Would you buy a house with a solar lease?
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Anonymous
| We are looking at a home that checks all the boxes, but it has a solar lease - electricity is free but we can’t sell any SERCs. Seller says it’s irrevocable and they save about $2000 in electricity a year. I don’t see the downside other than the lost SERC income. Reg flag or good thing? |
Anonymous
| No |
Anonymous
| F No. |
Anonymous
| No, let them pay it off before the sale. |
Anonymous
| What's the issue for those who say no? |
Anonymous
OP here. It can’t be paid off/revoked. to clarify, they don’t pay for the lease - the solar company gets the roof and they get free electricity. This is in DC. |
Anonymous
As long as the solar company is well-respected/well-capitalized, sure. The big issue with a solar lease is that the company goes out of business and then it's a mess. |
Anonymous
Do you have a copy of the lease? How long is it for? I'd be surprised if it was longer than 15 years, maybe 20. |
Anonymous
20 years and they are two years in. It’s with Solar Solutions which seems to be very reputable. |
Anonymous
We have panels we own on our DC house, I know a bit about the business. Personally I would have no issues with it- but electricity savings of $2k/year seems pretty high, would need to be much bigger array than you see on a standard DC rowhouse. You might save $750/year with say a 20 panel array. Do they have docs to substantiate the electricity costs/savings? |
Anonymous
| Make the sellers pay it off with their profits |
Anonymous
| I’d have no problem with this. This is normal in DC. Solar Solutions is a reputable company; they have done about 1/2 to 3/4 of all solar panels in our DC neighborhood. |
Anonymous
| Oh and I do think $2000/year savings seems high but not crazy. Ask them to verify that number. Solar panels are great, and we’ve had no issues dealing with Solar Solutions, FWIW. |
Anonymous
| I don't understand-the SRECs are different from the energy your panels produce? So you basically get reduced electricity and nothing else? Who owns the panels? What happens if they are damaged or the lease ends? |
Anonymous
SRECs- yes the SRECs go to whoever owns the panels. In this case Solar Solutions paid for the installation and owns the panels, and signed a lease with the current homeowner to lease the roof space for the panels. They then get the SRECs- it's an investment, they probably get the original investment paid back within 6-7 years (including the federal 30% installation credit), and after that its how they earn % on the investment. SRECs have outsized value in DC because of how the local requirements work. The panels tie into the electrical box/system of the house and walk the electric meter back 1kWh for every kWh produced. In the spring they can sometimes out-produce the home electricity usage. That benefit accrues to the homeowner and it's the incentive that was used to sell the original lease. The panel owner has to repair the panels and pay for any roof repairs needed if the panels cause any damage. Normally after the lease ends the panels become part of the house property, but usually they have a 15-20 year life, so would probably be replaced at that point. The inverter would also probably be at end of life. The lease probably requires the panel owner to remove them at lease end if asked. |