bill was $ 6.05.
     
  9. schorert

    schorert Member

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    I have a 29 panel system rated for 6.5kw, as the weather warms in new england the efficiency of the panels drops off and we haven't topped 6kw in a month....but the longer days more than make up for it.
    Out of pocket, (after the 30% fed subsidy, state 1k tax credit, and $9k state rebate) I'm at about $2.25 per watt installed ($14k). My elec utility rate is .20kwh flat rate.
    On a sunny day I generate about $8 worth of power, and $20 worth of srec value...my neighbors cannot grasp this concept and think I'm some kind of nut.....ok by me.
     
  10. SageBrush

    SageBrush Senior Member

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    ok, thanks for the info. My earlier calcs assumed a 5.2 kW array, so your annual production is more along the lines of 1.3 kwh/watt*year. If you conservatively figure another $1/watt for inverter replacement over the next 30 years, then you have a paid off array in as little as 3.125 years, or at most five years. Then free electricity for the rest of your life. This is equivalent to signing a deal for electricity fixed at 4 cents a kwh (at most) for the next 30 years.

    Awesome, awesome deal. Thank your neighbors for being so clueless, that the jumbo incentives exist.
     
  11. schorert

    schorert Member

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    The enphase micro-inverters are warranted for 25yrs(parts). The panels too are warranted for 25yrs, so hopefully both companies are still in business!

    OH OH OH, I almost forgot...Since my bills are now $0....NSTAR charges me $3.50 a month "generator fee" for me to use their infrastructure! go for it NSTAR!

    I investigated Solar about three years ago and the payoff was 17 years! I stumbled upon a leasing salesperson in a home improvement store who reluctantly explained srecs and the fed tax credits to me....but he assured me leasing was the way to go. I immediately went home and began researching a purchase. If the lease company is so eager to get a system on my roof, there must be a big payoff for them. there is!

    What's great about the system is, once you turn it on, it makes you money. It requires no input or maintenance from me, it just runs and you basically can't stop it! There aren't many things in my home that require NO maintenance.
    Also, the required state energy audit discovered a huge gap in my heat/ac duct in the attic...so my energy usage should be way down in the dog days of summer.
     
  12. zenMachine

    zenMachine Just another Onionhead

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    In summary, until subsidies run out, buy is better than lease, correct?
     
  13. SageBrush

    SageBrush Senior Member

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    Wrong, wrong, wrong.

    The deal is *so* much better than that:
    You invested $14,000 today;
    Over the next 10 years you are paid $26910 up to $53820 (depending on SREC)
    Array electricity is free for the life of the array.
     
  14. schorert

    schorert Member

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    shhhhhhh! it's our little secret

    $40k in power
    $30-60k in srecs...hmmmm...for $14k.
     
  15. austingreen

    austingreen Senior Member

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    It depends on the state, but in Massachusetts and Texas this is definitely true.

    I don't know why my cousin in boston doesn't have solar. I'll be sure to ask him.
     
  16. SageBrush

    SageBrush Senior Member

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    I get the feeling the better the deal, the less people believe you :D

    A person inclined to aggressive business tactics might be able to build a realty empire just on the basis of the PV discount, amounting to upwards of 1/3rd the price of the house. In effect, the value of the rental is the roof LOL

    Btw, would you explain why you think the leasing business might go bust in 3-4 years, if the SREC is guaranteed for 10 ?
     
  17. wjtracy

    wjtracy Senior Member

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  18. schorert

    schorert Member

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    because there is an explosion of solar arrays being installed in MA, and I've seen what's happened to srecs along the east coast. Ma does seem inclined keep raising the alternative energy requirements to utilities. But overall I think that there's too much growth in mass to keep the current srec program alive.
    The whole industry is a "bubble", the solar industry is NOT sustainable without fed and state incentives...because at current system costs and utility rates the payback is too long (without subsidies my payback would be 17yrs as opposed to 4). Once you get Mitt in the whitehouse you can kiss the 30% fed incentive goodbye...even though green jobs are one of the only growth sectors of the economy.
    So green jobs are growing, but alot of this is due to fed investment. Mitt will cut these incentives and this sector will shrink while he diverts spending to oil co's through tax breaks for exploration.
     
  19. devprius

    devprius /dev/geek

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    We're in the midst of getting a system installed by Sungevity. It's a 4.94 KW system. We're doing the lease option with a partial pre-payment. Lease starts out at about $92 a month and rises 2.9% a year. Total number of lease payments (with the prepayment) will be around $23.5K. Including the cost of the lease payments, the system is supposed to save us about $80 a month. It's supposed to cover about 60% of our electrical needs.
     
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  20. Corwyn

    Corwyn Energy Curmudgeon

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    First, buy it on credit. Second, as I am sure you know, prices for panels have come WAY down. If Obama doesn't succeed at getting a tariff on imported panels, you might be able to buy panels for a monthly payment, less than your current monthly electric bill. In other words, payoff is immediate .

    At the risk of sounding self-serving. Good energy audits should be done before any investment in renewable power. Many needed improvements are an even better deal than solar (as well as reducing any downside risk of solar investment).
     
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