Red-lining the solar purchase agreement

[cyr0nk0r]

Has anyone red lined (negotiated) their solar purchase agreement with Tesla? There are several terms in there that are very unfavorable to the customer. I am curious if anyone has red lined the contract and sent it back to Tesla and had them accept different terms?

For example. I have red lined the following and offered different terms.

Installation Timing
original terms: Approximate Start Date: 4-6 months from the date the Agreement is signed. Approximate Completion Date: from the day installation begins.

Proposed terms: PROVIDER agrees to complete installation on or before 12/1/2020. If PROVIDER has not completed installation on or before 12/1/2020 PROVIDER agrees to refund 4% of the total net cost.

This is an important term for me since the Federal ITC drops from 26% to 22% beginning 1/1/21. In Tesla does not install the system in a timely manner it is unlikely to get service activation before 1/1/21 thus potentially costing me 4% of the net cost of the system. While it would be unusual for an order in July 20 to stretch into an install after December of this year I feel it is a necessary protection for me.

System Price:
Original Taxes: $1,082.73
Proposed Taxes: $0.00

Arizona exempts sales tax for solar systems. A.R.S. § 42-5061, A.R.S. § 42-5063, A.R.S. § 42-5159
Has anyone from Arizona successfully removed taxes from their contract?

Privacy:
Original terms: The Tesla Customer Privacy Policy is part of this Agreement. You agree to be contacted at the phone number listed in the Price Sheet with more information or offers about Tesla products. You understand these calls or texts may use automated dialing or pre-recorded messages. This consent is not a condition of purchase. You may opt out of this consent at any time by contacting us at 888-765-2489

Proposed terms: Tesla agrees not to contact you with more information or offers about Tesla products. Tesla agrees to automatically opt you out on your behalf.

Tesla can just as easily NOT automatically opt me in to marketing and spam. The onerous shouldn't be on me to have to request to opt out.

Extra Work and Change Orders:
Subsection iii excerpt: Notwithstanding this provision, the Contractor shall have the right to substitute System equipment without Customer’s agreement, so long as that substitution adds no extra cost to the project and does not materially affect the System’s performance.

My proposed wording: Notwithstanding this provision, the Contractor shall only have the right to substitute System equipment with Customer’s agreement.

I feel like this line protects me from any bait and switch. No shenanigans can happen with GW2's turning into GW1's, panel swaps, etc., without my express agreement.

 

[TSLA Pilot]

Please let us know how this goes.

I concur with most of your concerns and would like to incorporate something similar, esp with regards to the equipment substitution clause.

 

[gpez]

This is one of the reasons I went with a local installer over Tesla. Tesla sent me a contract saying I'd have 10 days from signing to cancel and receive my deposit back in full but they refused to give me a Powerwall quote without a site visit. They couldn't promise the site visit and then subsequent Powerwall quote would happen within those 10 days. I asked to either have an estimate put in to the initial quote so that it if it changed the section on cancelling after 10 days would apply or to extend the 10 day cancellation. They said they could do neither and I got this verbatim from the Tesla salesperson I was working with: "we can’t update our contracts for one off things, everything goes through our legal team, for your protection."

For my protection LOL. That was a hard NO from me and was happy I went with the company I ended up going with.

 

[Uncle Paul]

Would be difficult for Tesla to negotiate a separate legal document with every individual customer, especially when they are so jammed with orders since their recent price cut.

Of course everyone wants to cut a better deal with their supplier, but perhaps Tesla would just rather deal with a more compliant buyer.

Imagine there are other smaller suppliers that might be more interested in your custom agreement.

Right now Tesla is super competitive with their standard offering.

 

[ucmndd]

Please do keep us updated but I suspect they'll tell you to pound sand. They aren't going to route consumer contracts to their legal team for review, and there's no way in hell any manager or supervisor is allowed to accept contract changes on their own. It's just not worth their time or effort for a single install.

 

[jjrandorin]

My guess is, by sending this in, you signal to tesla that they will not want to do business with you. I am not saying thats correct, I am saying thats my opinion of what they will think. Something to the effect of "this person thinks they are going to negotiate our contracts? Tell them "no we dont negotiate the contract, its standard" and hope you choose not to buy anyway.

You probably want a third party installer where you can somewhat negotiate what you want, because I dont think tesla will get anywhere near changing terms of contracts for a residential install. Now, if you were installing solar over a chain of 50 stores or something, might be different.

 

[SMAlset]

You do have the right in writing now I believe to cancel up to date of install. They do a lot of work on your behalf prior to install and you don’t pay any further money after your $100 deposit until the day they show up to begin work. Weather, covid, city or State changes could affect your install date beyond their control. If you haven’t paid anything up front prior to install (except deposit) why would any company pay you based on a contract price amount that you haven’t paid yet.

I know from reno work done on our home over the years contractors usually ask for a certain percentage of the contract in several installments some even before work is schedule to commence. Helps the contractor cover permits, design work, some materials requiring deposits on orders, etc. I’m guessing That because of their volume of orders, if you back out for whatever reason...maybe you lose your job, medical situation, etc...they can afford to essentially reallocate the panels and other equipment to another customer. Something I’m guessing smaller companies can’t do.

 

[wjgjr]

I can't really comment on your 3rd and 4th changes as I did not approach Tesla about them, though I will note they did supply the exact equipment (as far as I can tell) they indicated they would. On the 2nd item, I think it should be an easy fix if taxes are $0. They seem to be pretty good about correcting errors like that, assuming it is (as I don't know about AZ tax rules.) They at least should be able to explain why it is there.

On the 1st, this is the one real concern I had with Tesla. I signed 4 versions of contracts with them, including one that was actually after the install was done (just to correct a clerical error in a sub-total that both sides missed that didn't actually affect the overall numbers, which were correct.) On all of them, they had this verbiage (3-6 months, for me, except the last one - after install - was 2 weeks to 6 months.) I raised a concern in the 2nd and 3rd versions that it looked like they were resetting the clock, and they insisted they were not, but that they could not change the "boilerplate" language (which, based on the one change they made and the fact others have different ranges, indicates it is not.) For what it's worth, it did not seem to reset the clock or affect our schedule.

However, in your case, I completely understand the concern. I do believe that other customers who had planned 2019 installs pushed to 2020 were successful in getting the 4% difference back, so you might have luck talking to Tesla about it. That said, they may be unwilling to put it in the contract, but you might be able to get something in writing.

As others noted, it is very possible red-lining the contract will cause Tesla to walk away. An intermediate step might be to respond in the form of questions/concerns to see if Tesla will offer ways to address them.

 

[sleevemedia]

Now that they've laid off the sales force and they use software and a support team, they need to operate under consistent agreements to hit the profit margins that were in the math that led to the latest price cut. I sold a tech commodity on standard agreements and refused red lines, the margins are great when you don't need to get 10 people on a call to review the fifth round of counterproposals. It can be very profitable to say no, and it's a lot easier to make decisions when you don't have gigabytes of altered contracts that need to be reviewed every time you want to move where the market is going.

You are able to request that they completely remove the system and give you a full refund up to 7 days AFTER permission to operate. Do you think that if they cause you to miss the 26% credit, they would (a) come out and rip the system off your roof or (b) give you 4% back?

IMO, trying to negotiate only achieves delay that puts the date at more risk. All power to you and your mission, just stating my O.

If they offer other equipment, cancel, or for that matter, just threaten to cancel over it. To a degree, they'll walk, and to a degree, you have control over everything except that $100. However, it could be easily argued that by the time you walk, Tesla have earned that $100.

Not only are you likely to pay more than the 4% going to a local installer (at least that's what EnergySage's numbers showed for me), you're also not going to get the slush find Tesla uses to deal with the myriad expenses like permits and extra labor to do this or that or the other thing. They don't even itemize everything they use in the project. When you look at the breakdown, nearly half the cost goes towards everything other than the panels and inverters. Buried along with the labor cost is the nickel and dime that you'd otherwise pay to play.

They will take care of the tax. Florida's the same way. They can't charge sales tax and don't need to.

I'll call the opt out number for you. Jump in the pool, the water's fine.

 

[cyr0nk0r]

The general sentiment is 'don't try and make the contract difference, just get a rep to put something in writing'.
Sorry guys, that's not how it works. Just because a rep says something in an email does not mean Tesla is duty bound to honor it. It's all about the contract.

Contracts are legal protections for both sides. Stipulations that add protections for the buyer are pretty standard. Especially for purchases of this size. A T&C's for a broadband service at $100/month isn't worth the time. But you guys understand that you're entering into a potentially 20+ year relationship with a company and are about to spend $30k+, or in some cases with the sizes of systems I've seen in this forum... $50k+, $70k+.
I do not spend that kind of money without having some protections guaranteed to me. In the above example of Tesla installing every piece of equipment they said they would.. cool. But the contract said they don't HAVE to. The honor system and a contractual obligation are very different things.

Either way, All great replies. I will keep everyone updated.

 

[wjgjr]

The general sentiment is 'don't try and make the contract difference, just get a rep to put something in writing'.
Sorry guys, that's not how it works. Just because a rep says something in an email does not mean Tesla is duty bound to honor it. It's all about the contract.

Contracts are legal protections for both sides. Stipulations that add protections for the buyer are pretty standard. Especially for purchases of this size. A T&C's for a broadband service at $100/month isn't worth the time. But you guys understand that you're entering into a potentially 20+ year relationship with a company and are about to spend $30k+, or in some cases with the sizes of systems I've seen in this forum... $50k+, $70k+.
I do not spend that kind of money without having some protections guaranteed to me. In the above example of Tesla installing every piece of equipment they said they would.. cool. But the contract said they don't HAVE to. The honor system and a contractual obligation are very different things.

Either way, All great replies. I will keep everyone updated.

You are right, you are taking a risk by not getting some of these items stated explicitly in the contract. So far, it seems like the general consensus is Tesla has been pretty fair about handling the issues you have identified - and there are some provisions (as somebody else noted, the refund option) that can help. But, past performance definitely does not guarantee future success, so if it is a particular concern, then see what Tesla says, and it will be interesting to hear if you have any success. The only provision that would really concern me is the install date because of the potential ITC impact (and the taxes, but I am assuming Tesla will correct that.) I am wondering if Tesla will eventually come out with some guarantee/language as we get closer to the end of the year - they may not yet have thought about it.

 

[jjrandorin]

The general sentiment is 'don't try and make the contract difference, just get a rep to put something in writing'.
Sorry guys, that's not how it works. Just because a rep says something in an email does not mean Tesla is duty bound to honor it. It's all about the contract.

Contracts are legal protections for both sides. Stipulations that add protections for the buyer are pretty standard. Especially for purchases of this size. A T&C's for a broadband service at $100/month isn't worth the time. But you guys understand that you're entering into a potentially 20+ year relationship with a company and are about to spend $30k+, or in some cases with the sizes of systems I've seen in this forum... $50k+, $70k+.
I do not spend that kind of money without having some protections guaranteed to me. In the above example of Tesla installing every piece of equipment they said they would.. cool. But the contract said they don't HAVE to. The honor system and a contractual obligation are very different things.

Either way, All great replies. I will keep everyone updated.

I completely understand what you think, and dont disagree, but its still my position that tesla will tell you "thanks but no thanks" and recommend you take your business elsewhere to achieve what you want. I predict they will have "less than zero" interest in revising, reviewing etc any of their contract language that you want to revise. They will not want to open that flood gate, and your install, whether 30k or 100k is not likely "large enough" for them to engage their legal team.

So, you should be prepared to either move onto another vendor, or go with the contract they have. Again, I am not saying you are wrong for wanting changes, I just dont think there is any chance they will do it ( or even entertain doing it) for a residential install of "1 residence" where the contract is likely $150k or less.

 

[ucmndd]

I completely understand what you think, and dont disagree, but its still my position that tesla will tell you "thanks but no thanks" and recommend you take your business elsewhere to achieve what you want. I predict they will have "less than zero" interest in revising, reviewing etc any of their contract language that you want to revise. They will not want to open that flood gate, and your install, whether 30k or 100k is not likely "large enough" for them to engage their legal team.

So, you should be prepared to either move onto another vendor, or go with the contract they have. Again, I am not saying you are wrong for wanting changes, I just dont think there is any chance they will do it ( or even entertain doing it) for a residential install of "1 residence" where the contract is likely $150k or less.

Agree. It doesn’t matter if you’re plunking down $30k, $50k, $70k. The margins in this industry are razor thin and Tesla has very clearly signaled that their strategy to address that is to make things as streamlined and modular as possible. It’s not worth even an hour of one of their lawyers’ time to negotiate their standard contract for a single-install consumer. I would be completely shocked if they did it.

On the contrary, based on the way I’ve seen them treat “difficult” customers on the auto side, I agree with @jjrandorin it’s possible they’ll not only tell you they won’t negotiate the contract, but further state they’ll no longer do business with you at all as you’ve identified yourself as a “high risk” customer from their perspective.

 

[Bill_woolf]

They will take care of the tax. Florida's the same way. They can't charge sales tax and don't need to.

Just checked my contract... and yup, they charged me taxes - and I live in Florida. I signed the contract on July 6, so my 10 days ends tomorrow. I don't need another delay though....

 

[plunk99]

I also live in Florida and called an adviser about being charged sales tax. He said they should have sent me a sales tax exemption form, sent it to me and I signed it and they adjusted the price. No big deal. I think posting on a forum like this would weaken your argument that you want a guaranteed finish date when you're wasting days getting advice from others.

 

[ChrisABQ]

To simply answer the original question: Nope.

BTW: it worked out fine and happy with the deal and result.

Different priorities for different folks. Shop around and compare. All have pros and cons. None are perfect.

 

[sleevemedia]

I also live in Florida and called an adviser about being charged sales tax. He said they should have sent me a sales tax exemption form, sent it to me and I signed it and they adjusted the price. No big deal. I think posting on a forum like this would weaken your argument that you want a guaranteed finish date when you're wasting days getting advice from others.

I'm surprised they subjected you to a sales tax exemption form for Florida. That should only be for non-profits in states that permit sales tax on solar installs. Florida does not allow it and will not collect it from Tesla.

Solar is also exempt from increasing your property's assessed value, so when the permit closes, the county cannot bump you for the value of the install.