Solar City MyPower Plan

[smilepak]

Hi,

Anyone here purchased their solar panel through Solar City. I am curious about how the payment is calculated out.

Based upon my usage, they determined that my current average utility cost to SCE is $117.00 per month. They will sell me solar panel through their MyPower purchase plan estimating at $99 per month based upon the calculation of 0.161 cents per KW produced by the panel.

What I don't get is the whole balloon payment of 30% required to be paid on June 1st to buy down my rate. If by June 1st next year I pay 30% balloon payment, the calculation will drop down to $74.00 per month based upon the calculation of 0.11 cents per KW.

All of this is over a 30 years payment option.

The representative mention about the 30% being optional. But on Solar City website it is said required. I am confused about this 30%. I decided NOT to pay that 30% balloon payment, then I am stuck paying that $99 per month. But all of this is based upon the assumption the panel produces enough electricity to cover that cost? What if during the winter season it produces less, does that mean I have to pay more towards the payment?


========== EDIT =========

* Total System Cost is approx $22,976
* My current rate with So Cal Edison is based upon a time of use system. Peak hours 0.31 / KW, Off Peak 0.18 /KW, and Super Off Peak is 0.11 / KW.
* Solar City quoted me 0.161 /kw before discount (30% balloon payment). If I use the federal tax credit to reduce my loan amount, then it is 0.11 /kw after discount.

I am still unclear in California is it required that I used that federal tax credit to reduce the loan amount and what is the penalty for not doing so. 30% tax credit is a total different $$ amount to 30% balloon payment to pay down the loan amount.

My questions are:
1) Is that rate they quoted a fixed rate for the duration of the contract?
2) The rate is based upon assumption of the power produced by the panel. In the winter months where I am producing less power, what does that mean? Or they have already factor that in to the price quoted?
3) Anything I should Look for? or missed? What should I look for when purchasing through Solar City?

 

[smilepak]

FYI...

One site I came across said something to this affect

solarcity spec and cost : solar

Do not sign up for MyPower! Read the contract, it is a really complicated loan product. It's essentially a PPA with an extra 10 years tacked on. It's a 4.99% interest rate with a 2.9% annual escalator built in. It is extremely front end interest loaded so after the first 10 years you've paid about about 80% of your payments strictly in interest and have almost no equity built into your system if you want to pay your 30-year loan off early. You are also required to pay your entire 30% tax credit to solar city by June or else there is a massive balloon payment. Also your MyPower loan doesn't automatically reamortize, you have to make a payment of $1,000+ then write them a letter to specifically request one. You're going to pay over 2x the amount you should reasonably pay for the same system over the next 30 years. If you're in northern CA look into a PACE program like HERO and it will not only be cheaper and easier, but you can write off all the interest. Also they don't take much maintenance, just a new inverter every 13ish years. If you're really worried about warranties, just put a SolarEdge inverter on and then pay the extra $300 for the 20-year parts and labor warranty. Source: I have spent the last 2 days going line by line through Solar City's MYPower contract.

 

[Raven]

I have the MyPower plan. I was at the contract signing stage when it came out so I was one of the early adopters of the program. I'll gladly fill you in because some things were a surprise(not explained well):

First, the rate reductions (balloon) payment. This is intended to be the money you get from your federal tax return, thus the 30% because that's what the Feds allow as credit. The problem is, what if your tax liability isn't such that you are allowed the full 30% in the first year(you can roll the balance)? Well, they still want 30% and if you don't give it all by June 1, you are assessed an annual $49 fee until you pay all 30%. MINIMUM balloon payment is $2000, every year(+$49) until you reach the 30%. Each balloon payment reduces the per-kWh charge. Mine started at $.12/kWh. Had I made the full 30% payment, I'd be paying 9.5 cents/kWh. If I make more large payments, the rate reduces further. So no, it's not a fixed rate throughout. It gets smaller.

Billing: varies each month based on production. If your system produced 1000kwh for August, you take 1000kwh times your current kWh rate. So if your rate is $.12/kWh you'll be paying $120 that month. Now let's say September your panels produced 900 kWh. September's payment is $108. Your system is monitored closely for proper operation and production totals.

A pleasant surprise...I was quoted a 65-70% energy usage offset. I am actually producing nearly 150%. My rep wasn't kidding when he said they sandbag their numbers. If the panels don't produce their guarantee over 20 years, they pay you the difference. That's my understanding. So I just wish my utility paid more than $.03/kWh for excess. Saying THAT, my utility doesn't PAY me, it's a statement credit. I will never see a check, I will just never have a bill.

Disclaimer: This is how MY contract works. Read your contract closely as they may have changed the rules since last December. I assume it would be the same though but READ THE CONTRACT.

 

[Ampster]

If you have access to cash for less than 5 or 6% you are probably better off buying your system. If you plan on selling your home in the next 30 years you are probably better off buying your system.

 

[cpa]

SmilePak,

Check into the HERO program. They are based in Riverside, just a stone's throw from your home. There are a few administrative hurdles to conquer, but if I recall correctly, they are minor. The beauty of the plan is that you can get solar installed on your home for virtually nothing down. You finance the purchase through your secured property tax bill whereby you are charged 2% interest. You simply pay with your December and April installments when you send in your tax payments. You can prepay at any time without penalty. The lien that added to your taxes is transferable to the new owner when you sell, or you just pay it off in escrow.

HERO Financing - Home Energy Solutions | HERO Program

I really think this is a great deal for homeowners and small businesses in the locations where it is offered!

 

[smilepak]

I have the MyPower plan. I was at the contract signing stage when it came out so I was one of the early adopters of the program. I'll gladly fill you in because some things were a surprise(not explained well):

First, the rate reductions (balloon) payment. This is intended to be the money you get from your federal tax return, thus the 30% because that's what the Feds allow as credit. The problem is, what if your tax liability isn't such that you are allowed the full 30% in the first year(you can roll the balance)? Well, they still want 30% and if you don't give it all by June 1, you are assessed an annual $49 fee until you pay all 30%. MINIMUM balloon payment is $2000, every year(+$49) until you reach the 30%. Each balloon payment reduces the per-kWh charge. Mine started at $.12/kWh. Had I made the full 30% payment, I'd be paying 9.5 cents/kWh. If I make more large payments, the rate reduces further. So no, it's not a fixed rate throughout. It gets smaller.

Billing: varies each month based on production. If your system produced 1000kwh for August, you take 1000kwh times your current kWh rate. So if your rate is $.12/kWh you'll be paying $120 that month. Now let's say September your panels produced 900 kWh. September's payment is $108. Your system is monitored closely for proper operation and production totals.

A pleasant surprise...I was quoted a 65-70% energy usage offset. I am actually producing nearly 150%. My rep wasn't kidding when he said they sandbag their numbers. If the panels don't produce their guarantee over 20 years, they pay you the difference. That's my understanding. So I just wish my utility paid more than $.03/kWh for excess. Saying THAT, my utility doesn't PAY me, it's a statement credit. I will never see a check, I will just never have a bill.

Disclaimer: This is how MY contract works. Read your contract closely as they may have changed the rules since last December. I assume it would be the same though but READ THE CONTRACT.

That is helpful information. A few questions

1. If the panel produces 1000 kW and I only uses 700 kW, I still pay solar city based upon 1000 kw?

2. They said something to the effect the solar you makes go towards paying for your panel. So if on average I produce more than they estimated, that mean I pay it off faster?

3. It's a 30 years contract loan. But if I pay off in 10 years, I'm still bound by the 30 years contract? So do I technically own the panel at 10 years I paid off or 30 years after contract expires?

4. I read somewhere on annual rate increase of 2.4%? Is there a rate increase?

5. The past 12 months our bill didn't include the Tesla and future potential of another EV, what if we end up using more than we produce due to additional EV, what is the options on adding panels?

 

[Raven]

That is helpful information. A few questions

1. If the panel produces 1000 kW and I only uses 700 kW, I still pay solar city based upon 1000 kw?
A. Yes, you pay 1000kwh to SolarCity and your utility will show you having 300kwh credit. You pay SolarCity only what your panels produce.

2. They said something to the effect the solar you makes go towards paying for your panel. So if on average I produce more than they estimated, that mean I pay it off faster?
A. Yes. That's what they told me.

3. It's a 30 years contract loan. But if I pay off in 10 years, I'm still bound by the 30 years contract? So do I technically own the panel at 10 years I paid off or 30 years after contract expires?
A. That one I don't feel confident in giving an accurate answer.

4. I read somewhere on annual rate increase of 2.4%? Is there a rate increase?
A. I only saw that in the Lease program, not MyPower.

5. The past 12 months our bill didn't include the Tesla and future potential of another EV, what if we end up using more than we produce due to additional EV, what is the options on adding panels?
A. I'm sure they will but of course it would require a new contract and probably a lot more money. Panel work, additional inverters, etc. Also, the initial panels will be in the most productive regions on your roof to maximize effectiveness. Any additional panels will likely be in less desirable spots, this possibly requiring more panels to get the additional number of kWh you require. Adding panels comes down to what your goals are. Is it about being green or saving money? While I like producing 50% more than I use, the cost benefit virtually evaporates after 100% offset. I'm credited one for one on kWh, but at the end of the year, if I have an excess of credits, I'm "paid" at a rate of $.03/kWh. Basically it will cover the meter fees and "profit loss" fees my utility charges. So while 2/3 of my panels offset the roughly $400/month to the utility, 1/3 only offsets $360/YEAR in fees! I don't know how CA utilities handle solar production credits.

I have a 16.25kW system.

see answers above

 

[smilepak]

Nice thx for the info. I think they quoted me 17 panel in the initial consultation.