It's everyone's dream to purchase a home that is within your ideal of perfection. Well, after a long hunt we found a home that had solar panels on it. We were over the moon. The home itself was in poor condition as the owners didn't take care of anything, including upkeep and servicing the furnace and a/c. It was a 3 bedroom, 2 bath, unfinished basement, .25 acre in backyard with a 2 car garage... 1871sgft. None of this is really important as we were more concerned and intrigued with the idea of having solar energy.
No where did it state anything regarding a lease and in fact we were told there was a 62.25 per month service fee that you pay to the solar company. We put an offer on the home for 185k before we even heard of this 62.25 per month "fee". It's been 2 weeks into the buying process and and I just received a call yesterday regarding switching the lease into our name? Now I am really confused.
After a long talk with Julie from Solar City it's been discovered that the panels on the home are under a 20 yr lease with 19 1/2 years left to go. What! We were crushed and I began my obsessive research regarding what this meant for us. Though Julie was kind and pleasant to talk with she basically talked in circles regarding what the lease meant. I asked fairly standard questions such as if the lease was paid off by the owners would they then become ours? Her main response was, "If it was paid off we would still service the panels for the next 20 yrs and it's a great deal if I owned my home I would get these put on for sure!" Okay...
Well you have to be careful as after a long day of research I discovered that when leasing solar equipment you do not qualify for any tax rebate whatsoever! There is no battery backup system so on a cloudy day you would literally pull from the grid. More research revealed that even if the lease was paid off and in 2 yrs or whatever, you decided you wanted to purchase the system it would be too costly and they do not use top of the line equipment. If you ask them to remove the system even with it being paid off, they charge you a cancellation fee.
So basically we've put a bid on a home that did not disclose the fact that the solar panels installed on their home was wrapped in a 20 yr lease. Had I just accepted that it was a 62.25 monthly "fee" to have these panels "serviced" I would have been pissed come the end of the year when we didn't qualify for the tax rebate. Be careful when purchasing a home and having a "lease" attached to the title. Technically they are not allowed to sell their home with a lease bound to the property so it looks like we're back at square one. What a hassle. Thank the lucky stars that this was revealed before we closed. Be safe everyone and be careful who you trust. If it sounds too good to be true it more than likely is.
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There is no service fee attached to the lease.....
ReplyDeleteYour ignorance about both solar and about homebuying is quite surprising.
ReplyDelete1) Almost all--99%--of residential solar units are connected to the grid and draw power from it when the sun isn't available. In addition, when the home produces electricity that isn't needed, it contributes this power to the grid. You bill from the electric company is based on the home's NET consumption.
2) The above is usually true even with systems that have battery backup, Solar homes that are completely off the grid are very, very rare.
3) Solar City is one of the leading companies. One of the ways that the they make things happen at such low prices is that they take the rebates and credits. They also depreciate the system, which a homeowner can't do. (That's why it's a lease rather than a sale).
4) Unlike the cheapskate owners who sold you your house, we prepaid the entire 20-year lease for our huge (7.5 kW) system. It cost us $14,000...but the cheapest we could have bought a system for was $36,000. We have electric heat in our house, so our bills were sky-high. Our system paid for itself in less than three years. Anybody who buys our house will inherit the lease...but all that means is that they will get free electricity until the lease runs its 20-year term.
5) Many kinds of lease arrangements that are bound to a house pass with the house when it is sold. That is standard. That's not a "scam" on Solar City's part. Not making it clear to you might be a scam on the part of the home sellers. Or perhaps they told you and you just didn't understand. We expect the prepaid solar lease on our home to be one of the major selling points if we ever sell it.
Sounds like Harriot didn't do her homework.
ReplyDeleteNo she didn't. i have a lease from Solar city we didn't pre pay the lease and are paying each month. Even leasing we did get a small tax break from both the federal and state.
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