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Anyone use Solar City?
Old 08-02-2014, 05:52 PM   #1
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Anyone use Solar City?

Hi everyone, Solar City has recently expanded into the Las Vegas market. I have two options for solar panels. I can pay outright to the tune of $21k (I would get a 30% tax credit so maybe $15k) or Solar City will install and maintain the panels and I simply pay them for my usage. There are no out of pocket costs. It is a 20 year contract. I will lower my power bill by about 20% and it's also eco-friendly.

I'm just wondering if anyone has done business with them and any thoughts in general are welcome. Solar City has a strong relationship with Elon Musk of Paypal, SpaceX, and Tesla Motors fame.

This sounds like a great deal but it also seams a little too good to be true.

Thanks
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Old 08-02-2014, 07:04 PM   #2
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Great question! Solar City has a very different model from the 'other guys' around here, and I've been wondering about this, too, especially how the maintenance part has worked out, if anyone has needed that.
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Anyone use Solar City?
Old 08-02-2014, 08:37 PM   #3
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Anyone use Solar City?

I know a few folks who have used them, and are happy with the service so far. In addition to the panels themselves, they have some nice online tools so you can monitor your energy production throughout the day, and going back in time, and see your net energy usage.

For me, the biggest issues are:

A) transferring ownership in the event of a home sale (I've heard a few stories about this being painful and/or a barrier to getting one's home sold)

B) being locked into such a long term lease. I can imagine that if the cost of panels continues to fall, this could look like a much less favorable deal in 7-10 years.

I'd definitely be interested in hearing from anyone who has researched those 2 issues in more detail.
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Old 08-02-2014, 09:33 PM   #4
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For me, the biggest issues are:

A) transferring ownership in the event of a home sale (I've heard a few stories about this being painful and/or a barrier to getting one's home sold)

B) being locked into such a long term lease. I can imagine that if the cost of panels continues to fall, this could look like a much less favorable deal in 7-10 years.

I'd definitely be interested in hearing from anyone who has researched those 2 issues in more detail.
About item A above, I recently read that in AZ some homeowners have had problems selling their homes with a leased array. A paid-for array will add value to the home (don't know how much relative to the initial cost), but a recent seller with a leased array lamented that he had to cut the price by $15-20K or something like that in order to sell. Some of his potential buyers walked away without making any offer when they learned of the complication it created. It was because the lease transfer must be approved by the solar company, then the new owner must sign a new lease.
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Old 08-03-2014, 09:40 AM   #5
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Related discussion on "Solar Farm": Bogleheads • View topic - Solar Farm, anybody buy in?
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Old 08-03-2014, 12:55 PM   #6
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We bought a Solar City system in late 2007, just as they were getting started. We were in California (just down the street from their headquarters actually) and they did not have the 'lease/maintain' option at the time.

The system of 21 195W Sanyo Panels was installed quickly and very professionally. They did a good job running the conduit in places that were hidden and painted the exposed conduit black to match our roof. There was a single large inverter mounted on an outside wall (I think they have smaller inverters built into the panels now). Our inverter had a recall about 2 years later and SolarCity came out and did the rework. I was very impressed with their installation and service.

Maintenance was very easy. The winter rains kept the panels mostly clean. I would climb up once a year with a bucket of soapy water and a brush to get any caked on dirt off the panels. Not sure if it helped. In fact, I later found a white paper written by Google that analyzed this issue and it came to the conclusion that panels in Mountain View, CA (a few miles down the road) kept producing just fine with an occasional rain shower. Additionally, they provided a tracking system to monitor the panels and report the production each hour. So you could see if there was an error or fault (we never had a problem).

On the financial side, we probably bought into solar too early. Cost of panels and systems have gone way down. At the time, there was a per Watt California rebate. Solar City worked into the price so we just paid less and the rebate went back to them. There was also a Federal Tax Credit of $2k that went into our 1040 that year. Solar City made a big deal of the value the system would add to the resell value of our home. But our agent didn't think it would since it was hard to value and there very few comparable sales to make an analysis.

The last factor was around usage and our behavior. With the installation of the panels, we switched to 'time of use' metering with our electric company. Meaning that usage from noon to 6pm cost more than the rest of the day. So we cut way down on our power consumption (dishwasher, washer, dryer, AC, lights, etc) during those hours. We were very conscious about using power during those hours. The upside of ToU metering is the panels are most productive and feedback the most back into the grid during those hours. So we were getting the highest rate for our production and lower rate for most of our consumption. But it never got to zero and certainly didn't get money back from the utility. At the end of the month, our power bill was usually just a few dollars instead of $100-$150. Then PG&E would 'true up' in October and we would pay any accumulated costs.

Overall, I think adding solar was a good idea. But we probably should have waited a few years for the economies of scale to kick in...

Happy to answer any questions.

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Originally Posted by retirementguy1 View Post
Hi everyone, Solar City has recently expanded into the Las Vegas market. I have two options for solar panels. I can pay outright to the tune of $21k (I would get a 30% tax credit so maybe $15k) or Solar City will install and maintain the panels and I simply pay them for my usage. There are no out of pocket costs. It is a 20 year contract. I will lower my power bill by about 20% and it's also eco-friendly.

I'm just wondering if anyone has done business with them and any thoughts in general are welcome. Solar City has a strong relationship with Elon Musk of Paypal, SpaceX, and Tesla Motors fame.

This sounds like a great deal but it also seams a little too good to be true.

Thanks
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Old 08-03-2014, 04:25 PM   #7
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We bought a Solar City system in late 2007, just as they were getting started. We were in California (just down the street from their headquarters actually) and they did not have the 'lease/maintain' option at the time. .... At the end of the month, our power bill was usually just a few dollars instead of $100-$150. Then PG&E would 'true up' in October and we would pay any accumulated costs.

Overall, I think adding solar was a good idea. But we probably should have waited a few years for the economies of scale to kick in...

Happy to answer any questions.
Thanks for all that info. Can I ask - what was the total installed cost, with and without rebates, credits, etc? From the bogleheads thread just linked, it didn't seem to pencil out on the economics, but there are the environmental benefits.

You probably have relatively high kWh rates in CA, which makes the payback work out better in any case. We are at ~ 11 cents kWh here in IL, I have never been able to get it to pencil out for us. And with extended paybacks, yes, it seems that the costs go down each year about as much as the savings. So from a pure dollar view, it probably makes sense to wait. But if the rebates & credits dry up, that changes the calculation for the homeowner.

A little side note - I just read that in Germany, they have so much installed solar, that they are considering having new installs point more East-West. That reduces the total power they will produce, but it turns out they are starting to get more than they need at noon, so spreading out the power works out better on a system level.

-ERD50
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Old 08-03-2014, 11:34 PM   #8
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Thanks to all for the comments.

I just finished reading my lease agreement. The difficulties of selling my home were my primary concern. The lease can be transferred (it does not renew, just transfers) to a new buyer as long as they meet Solar City's credit requirements, around 760. The average buyer will probably not meet this requirement but the company is putting a 20 year investment on your house so it seems fair. Why wouldn't a prospective buyer with great credit want cheaper power that is better for the environment?

I also just signed up for a time of use agreement with my utility. Expensive rates between 1-7pm 33 cents kwh but cheap the other hours, 9 cents.

The regular rate here is 12.5 cents kwh, Solar City is 9.9 cents. It is definitely a good idea to get the panels and ToU agreement.
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Old 08-04-2014, 03:13 AM   #9
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Have you thought about prepaying the 20-year lease? That's what we did for our Solar PV system through SolarCity installed last year. Since the 20-year lease has been paid, shouldn't be an issue when/if we decide to sell our house later down the road. We just aimed to "zero out" our bill, less the connection fee the utility company charges for being connected to the grid. Instead of paying an average of $130 per month here in Hawaii prior to Solar PV systems, we now pay $17 a month (HECO connection fee) and with excess power generated going back to the grid, we actually paid $9 two months ago and got a credit for $3.92 last month. Instead of the $0.34 per kWh that HECO charges, we effectively pay something like $0.083 per kWh...for the next 20 years.
We haven't had any issues with the PV system so I cannot comment on the maintenance piece...but "SolarCity promises to take care of any repair costs for the next 20 years", so shouldn't be any worries there.
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Old 08-04-2014, 11:56 AM   #10
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Thanks for all that info. Can I ask - what was the total installed cost, with and without rebates, credits, etc? From the bogleheads thread just linked, it didn't seem to pencil out on the economics, but there are the environmental benefits.

You probably have relatively high kWh rates in CA, which makes the payback work out better in any case. We are at ~ 11 cents kWh here in IL, I have never been able to get it to pencil out for us. And with extended paybacks, yes, it seems that the costs go down each year about as much as the savings. So from a pure dollar view, it probably makes sense to wait. But if the rebates & credits dry up, that changes the calculation for the homeowner.

A little side note - I just read that in Germany, they have so much installed solar, that they are considering having new installs point more East-West. That reduces the total power they will produce, but it turns out they are starting to get more than they need at noon, so spreading out the power works out better on a system level.

-ERD50
I seem to recall the top line quote was ~$32k including all parts and install along with their monitoring system. The bottom line after all tax credits, incentives, discounts, etc was around $21k.
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Old 08-04-2014, 03:04 PM   #11
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...I just read that in Germany, they have so much installed solar, that they are considering having new installs point more East-West. That reduces the total power they will produce, but it turns out they are starting to get more than they need at noon, so spreading out the power works out better on a system level...
Smoothing out the solar production during the day may make sense for Europe where the electric demand does not peak at midday like in the US where our A/C's are running flat-out. The demand rate or Time-of-Use rate in the US typically reflects that higher usage in the afternoon.

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... I also just signed up for a time of use agreement with my utility. Expensive rates between 1-7pm 33 cents kwh but cheap the other hours, 9 cents.

The regular rate here is 12.5 cents kwh, Solar City is 9.9 cents. It is definitely a good idea to get the panels and ToU agreement.
I have had demand rate for more than a decade. The rate is $0.0717/kWh in off-peak hours, and $0.2122/kWh in between 1PM and 8PM. The flat rate is $0.1283. The utility company bill has always shown us what we save using the Time-of-Day rate. For example. it's $40 for the month of July for a total bill of $327 for 2670 kWh.

All we have done is to set the pool pump and water heater timers to avoid on-peak hours. We also do not run the washer and the dyer during peak hours.

With the PV cost getting so low, I would have jumped on the solar bandwagon if it were not for my tile roof. It caused me enough trouble and expenses without a solar array sitting on top. On top of that, my roof orientation is all wrong.
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Old 08-04-2014, 03:20 PM   #12
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We're in Vegas too and have considered it but the math doesn't work yet for us.

Our total electric bill/year is about $2400 on average (the house is super well insulated and we have smart thermostats that cut our bills further).

At $21k installed, it would take us more then 8 years to break even assuming every electric bill were zero.

Think we'll wait till the price comes down further.
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Old 08-04-2014, 03:59 PM   #13
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We're in Vegas too and have considered it but the math doesn't work yet for us.

Our total electric bill/year is about $2400 on average (the house is super well insulated and we have smart thermostats that cut our bills further).

At $21k installed, it would take us more then 8 years to break even assuming every electric bill were zero.

Think we'll wait till the price comes down further.
Looks like you could save $500 a year with the lease/maintain option and it wouldn't cost you anything. My power bill is $1200 per year, 2700sq ft home but I don't have kids and I keep my AC pegged at 85 degrees during the day.

Also, I just got off the phone with Solar City and the credit requirement is only 680, much more doable when it comes time to sell. The guy said it has come down from 720 over the past two years.
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Old 08-04-2014, 04:12 PM   #14
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Looks like you could save $500 a year with the lease/maintain option and it wouldn't cost you anything. My power bill is $1200 per year, 2700sq ft home but I don't have kids and I keep my AC pegged at 85 degrees during the day.

Also, I just got off the phone with Solar City and the credit requirement is only 680, much more doable when it comes time to sell. The guy said it has come down from 720 over the past two years.

That's good to know about the credit requirements. DH and I were just talking about solar over the weekend so we'll take a look at them.


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Old 08-04-2014, 08:09 PM   #15
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I seem to recall the top line quote was ~$32k including all parts and install along with their monitoring system. The bottom line after all tax credits, incentives, discounts, etc was around $21k.
Thanks.

If I take your middle number for savings ($125/month), and ignore connection fees, I get ~ 14 year payback at the subsidized number, and ~ 21 year payback un-subsidized.

That ignores increases in kWh, but it also ignores opportunity costs. $21,000 in your portfolio at a conservative inflation adjusted 3% WR would provide $630 against a $1500 savings, netting just $870 in annual savings, taking subsidized payback to ~ 24 years . Well, a little less as the inflation adjusted income may not fully offset kWh increases, but clearly somewhere between 14 and 24 years.

And after 20-30 years, the investment will probably still be worth something, and may have grown considerably, while I'd imagine 20-30 year old solar panels won't be worth much at all, and certainly have no chance to appreciate in value (newer models will be more efficient and cost effective, they'll probably need to come down for a roof replacement, etc).

There is a good environmental benefit I think, but if it pencils out like this with CA rates for kWh, I can't imagine this will be something I'll be doing in my lifetime in IL, unless our rates go through the roof.

-ERD50
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Old 08-04-2014, 08:35 PM   #16
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One other question, if you live where hail is likley (over 20 years) who pays for damage to the arrays in situations where the hail is a roof destroyer. East of the rockies this could be a big thing.
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Old 08-09-2014, 10:40 AM   #17
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DW and I visited an 55+ "resort" outside of Winchester VA a couple of days ago. I'm spending a lot of time in the area caring for my mom (MRSA, hip replacement, old, etc), so we dropped in mostly out of curiosity. We talked to the sales lady, and amongst the information she gave us was that Solar City installation was a standard feature on each of the homes they will be building. If you go with the standard package they will guarantee you a 30% or 40% (I forget which) lower electric bill than a normal non-solar home. They also have an upgrade package that would guarantee you a $0 electric bill. And the upgrade was only around $7 or $8K.

Like I said, we were just burning time so I haven't really followed it up, but I can't see how a solar installation like that could be so effective, especially in the Shenandoah Valley/mountains area. We looked into solar a few years ago at our house at the Eastern Shore of MD, and there was no way it would be economically feasible. Is Solar City really that much different than other systems that it would become cost effective? We're not going to be moving to the "resort", so I don't really want to spend too much time researching this, but I'm curious if it's likely to be a boondoggle or a working feature.
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Old 08-09-2014, 11:45 AM   #18
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DW and I visited an 55+ "resort" outside of Winchester VA a couple of days ago. I'm spending a lot of time in the area caring for my mom (MRSA, hip replacement, old, etc), so we dropped in mostly out of curiosity. We talked to the sales lady, and amongst the information she gave us was that Solar City installation was a standard feature on each of the homes they will be building. If you go with the standard package they will guarantee you a 30% or 40% (I forget which) lower electric bill than a normal non-solar home. They also have an upgrade package that would guarantee you a $0 electric bill. And the upgrade was only around $7 or $8K.

Like I said, we were just burning time so I haven't really followed it up, but I can't see how a solar installation like that could be so effective, especially in the Shenandoah Valley/mountains area. We looked into solar a few years ago at our house at the Eastern Shore of MD, and there was no way it would be economically feasible. Is Solar City really that much different than other systems that it would become cost effective? We're not going to be moving to the "resort", so I don't really want to spend too much time researching this, but I'm curious if it's likely to be a boondoggle or a working feature.
It's hard to comment without knowing '30-40%' of what, and a '$7-$8K upgrade' from what?

AFAIK, Solar City doesn't have any magic mojo - solar panels and inverters are pretty much commodity items.

There could be all sorts of numbers you aren't seeing - for example, maybe the basic setup provides a 50% savings on an average bill, and Solar City takes 10% of that, leaving 40% for the homeowner (just speculation for illustration of the possibilities)? But if they did something like that, they could offer a lower up-front cost, since they'd be getting future $.


I know Tesla gets other credits from other manufacturers who aren't meeting their mandates for certain vehicle types (I cannot call them 'zero pollution vehicles'), so maybe Solar City has some other incentives that you aren't seeing.

Either way, if it pencils out when all the numbers are considered, great - but I'd be concerned about by whom (grammar?) and how these 'guarantees' are being made.

-ERD50
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Old 08-09-2014, 12:36 PM   #19
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... I can't see how a solar installation like that could be so effective, especially in the Shenandoah Valley/mountains area. We looked into solar a few years ago at our house at the Eastern Shore of MD, and there was no way it would be economically feasible...
I have posted the following insolation map before, but it is worth repeating here. The map is based on actual data, and shows that solar energy received does not simply vary with latitude, but is heavily reduced by cloud cover. See how New Orleans has the same average insolation as North Dakota. Yet, New Orleans is at a lower latitude than Arizona, let alone North Dakota. North Dakota has fewer cloudy days, despite its high latitude.

Note that the map legend is somewhat misleading. The map color represents the daily solar power per square meter of collector surface, tilted south at an angle equal to the latitude (optimal for a fixed tilt throughout the year). It is the daily energy averaged out over a year, hence the "per month" description is not applicable

The place in the US most suitable for solar farms is the Southwest, where low humidity means sunshine most days of the year. Other Western states and Florida are next in terms of solar radiation. The states east of the Mississipi river tend to have more humidity and cloud cover, hence reduced sunlight.

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Old 08-09-2014, 01:37 PM   #20
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I checked out company reviews on yelp. Solar City is averaging 2 1/2-3 stars. I little to low for my comfort zone and a 20 year commitment.
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