[Strawbale] [off topic] Rent or Lease PV systems?

Mon Jan 15 08:29:08 CST 2007

Now, my math could be way off, but this is how I calculated using a large
system for someone with an electric bill of $200/month. [By the way, there
are no incentives in the program for anyone to reduce their consumption].

Let's say the system costs $17,500 installed after rebates and incentives,
and generates about 18,750 kwh/year, and electricity (PG&E) is at 12.8
cents, then over a 25 year lease, Citizenre will receive about $60K from
you, a 342% return over 25 years.  

Now, if you took out a mortgage for that $17,500, at 7%, and kept your
monthly costs the same (around $200) you could take out a ten year mortgage,
and you would pay interest over the ten years totaling $8205, so the total
cost of the system, plus financing, would be $25,705.  Then for 15 years,
you don't have any utility bills, so you pocket that $34K you would be
paying to Citizenre.  If you invest what you're saving each month, you pick
up another $20K. 

Plus, you pocket the difference in rate increases for going solar  Citizenre
calculates that savings at be $18K. Your net savings would be over $70K for
going solar, which should be a great incentive for anyone!  

As they say on their web site,
	…..no need to become a financial expert to justify your investment.

well, I'm no expert but…..I hope they don't mind if I peek behind the
curtain??

John "Got a Bridge to Sell You" Swearingen

John Swearingen
 SKILLFUL MEANS
design and construction
HYPERLINK "www.skillful-means.com"www.skillful-means.com

-----Original Message-----
From: strawbale-bounces at listserv.repp.org [HYPERLINK
"mailto:strawbale-bounces at listserv.repp.org"mailto:strawbale-bounces at listser
v.repp.org] On Behalf Of John
Sent: Sunday, January 14, 2007 10:16 PM
To: 'Chris Green'; Strawbale at listserv.repp.org
Subject: Re: [Strawbale] [off topic] Rent or Lease PV systems?

We are currently trying to find a lease or loan for a very large system for
a non-profit.  The numbers are very complicated, but I plugged in some of
the numbers to the Citizenre site.  The savings from Citizenre were
considerably lower, by a factor of ten, than our other projections even,
using a mortgage to pay for the system.  Again, I'm going to say that the
numbers are very complicated, so my quick comparison might be way off.

What I did notice is that they are basing the entire amount of savings on
the cost increase of electricity.  he rate you are starts at current rates
from your utility (no matter what they are--I checked for different
locations), and the rate charged to you stays the same--all savings come
from not having to pay rate increases. When we've done the numbers, however,
the cost/kwh (including financing) can begin at LESS than current rate, so
the profits are greater.

At the end of your lease, the system will probably have some life in it
still.  Generally the leasors will sell the system to you, but are required
to do so at "market rate. "  This essentially results in you paying twice
for the system:  first in our lease payments, and second to buy out what's
left in the value of the system.

Nevertheless, actual results may vary, and it deserves looking into.  Some
savings is better than none, some solar better than no solar, and so if
Citizenre is enbabling more people to invest in solar, that's great!

John "Leash to Own" Swearingen

John Swearingen
 SKILLFUL MEANS
design and construction
HYPERLINK "HYPERLINK
"www.skillful-means.com"www.skillful-means.com"www.skillful-means.com"www.sk
illful-means.com

-----Original Message-----
From: strawbale-bounces at listserv.repp.org [HYPERLINK "HYPERLINK
"mailto:strawbale-bounces at listserv.repp.org"mailto:strawbale-bounces at listser
"mailto:strawbale-bounces at listserv.repp.org"mailto:strawbale-bounces at listser
v.repp.org] On Behalf Of Chris Green
Sent: Sunday, January 14, 2007 6:44 PM
To: Strawbale at listserv.repp.org
Subject: Re: [Strawbale] Rent or Lease PV systems?

Mark Frazier wrote:
> I'm currently looking at 13K (after govt incentives) to put in 3KW of 
> panels (includes inverters, etc) in a grid intertie system.
It's the grid intertie which adds a bit, I'd think. And you will own the 
system, whereas Citizenre still owns the hardware when all is said and 
done.
>
> Of course, the skeptical side of me says that it must be better to 
> buy, or else they wouldn't be making money doing this.
I'm skeptical as well. The company estimates the system will produce a 
certain amount of power and it will cost perhaps $53/ month. They could 
be deliberately underestimating the average output in order to lull the 
potential consumer. What happens when you're actually cranking out twice 
as much? You pay twice as much.
The contract is a bit too open ended in this regard. A fixed monthly 
payment, while seeming to be higher, would be preferable and in the end 
you'd own the hardware. The company might turn around and charge a near 
new price if you choose to buy the system as "parts" after the rental 
period.

I didn't see any language giving the option to transfer the rental 
contract when you sell the house, but they do state they'll simply send 
out workers to remove the system, fix the roof, and install it in your 
new digs.
One benefit might be the on-going service you might get in the 
process...but that requires some hard number crunching by someone.

I'm thinking this may backfire if someone signs up for a contract for 
equipment which cost perhaps $8.50 per watt or whatever it is, and two 
years from now when the nanotechnology stuff begins to hit the market, 
the price drops to around $1.65 to $2 a watt. You'd be stuck with paying 
the higher costs for quite a while, maybe. Depending on the contract.

In the end  you're paying 8 3/4 cents per kwh for the total power 
produced, so maybe it does work out for some folks. Unless you're only 
using half the power it cranks out...
> I see it as more of an up front cash
> solution problem. Of course, isn't that what drives most rental and 
> mortgage industries?
Yup. Like the cell phone contract I had until recently...

Cheers,

Chris Green.

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