I'm not defending it, I'm just explaining it so you understand how it works.
Making a lot of assumptions regarding the rate structure of your electricity provider is foolish. A lot can and will change over the course of the next 20 years.
Maybe you can explain this to me, but aren't you making the exact same bet ("assumption")?? I assume you paid $X to install your system, and got $Y back in subsidies and credits. So your net cost is $X-$Y. Call that $Z. I also assume you know (or can easily derive) with some pretty good accuracy how many total kWh your system will produce over 20 years (SolarCity does this for every contract). So just like I can, you can calculate your net cost per kWh. I know that my system will produce about 62,700kWh. At $0.066 that's a total cost of $4,138. So if you calculate your net cost per kWh, aren't you making the same bet against the grid costs that I am? Do you care to post your net per kWh cost over 20 years? If it's 4c/kWh, can't I say the same thing to you: "
Making a lot of assumptions regarding the rate structure of your electricity provider is foolish. A lot can and will change over the course of the next 20 years."?? What we are really talking about is how
we financed the investment.. but the bottom line is the actual investment in infrastructure is identical (albeit not the same size).
Meanwhile they're stuck with an antiquated system that they'll have to negotiate with SC to have upgraded.
Hmm.. again, aren't you also subject to this same restriction? You're also "stuck with an antiquated system" unless you want to invest 10s of thousands of more dollars (plus labor) to upgrade your own system? How is that any different? Will you be able to get the same subsidies and tax credits for upgrading your solar panels in 10 years (as opposed to a new installation)? A lot can and will change over the course of the next 10 years, those subsidies and credits may not be available. I know today how much my system costs, and how much energy it will produce. I really don't care if it's "antiquated" because upgrading down the road is only going to drive up the cost, unless the efficiency of the panels is increased several fold, and that's pretty unlikely.
It should also be mentioned that after that 20 year lease its either buy the system or they come and remove it from your house. Being that you're no longer a customer do you really believe they'll be extra careful to repair each and every hole left by the racking?
And here you're making a really wild assumption about how Solarcity will treat a 20-year long customer. Perhaps I'll be upgrading to a new system? And even if I don't, it's a pretty wild assumption to posit that SC is going to trash my house because they're removing an old system, especially after I've been a customer for 20 years and made them a pile of cash 20 years earlier due to the subsidies and tax credits they were able to enjoy. I guess the sky could also fall.
Systems rarely if EVER have a component failure as there are no moving parts and if those parts ever do fail it's typically in the first few years of operation. Manufacturer warranties from reputable companies would cover any costs associated with such failures. Our Panels carry a 25 year warranty for 80% output and the inverters follow suit.
So you're saying that these manufacturers will cover
all the materials and labor costs associated with replacing defective units? That's cool, because SC offers me the exact same deal -- they take care of everything in case of any failures. Again, I fail to see how that's any of a difference between buying or leasing a solar install.
Defend the purchase all you like. The bottom line is that anyone installing solar should always take the credits and buy the system outright with cash.
You can't make blanket statements like this. Everyone has a different set of objectives and financial goals. You can say "
in the long run, it's always cheaper to buy versus lease", but you can't say "
everyone should do X". I looked into buying a system outright, and it was a daunting exercise, with a huge upfront investment ($20k), and uncertainty in exactly what subsidies and credits I would get back and when -(months or years later). I would have had to research all the options and choices for equipment, hopefully find a reputable contractor, and manage the entire process, and deal with the state and town for permits, the power company for all the approvals,inspections, and system changes. Then applying for all the subsidies and credits. I'd also be on the hook when something breaks to arrange the work to remove/replace panels (even if reimbursed by the manufacturer) and deal with the hassle and costs of all of that. It's a lot of work, time, and effort to manage all of that, and I don't know about you, but my time is money. ... OR, I could just lease the system, and do nothing other than open the door for SC when they got here and let them do it all from initial inspections through to energizing the system (actually, I did have to "flip the switch"). Did that cost me some money compared to buying a system? Sure it did, I'm not fooling myself into thinking I "got a better deal". But what I did get was a completely turnkey system that I didn't have to do anything for other than sign a few documents and make a one-time payment.
PPA and lease companies are making money hand over fist with this business model. If it were so great for the consumer and such a bargain this would not be the case. They would need scale to turn even a small profit.
I can't follow your logic here. They're popular because they are good deals for both parties. They're entitled to make a profit (and they obviously are), and the customer gets a great deal on power for 20 years compared to the grid. It's a win-win. Is it as good as doing it yourself? No, I never said that, nor would I. But that doesn't make it a "bad deal"... for me, and thousands of other people, it's actually a better deal than buying because it's so freaking simple. And now I have solar power for 20 years well, well below grid rates.
And unless aliens come down and provide us with some magical new instant power generation technology, I seriously doubt that grid rates will ever drop below $0.066/kWh. And actually, my "non-generation" (delivery service) rate is currently $0.0674/kWh (+a $20 Service charge) BEFORE I pay for the grid power (currently about $0.09/kWh). So even if the generation power cost went to $0.00/kWh, I'd STILL be paying more than I'm paying for the solar power.
And in my particular case, I also qualified for the $1000 Tesla+Solarcity rebate, I pre-paid the SC fee in one payment instead of two ($50 discount) and I referred one friend who also installed a SC system ($250 referral credit). So taking all those into consideration, my total solar PPA cost was actually was $2,838, meaning my ACTUAL 20 year cost per kWh is
$0.04526. So yeah, I do think I got a pretty good deal in the end. I just like to use the $0.066 rate because that's what the regular SC deal is so it is consistent with other peoples' SC PPA analyses.
