Bloomberg -- What Happened When I Bought a House With Solar Panels .................................
bloomberg.com
What Happened When I Bought a House With Solar Panels
Third-party ownership and decades-long contracts can create real headaches.
By Esmé E. Deprez
February 14, 2019
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choice bits :
Michael “Jug” Jogoleff, moved into the home’s 948 square feet ... His décor reflected his obsession with all things electronic, in particular ham radio. “Radios and computers were packed into every available square inch of space he could find,” and “his roof bristled with every form of antenna,”
the red pitched roof of the two-car garage was outfitted with 17 solar panels
I’d soon learn that the system was tied to the title of the house. It appeared that if we bought Jug’s place, we’d have to assume his lease arrangement with Sunrun.
Sunrun pitched Jug in part by telling him that SoCal Edison rates will rise by 4.75 percent annually. If that assumption held true for the next 20 years, having gone solar would have saved Jug at least $2,000.
If Southern California Edison's residential rates continue to rise annually by 2.2 percent, as they have on average over the last decade, Jug's total electricity outlay having gone solar would have cost about $6,000 more over 20 years.
I asked Sunrun if it would take back the system to put it on someone else’s house. It wouldn’t. The only way to get out from under the obligation, as far as we could tell, was to prepay the balance on the remaining 18-plus years’ worth of payments and buy the hardware outright. The price: $27,300.
A few months later, regulators would vote to make California the first U.S. state to require solar panels on almost all new homes starting in 2020
Eventually, Sunrun’s patience paid off. SolarCity nearly collapsed under massive debt before getting rescued by Tesla Inc. in 2016. SunEdison, Sungevity Inc., and others declared bankruptcy.
Sunrun finances its initial costs by taking on debt and raising capital from what are called tax equity investors. Only a few dozen companies have the appetite for tax credits and financial sophistication to be in this pool, including Google, JPMorgan Chase, and General Electric, says Joe Osha, an analyst who covers energy technology at JMP Securities LLC. They invest in Sunrun not to generate significant cash returns but to reap tax benefits
On consumer review sites and in local news reports, rueful customers warn others to stay away from TPO [third-party-owner ] solar offered by Sunrun and other companies. State attorneys general and politicians have fielded complaints from people who say they were sold expensive systems they can’t afford after signing contracts they didn’t understand; or are paying more now on their electricity bills, not less as promised; or are having trouble selling their homes because potential buyers are turned off, just as I was. (Customers of Sunrun and other companies must sign binding arbitration clauses, barring them from suing or joining in class actions.)
The company promises to produce these savings by offering initial rates that undercut the prevailing electricity costs in a given area and then increasing its rates more slowly than those for traditional electricity. This is premised on claims that traditional energy prices have “skyrocketed” in the past and predictions they’ll continue to. Sunrun works from the assumption that electricity costs will rise 3.76 percent annually. That’s more than double the average increase over the past decade nationally, according to U.S. Energy Information Administration figures. (Average consumption has also been falling, as household appliances have become more efficient.)
When I originally called Sunrun, I was told that Jug’s SoCal Edison bill in the year before he went solar averaged $115 a month. That turned out not to be true. His file, a second Sunrun rep told me, indicated that it averaged $79. Remember that his solar panels were designed to meet only 85 percent of his electricity needs, making his actual total monthly outlay in the first year with solar $87. That’s $8 more than he’d been paying. When I asked Sunrun about these new figures, Dempsey, the company spokeswoman, said Jug was “a happy and satisfied customer” who “valued the peace of mind” the system provided.
And let me tell you about our electricity bill. Had we assumed Jug’s lease, we’d be paying $79 a month to Sunrun (the second escalator would have kicked in) plus at least $10 to SoCal Edison to stay on the grid, minus $7.50 for net metering. We’ve been in the house 10 months, and our average SoCal Edison bill is $30. Compared with becoming Sunrun customers, we’re saving $50 a month.
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