HenryF, great discussions at that Solar Summit. Pretty much every issue we talk about here, but probably much more informed! I'm learning a lot sifting through them in my free time.
What I Learned About SolarCity's Business Model by Becoming a Customer (SCTY)
this article should fire up some own vs. lease/ppa, specifically Solarcity pre-paid ppa discussion. Also, the comments are pretty lively and informative as well.
This is just a marketing fluff piece that is most likely orchestrated and paid for by SolarCity. The author doesn't actually own any SCTY (even though he does have positions in TSLA). But more importantly if you actually read the article carefully, by paying attention to the choice of words, you will see that it appears that the author did not sign the PPA with SCTY and he did NOT put the SolarCity system on his roof.
Other notes:
The author uses ~30,000kWh of energy per year, but the SCTY system will only get him 8,000kWh. If you look at the pictures, you can see that the reason is that his semi-southern facing roof is constrained and that is the maximum amount of panels that they can fit (25x250W=6.25kW). In his situation, he needs to go with a SPWR system and can get ~9kW system using X-series panels; and even about 8.3kW using older E-series panels. And you will get more production per nameplate capacity from SPWR as well. Where cheaper Chinese panels might do 1.4kWh (for some hyptothetical geographic area) per year per stated Watt, a SPWR panel might do 1.5kWh per year per stated Watt. And that spread gets a lot wider with degradation over time.
I would not be surprised to find out that this guy actually went with a SPWR system himself, because it would make a lot more sense in his case. But, I digress...
He recommends the pre-paid lease, and coincidentally it is the option that benefits SolarCity the most financially since they don't have to raise more capital, debt, or sign loan agreements with banks.
He says that the pre-paid lease is more beneficial then buying, because HE IS ONLY COMPARING THE BUY PRICE THAT SCTY OFFERED HIM! This just proves my point that SCTY will price the buy price such that it is not the best option to buy and makes the leases/PPA's look more attractive. SCTY is offering him roughly $4/W, when a local installer can probably do the exact same system for about $2.70/W.
Some of his numbers don't add up either, e.g. he says that the buy price is $15k after $9k federal credit. But $9k out of $24k is 37.5% and not 30%. So I assume that he lives in an area that has a $2k rebate for such system and then he gets 30% on remainder or roughly $7k in tax credit.
Now lets do the math using a local installer at $2.70/W:
6.25kW*$2.70 = $16,875
Subtract $2k rebate (these are most always done using system size and not cost) = $14,875
Tax Credit = 30% * $14,875 = ~4,500
So you can buy the exact same system for $10k or you can sign a 20-year pre-paid lease for $10k; both upfront payments.
When you buy the system, you have a life expectancy of 30 - 35 years (quoting Lyndon rive here) or you can lease the system for the same price for only 20 years.
I think that it is a pretty easy decision...
Still not impressed with this blatant SolarCity marketing add by Motley Fool.
