Solar electric lease firm Sungevity expands to Los Angeles DWP service area

Rooftop solar electric panels can be expensive, even after factoring in the 30% federal tax credit and utility rebates. For some prospective photovoltaic customers, leasing, rather than buying, may be a better option because it allows them to pay for solar power at a monthly rate that is similar to -- and often less than -- their usual electricity bill rather than pay for the entire system -- and two decades' worth of power -- upfront.

Sungevity, based in Oakland, is one of a growing number of residential solar providers that leases, rather than sells, rooftop solar -- with a key difference. The no-money-down system streamlines the design process by leveraging the Internet. Instead of coordinating site visits and in-person meetings with prospective installers, Sungevity employs Internet-derived aerial photographs of a home to calculate the pitch of the roof and its orientation to the sun to design a solar system virtually, rather than manually.

Using a customer's utility bills to determine a home's electricity use and the utility rebate it would receive by going solar, Sungevity then e-mails an installation proposal, or iQuote, within 24 hours of the customer's request.

"It's kind of akin to iTunes or Netflix with an electronic signature for the lease contract," said Sungevity president and founder Danny Kennedy, who has sold about 230 solar leases since March, mostly to Southern California Edison and San Diego Gas & Electric customers.

Today, Sungevity is expanding its lease program to customers in the L.A. Department of Water and Power service area. Financed by U.S. Bancorp, the leases last 20 years and would need to be taken over by the next homeowner if the house is sold before the lease has expired.

While Sungevity can sell, quote and design systems online, "the final mile of installation is done out there in the community," said Kennedy, who has partnered with about a dozen contractors and electricians who are experienced solar installers. 

Kennedy says 60% of California solar customers will immediately pay less for electricity with leased rooftop solar than they would without it and that by mid-lease all customers are paying less. Sungevity automatically increases the cost of its leases 2.5% per year, but Kennedy says most utilities are raising their rates 5% annually.

-- Susan Carpenter

Photo: Al Seib / Los Angeles Times

Comments

[Jim H]

David Hellman has no clue as to who he's talking about. I work locally for a Sungevity installer and believe me, we hardly get paid "peanuts." We're required to complete installations in a fast-paced and precise manner, are required to maintain a series of professional certifications and to be responsive to customer's demands in exchange. We treat the Sungevity customers just the same as we treat our own and whenever there's been an issue, we've responded, in conjunction with Sungevity, swiftly and immediately to take care of the problem, whatever the issue might be.

[David Hellman]

The Sungevity deal is not a deal. It is a scam. You just don't get ripped off till the company goes out of business and your forced to buy the system from whom ever is dealing with the bankruptcy. The install the cheapest product with local crews that they are paying peanuts. So, when your roof leaks, who takes care of the issue? The local crew? Sungevity? Why risk your roof to a company 400 mile away? My property value goes down with a lease. It goes up when I own the system and they are installing BP panels!

[Going Green]

Golly, Ron, you're reading very selectively! From the start I said that I PREPAID my solar lease. Right after the part you quoted, is the part that says: "At the end of the 20-year lease, Sungevity will remove the panels or offer the then homeowner the latest available system." So I do understand how a lease works.

As for using the premixed spray and hose, that works well enough for 90-degree vertical 2nd-story windows but not in my case: sloping roof/panels, extra tall building, sometimes anemic water pressure. To see where I'm aiming the water, I would have to stand in the middle of the street.

In any case, thanks for sharing the info about PACE. It's good to know other options and will be valuable for those who can go that route. More power to you (pardon the pun) that you are able to reap the benefits of that option.

You should be aware that, according to the californiafirst.org site/link you listed: "The CaliforniaFIRST Program is scheduled to roll out as a pilot in a limited number of counties and cities beginning in Fall 2010. Counties and cities are currently approving resolutions to join the Program. Check to see if your city or county is participating.

The CaliforniaFIRST Program will be established on the county level, based upon program approval from the county and city local governments. Applications are not currently being accepted."

I checked -- Los Angeles is NOT among the counties and cities taking part in the pilot program. I will be enjoying solar power this Summer, long before the program even begins in the selected cities.

As my 20-year lease is already paid in full, I have the option, when and if PACE is available in Los Angeles (who knows when that will be or whether it would work out in my circumstances), to have Sungevity remove the panels. As the panels were leased, not purchased, I would probably still be able to buy a new solar panel system and earn all the tax credits, rebates, etc.

[Ron]

Sorry Going Green, I didn't mean to offend you but after reading your last post,I really don't think you understand how a solar lease works. You stated: "The system is COMPLETELY paid for, so if I do sell my house, the buyer will be getting the solar panels for free." Even after you've made 20 years worth of lease payments, you won't own anything. So you or any potential home buyer won't be getting anything for free. If you or your home buyer wants to own the system, then you will have to buy it from the leasing company, even after making 20 years worth of payments. Nothing with a solar lease is for free. And you're wrong about me being able to afford the cash outlay which is why I'm going with the PACE financing program. I don't have to put out any cash, and when I'm done making my payments, I will own the system. After you're done making your 20 years worth of payments that increase every year, you won't own anything. It's that simple. The leasing company will come and take away the solar system that you've been making 20 years worth of payments on. And insofar as cleaning the bird droppings off your two story house is concerened, piece of cake, all you need is one of those premixed sprayers that you can buy at any hardware that are designed for cleaning second or even third story windows. And for the the rest of the maintenance, there is no other maintenance. That's just a myth that was started by the leasing companies to scare buyers into signing a lease contract. And I say again, what home buyer is going to want to assume your lease payments on a system that they will not own in the end for a savings on their electric bill of only a few dollars a month. So good luck selling your home down the road. Insofar as the "brow beating" is concerned, this is America and truthful information should always be allowed to disseminate to the people no matter what you what you want to call it. People will make there own decisions. If you want to learn more about the not for profit, government sponsored PACE programs that will be available all over the state of California this Summer, visit californiafirst.org. There are about a hundred or so communities that will be participating in the no money down PACE financing program this summer.

[Going Green]

You're wrong, Ron. I don't work for Sungevity. After the rebate and bonus, my $2735 prepaid cost will be $1235. Spread over 20 years, that's about $5 a month for the electricity. The system is COMPLETELY paid for, so if I do sell my house, the buyer will be getting the solar panels for free. At the end of the 20-year lease, Sungevity will remove the panels or offer the then homeowner the latest available system.

Unlike you, I can't afford the huge outlay to buy the solar panel system. Also, mine is a two-story house and I wouldn't be able -- nor would I want -- to clean (many birds in my area) or maintain the panels.

Why can't you accept that what works for you may not work for others? I'm just sharing my own experience. Your language ("Only a fool would...") and tone is hostile. Stop your browbeating!

[Ron]

Sounds like Poster "Going Green" works for Sungevity. Your 12 cent per kilowatt hour electric bill may drop to 4 cents like you claim but you conveniently failed to mention the amount of your lease payment. Once you factor in the huge monthly lease payment, you'de be lucky to save a penny or two at the most per kilowatt hour on your electric bill, which is something that any homeowner can easily accomplish by simply changing out their incandscent lighting for energy efficient lighting, without signing a 20 year lease. Oh and in reference to your comment concerning outdated equipment in 10 years, you're absolutely right, who in their right mind will want to buy your home and get stuck with another ten years of lease payments on your outdated leased solar equipment. My neighbor bought his system 6 years ago and says that there is no maintenance other than an occasion rinsing off with a garden hose and their's been no repairs either. And he monitors his system's performance on his included remote desktop display. And the best part is that his system is almost paid off. He said that all of the mountains of paperwork that you claim was all taken care of by his solar dealer. I've done the math and the bottom line is this: While you're getting a promotional rebate of $500 to $1,500, I will be receiving a $13,776 cash rebate. While you're getting NO federal tax credit, I'll be recieving a 30% federal tax credit which amounts to roughly $15,693.00.
While you'll be getting NO REC credits, I will be receiving payments for my REC credits. And here's the clincher, because of all of the financial incentives that are available when you buy instad of lease, I'll have my system paid off in approximately 6.2 years and you'll be stuck making lease payments on equipment that you won't even own in the end for an additional 13.8 years. No matter how you crunch the numbers, a solar lease, makes absolutely no financial sense. If anyone is concidering a solar lease instead of a purchase, don't take my word for it. Do yourself a favor and learn the truth by talking to an accountant instead of a salesperson before you sign your roof away for the next 10 to 20 years.

[Going Green]

I signed up for a Sungevity solar panel lease today. Crunching the numbers, it was an outstanding deal. The prepaid cost for the 20-year lease is $2735. Promotional rebate/bonus will return $500-$1500 to me. The solar energy will cost me 4 cents per KWH vs. the 12 cents per KWH that I currently pay. The lease has performance guarantees. I will not have to worry about monitoring the system, maintenance or repair. At the end of the lease, technology would surely have improved a lot and I will not be stuck with outdated equipment.

Randy and others who are serious, check LA craigslist for referral bonus details.

Different strokes for different folks. I'm averse to spending $10,000-$20,000 to buy a solar panel system, deal with the mountain of paperwork to get the energy credits and rebates, worry about maintaining the system and end up with outdated equipment in as little as 10 years.

[Going Green]

I signed up for a Sungevity solar panel lease today. Crunching the numbers, it was an outstanding deal. The prepaid cost for the 20-year lease is $2735. Promotional rebate/bonus will return $500-$1500 to me. The solar energy will cost me 4 cents per KWH vs. the 12 cents per KWH that I currently pay. The lease has performance guarantees. I will not have to worry about monitoring the system, maintenance or repair. At the end of the lease, technology would surely have improved a lot and I will not be stuck with outdated equipment.

Randy and others who are serious, check LA craigslist for referral bonus details.

Different strokes for different folks. I'm averse to spending $10,000-$20,000 to buy a solar panel system, deal with the mountain of paperwork to get the energy credits and rebates, worry about maintaining the system and end up with outdated equipment in as little as 10 years.

[Rany]

To Jason: I'd rather have a lien on my property that automatically passes to a new home buyer than have a lean against me personally for signing a lease that has a stiff penalty if I decide to walk away. With a solar lease, you're only saving 5 to maybe 10% if you're lucky on your electric bill with a solar lease, so if you can't afford to buy a system then why not take advantage of all the free energy efficiency money that available that could easily save you a whole lot more than 5 to 10% and not lock yourself into a legally binding lease. Plus I'd rather pay 7% interest on a PACE loan and own the system in the end than make 10 to 20 years worth of lease payment and own nothing in the end. A solar lease is nothing but a scam that was developed by investors that want to take advantage of all the financial incentives that should be going to the homeowner. In the current economic state that the country is in, investors wouldn't be dumping so much money into solar leasing companies unless there was a whole lot of safe, secure money to be made. Sure a solar lease might save you thousands of dollars over 10 to 15, but if you owned that same system you'd be saving tens of thousands of dollars over the same period of time.

[Randy]

I think we're going to sign with Sungevity. We have a house in a fairly coastal part of San Diego. We don't use much electricity (rarely use A/C) so the savings aren't much, but we'll be protected from rate increases and we'll reduce our carbon footprint. It's cheaper and less hassle than financing the system ourselves, plus they repair it if it breaks. Sadly, when sales tax is added to the lease payment, we'll end up paying an extra $6 or so per month. If there was a program to finance it through property tax payments over 20 years, it would be worth considering, but I don't believe there is in San Diego.

[Jason V]

Only a fool would stay on the utility when they can switch to lower cost solar for no upfront cost.

For those that don't have $20-50K and don't want the city/county to put a lien on their property and charge them 7% interest on a PACE program, $0 lease can save them $1000s on their energy bills with no lien, high interest rates, or upfront capital. Seems like a reasonable proposition to me.

[stromverbrauch]

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Electricity users and providers about the Electricity consumption.If you more information about
the stromverbrauch.

[save the deserts]

I agree with Ron.

If our AB811 loans were actually FUNDED, net metering were expanded and we were paid FAIRLY for power we produce and do not use, ALL of us could afford to install rooftop solar in this baking, sprawling metropolis for FREE. There is literally NO reason for a third party to skim money in between ratepayers and the utilities and NO reason for ratepayers to be forced to pay for remote "Big Solar" "Big Winde" and "Big Transmission" boondoggles which pay a fixed 15% profit to the utility, even though they are not needed.

And why doesn't rooftop solar count towards the 33% RPS??? Because if it did, Big Energy would never be allowed to slaughter millions of acres of wilderness for (cough) "clean energy" industrialization.

It is so glaringly obvious that we need to implement hundreds of thousands of efficiency upgrades and rooftop solar systems IMMEDIATELY at no risk to ratepayers OR THE CITIES AND COUNTIES OF CA, and get us on track to energy independence - cheaply, quickly and cleanly. We will see improved property values, much lower electricity consumption, reduced grid congestion, improved air quality, civic pride and excellent LOCAL jobs if we can only get our government to do what we demand!!!

It's very simple - fund AB811 loans at a very high level (zero cost), broaden net metering and include 100% of power produced at point of use in the RPS, and pay a generous (50 cent) feed in tariff for power we produce and do not use (again, basically FREE to other ratepayers but provides small ROI to ratepayer generators). No dead wilderness, no depleted water, no Big Energy ripoffs, and DECREASED, not increased GHG emissions. Sorry, Big Energy, your century is over. It's our turn now.

[Ron]

Only a fool would lease a solar system. First of all the homeowner doesn't get the cash rebate from the utility, nor does he or she get the 30% federal tax credit, nor any renewable energy credits. And after making 20 years of lease payments you won't even own the system because it always belongs to the leasing company. All of the lucrative financial incentives go to the leasing company, leaving the homeowner with a miniscule savings on his or her electric bill. You could easily save as much as going on a solar lease by simply changing out your incandescent light bulbs for energy efficient ones without locking yourself into a 20 year lease. Remember once you sign their legally binding lease, there's no changing your mind and there will be a stiff financial penalty for breaking the lease agreement, so if a want to sell your home and the potential home buyer can't qualify for the lease or doesen't want the used, older model solar panels that are on your roof, then you have to pay the penalty. On a $250.00 electric bill, you will only save $12.00 to maybe $20.00 per month on your electric bill after making the lease payment. A much better financial solution are the new PACE (Property Assessed Clean Energy) programs that are being adopted by cities and counties all across the state. There is typically no money down, you don't have to have great credit nor a lot of equity and the loan is repaid through your property tax bill. So if you ever decide to sell your home, there are no penalties and the homebuyer automatically qualifies for the financing. And the great thing is you not only get to keep all of the financial incentives, but you own the system after completing the payments. Again with a solar lease, after making 20 years worth of payment, you'll own nothing. Before considering a solar lease, ask yourself this question: If a stranger approched you asked you to rent your home's roof to him for 20 years so he could mount a piece of equipment that will make him, not you, a ton of money for a rent payment of only $12.00 to $20.00 a month would you do it ?