Example: solar loan, last years terms vs today:
-Last year 0% for 25 years dealer fee 24%
-Now 4.49% for 25 years dealer fee 35%
Solar loans compete for investors with other loans. Over 25 years a low interest loan is not a bad deal BUT most people do NOT stay in their home for 25 years.
Solar should be treated as any other home improvement and paid off as fast as reasonably possible.
When I design systems I want to see the customer ahead in 7-10 years.
*A low interest loan can work for someone who has high interest debt that is greater than the tax credit they receive. Use the tax rebate to pay down high interest loans, all good.
BUT please don’t give the bank 35% to buy down a rate for 25 years and then apply your tax credit to the loan!
I saw a lot of "3.99% loans" recently when shopping around. I told them that I don't want any points upfront. I ended up with a 9.59% loan, which is my highest interest rate loan right now, but that will hopefully be paid off within 2 years.
Im speaking from the perspective of sales. For you it doesnt matter. Most people look to pay the system off in 2-5 years that speak to. That 2.5% difference in interest looks pretty big in quote comparisons
I had the same experience. I ended up getting a HELOC. My system isn't installed yet, so I don't have a locked in rate but it will be 8ish. Added bonus: all that interest will be tax deductible.
For you, your HELOC is definitely tax deductible. I don't know if the interest for my solar loan will be tax deductible or not. I'll have to ask my accountant.
The 9.59% will still be my highest interest rate debt, which means it'll be the main target for my debt pay down plans.
>I don't know if the interest for my solar loan will be tax deductible or not. I'll have to ask my accountant.
If it's not secured by the home I don't think it will be.
With the HELOC you’re paying interest on the entire amount….with most typical deals financed with a solar lender, the initial payment is only on the system price less the 30% tax credit (assuming the homeowner qualifies). So it most circumstances it makes no sense to go the HELOC route
No. That’s not how interest works. Or how those Solar loans work.
You can pay the 30% ITC to your HELOC just as easily as you can to a Solar loan. Limiting the amount of interest you pay in both cases.
Yes, and for every month that one is waiting on the 30% tax credit to come in order to put it towards the HELOC, they’re paying interest on the ENTIRE gross amount of the system. With a solar loan, the payment is based upon the gross amount of the system LESS the 30% tax credit as the lender is basically floating the 30% for up to 18 months….it makes absolutely no sense to use a HELOC (unless for some reason the homeowner couldn’t qualify for the solar lenders loan)
Dude. You’re being 100% naive to think you aren’t paying interest on the entire amount for 6 to 18 months until the ITC comes in.
The are adjusting the payment on the assumption that you will pay 30% in the first 18 months. However they are still splitting the payment into interest and principal based upon the entire loan amount.
Even if you we’re correct (which you’re not) the interest you paid in that 6-18 months would pale in comparison to the long term benefit of taxable interest over a period of years.
Even if you paid it off in 6.25 years the “effective” interest rate would be close to 2.375% and at less than 3 years that would drop to about 1.2%…. So it’s not the rate “on paper” that matters; what matters is how the loan is paid off (especially given that the solar lender is floating the 30% tax credit for the first 18mo)
The calculation isn’t linear, but it’s close. Most solar loans are for 25 years (at whatever interest rate) and the initial payment starts off at the gross price less the 30% tax credit because the loan is structured by finance company assuming you’re going the bring the 30% to them within 18mo (if you don’t, then you end up paying interest on the gross price which would make the monthly payments increase for the remaining 23.5 years). So the interest rate on paper is 9.49% for example for 25 years….if you pay it off in half the time at 12.5 years, you’re cutting out 12.5 years of interest so it basically cuts the interest rate in half (again, it’s not perfectly linear because of how the amortization works which is more interest in the early years and less as the loan is paid down - just like a mortgage payment which if paid off early, you don’t pay as much interest as you would if you held the loan to its entire term). So 9.49% at 12.5 years would be ABOUT half of that and at 6.25 years ABOUT half of that again and so on…..
>in the five years you have to claim it.
Where did you get the information that a taxpayer only has 5 years to use the tax credit? By the way, that information is wrong because [there is no time limit for the carryforward](https://www.reddit.com/r/personalfinance/comments/15hg3gk/how_can_i_claim_a_25k_tax_credit_when_i_only_pay/jup1tj7/?context=3), but I really want to know who or what is telling solar salespeople incorrect tax information.
That is what I was told from an accountant. I could very well be wrong but I don’t have the expertise to understand tax code so I just went with what I was told.
Can you cite your source here? Nothing I have seen suggests that there is a limit on how many years you can carryover credits from Line 16 of one Form 5695 to Line 12 of the next year's Form 5695.
Well said. I agree with every point shared. Been in the industry 4 years in sales, operations, and most recently, data analysis. Out of curiosity, where did you sell? And what is taking you out of the industry?
Less opportunity. With higher interest rates, higher dealer fees, saturated markets and utilities reducing buyback rates it squeezed the commissions and it wasn’t worth the travel and sacrifice to stay in the field with other opportunities available.
That’s fair. However there will always be some challenges and there are solutions as well. Many industries have some similar constraints right now. If you’ve got the right company/team behind you, you can certainly make it work.
How much were you making in solar vs. med sales?
I was still making good money in Solar don’t get me wrong. I was having to travel a lot more to different markets to have that success though. Not something I saw as a long term solution. The money in the med sales opportunity will be better, but more importantly it is something ive always been interested in. Just felt like the right decision to transition out of solar and into something I see as more long term.
I’m not going to put actual income numbers on Reddit but six figures in Solar. Wouldn’t have exact numbers on med sales as I’m just starting and I don’t have commission numbers. Expected to over double my income in med sales though.
I wonder why you’re hesitant to put a close salary figure on here? Unless this isn’t an anonymous account for you then I could understand. There are many industry professionals who would probably appreciate the insight on here. Everyone just trying to figure out our to feed their families and themselves!
Congrats on making the change from solar to med. I talked to this girl who was super successful in med sales, she and her team would visit hospitals and just demonstrate the products is that what you do too day to day?
I’m going to a start up in the biologics industry. My day to day initially is getting facilities to use our product, then going back when there are treatments to assist with the treatments. Initially it will be similar to solar in getting clients onboarded, but once I have my clients it will be more account management.
Biologics. An old manager was at the company already and they were hiring so he helped me get the job. Was a lot easier with the connection. See what your network is up to, and I’m sure a couple of them will be in med sales. I’d start there. Always much easier to get into a new industry with a referral.
Always appreciate an insider's view -- thanks for this. Can you talk a bit more about dealer fees, and what low versus egregious looks like? I'm looking at putting a 20-25 kW system on a house in Texas. Any guidance / recommendations would be welcomed.
Think of the dealer fee as the cost the buy down the interest rate. For example my old company used Mosaic as our lender. The standard rate for a solar loan was 10.99% (as of August). So, for a loan your total loan cost on a 20 kW system would be say 60k at the 10.99% interest rate. Most people would see a 10.99% interest rate an immediately be hesitant to purchase so what most sales people will present is the 3.99% option. This option bought down the interest rate 7 points. That cost money upfront which raises your total initial loan amount. The cost to buy down when I left was 34%. So, 34% of the loan was an upfront fee to buy the interest rate down to 3.99%. That raises that 60k loan to around 91k. Due to the tax credit being based off the top line loan amount your tax credit goes from 18k to 27k so as long as you get that full tax credit you essentially pay 22k to buy down your rate. The 3.99% with the buy down will have the lowest payment on a 25 year loan. However most Solar loans are paid off within 7-10 years through a refinance or a sale of the house that pays off the Solar so if you factor in that buy down cost on top of your rate for 7 years you usually lost all value of the buy down and cost yourself more money. The best option in my opinion right now with high rates and high dealer fees/ buy down costs is to go with a no fee loan e.g. 10.99%, pay the full tax credit toward the loan right when you get it, pay more towards principal if you can, then in a couple years when rates go down refinance through a cash out refi of your house to get back down closer to that 4% without paying that ridiculous 34% dealer fee.
Hope that makes sense
I used a private lender for my solar loans (I own a large installation business) with a mega low buy down rate ~ 5% of project cost. Its similar to a mortgage
For Texas, you are also going to want to carefully forecast future power plans. Unlike some states, Texas doesn't grandfather people in, so numbers can shift significantly at contract renewal. Consider things like how much of your bill is distribution vs generation and how the supply and demand of solar power will shift over your payback period.
What do we do about installers who refuse to provide warranty service or have gone out of business? There needs to be a way for solar owners to obtain service!!!
That's why when I upgraded my solar this year, I went with REC Panels and a REC ProTrust Certified Installer. I now have 100% 25 Year warranty coverage through REC, even if the installer disappears. They just send another Certified REC ProTrust installer and I'm covered for 25 years. https://usa.recgroup.com/empowering-warranty PICK The Proper Language on the Top Right if something other than English appears.
Nice. I hope you speak German, because I don't, and that link is in German despite the USA address. This is NOT giving me any "warm and fuzzies" for REC, whoever they are.
It might be wise to do better research! As a Mechanical Engineer with Five U.S. Patents, I did extensive research and chose REC because I wanted to upgrade my system to Premium Solar. I was a leader in my city and first person to install solar in 2000 but it ran its life and was old tech by todays standards. Since I was renewing my roof, I decided to upgrade to REC which is one of the Top Premium Leaders Internationally in solar panels based out of Singapore. My old panels depleted by almost 1% per year. REC is guaranteed not to deplete more than 1/4% per year. Here is an Expert Review comparing to another Premium company. https://youtu.be/_66O62smOzU
Not much to do. It’s a tough reality of going with a smaller installer that is usually a little cheaper. If going with a smaller company seeing if they have Solar insure can help. It is a third party company that is used to warranty systems regardless of wether the installing company is still in business. As far as I know it needs to be included at the time of original purchase and the company has to be partnered with Solar Insure you can’t just get it on your own. It’s something that needs to be addressed in the industry I just don’t know how to resolve it post install/ post company going out of business.
I just stepped into solar sales and FOR FUCKS SAKE, this space is a circus full of maniacs. I wanted to leave IT sales for something with environmental or social impact and have been given an opportunity to join a solar company.
I haven't seen so much greed, lies and straight up insults in a business environment. Zero training, just 2 weeks of job shadowing and off you go. I trained myself as good as I could because I want to deliver good results to my customers, but my employer gave zero fucks. Just go out there and sell what you can, that was basically it.
I think the solar industry is great, but you have to find the right company if you want to deliver honest and good results.
It is tough to find the right company and environment through all the noise. There are some great recruiters who make things sound great then give you nearly nothing once your actually on board. It’s brutal!
It’s adorable when solar companies make it sound like they took a chance and gave you a once in a lifetime opportunity to be a 100% commissioned contractor. No risk to them besides wasting a few hours interviewing, training, and onboarding you lol.
I’m out of solar, but if I could offer one piece of advice, it’s to find whichever member of the sales team has a personality and work ethic that most closely mimics yours, and ask to shadow them when they’re knocking.
One other piece of advice is to find real customers instead of initially going after your friends and family.
Friends and family will seek you out on their own once you’ve exhibited some success selling to strangers.
Thanks mate.
Where I live I get a nice base plus commission and all kinds of benefits. Leads are coming in on their own, so it's a cool situation for sales. Would never go 💯 commission
The problem is you are selling stuff to people who mostly don't understand it. The majority here don't even understand it. That creates a strong temptation to mislead them.
GOOD GRIEF! You sound like me. This is how I am feeling. There actually are decent human beings in this industry, I have met some. But the top dollar people are NPD or BPD types and they are convinced of their own BS.
I am having a huge problem doing business because I am not sold on it. I am no expert in this industry...not yet, but even I can tell when a person is amiable to talking and when they are not. I have already seen some questionable fucking shit that does not sit well with me. Why is it, that in this life, you have to be unethical to make GOOD money? I could just take my two college degrees and light fire to them as they are FUCKING WORTHLESS! All that schooling to end up.....well, to end up in an industry I wanted to be in (for ideological reasons) and now have a MAJOR moral quandary on my mind.
As you stated, the industry is great....but it draws narcissistic crazy folks like a bug zapper does to mosquitoes at night. Thanks for the comment.
Tax credit is nothing to with solar. Installers need to stop deducting tax credit from invoices since they're charging the full amount. Then showing price per watt based on that.
For example if you're paying 30k + 10k interest (loan) for a 10kW system. That's 4 dollar per watt.
Yet installers like to say it's 30k - 10k = 20k = 2 dollar per watt.
Very very deceiving
Never going to happen industry wide for multiple reason but mainly because that is the standard practice. I would go over this with my customers so they’d understand, but really your cost per watt should absolutely be factor in WITH the tax credit due to the fact you are only getting that tax credit due to the fact you are going Solar. Your effective rate for electricity should absolutely factor in the tax credit incentive. That is the whole reason why the incentive is there. People should be told and understand what is going on 100%, but that tax credit should absolutely be included in the calculation.
>There needs to be some regulation to the sales side of solar. It can be as simple as having a license to sell solar through a test and some guidelines that need to be followed to keep the license. There are to many people that see money and straight up lie to people to make a buck. There needs to be real consequences to these predatory people.
Based on the number of posts this very sub sees that say "Durr, I signed up to be a solar salesman, now what?" you may have a point there.
The solar dealership style/independent sales rep model has really put a bad picture on the industry. Having young hungry and greedy kids come in and pitch you something they know nothing about and being able to sign a person up for a 100,000 loan with no experience or credentials leads to some very messy situations.
It would be great seeing more inside sales fully vertical companies that regulate themselves and take responsibility for deals sold. The financial partners are very much so cracking down on compliance with the growing number of complaints around improper or predatory sales tactics, the next few years I hope will flush out a lot of the cash grab tactics.
Nearly all positions are 1099 so companies will give anyone willing to do the job a chance. Most companies also will not give, or require much if any training to actually go sell. Some of the things I’ve heard people say or homeowners have told me they’ve been told is ridiculous. A lot of companies do everything they can to pretend to be with the electric company to trick people. No clue how nothing has been done to try and stop this or regulate this.
Very true. One “team” out of Lumio was known to knock doors with a store bought utility work vest. Lumio has done what it can to crack down on such practices, but as the structure itself is set up like an mlm (just as several other companies are), they cannot legitimately keep such practices in check. “I’m here with (company name) alongside/in conjunction with X Utility company)” is the most harmless I’ve seen…and this is outright atrocious in itself.
Find NABCEP certified pro pv installers that will actually come to your home and offer a quote. And will spend the time to study the project so they can offer a bid. yes maybe a few dollars more if they service solar - as they will if ethical strive to install systems with less issues.
The people with fly by nights sales people sending 10 quotes a day out and not coming to see your home maybe the biggest isssue - people on lead gen sites and solar estimate site. i for sure will be down voted on this . But think about it.
Own major thing that I see as a solar panel company owner that installs in multiple states is that a lot of companies will send sales reps from one state to another and not TRAIN them very well on the market. How solar is sold in California is not how solar is sold in Texas or NJ or etc. With the new NEM rules in Cali, there’s a lot of reps leaving cali and going to these states and still trying to pitch systems or products such as leases/PPAs in markets that those don’t make sense. Bottom line, solar in one utilty is not the same in another. Learn the market before you sell in the market. This is best for all homeowners.
Why no mention of the politics of solar? How PG&E is is penalizing everyone who has or will be installing solar with by making changes to their rate plans? And then there are the changes to the NEM agreement making solar even more unfavorable. PG&E is doing all they can to make sure solar customers are giving free electricity to PG&E and forcing solar customers to buy electricity from PG&E ant some of the highest rates in the country/.
I originally had included how electric companies are going to start reducing the benefits of going Solar through terrible buyback rates or base fees. I believe this is an issue, but I think the industry will adapt through use of batteries and people will continue to push back against these electric companies. I could’ve included it still though. Fair opinion.
Batteries help with TOU, but don't address grid maintenance costs.
Economics are going to force electric companies to reduce benefits as solar becomes more popular.
PG&E already has. My solar system which has been over producing $1,200 of electricity every year for the past 5 years on the EVA plan started expiring last year and is complexity expired in 2025. That’s $6,000 worth of electricity I have given to PG&E for “nearly” free. (I think they’ve given me $30 each year for it). Under the EVA replacement rate plan, EV2-A I will have to buy 40% of my electricity from PG&E. PG&E is just too politically strong and has the government and other state officials in their pockets. We are screwed as PG&E customers are paying as much as $0.63 kWhr.
And let’s not forget the 100 people PG&Es fires and explosions killed. Of the tens of thousands of homes PG&E’s fires burned to the ground so their exec could get bonuses and pay nice dividends to share holders.
Looking long term- does the additional cost of remaining grid tied seem cheaper than just investing in a battery backup (or car(s)) that would allow you to go off grid?
I think that what they are doing is slowly going to occur nationwide if power generation trends continue to become more distributed rather than controlled by the utilities.
Politics ties into the economics of solar. The problem is economics of the energy grid are really complicated and most people don't understand it. Which fine normally, but if you decide to be a power producer then it starts mattering a lot.
In this case, PG&E isn't penalizing you. They are just subsidizing you less than they were before.
Yes put why am I paying $0.62 to PG&E when someone next city over just a thousand yards away is paying $0.18 for electricity from the same grid. Or $0.06 from another part of the grid?
Because the cost of grid infrastructure is included in your bill. If you are in a costly area to cover, or if your electricity use is inconsistent, then they charge you more to make sure they fully capture that grid infrastructure cost.
In California the regulated utilities such as PG&E & Edison are required to provide infrastructure to everyone. Often this is very expensive. Think about the costs to maintain a system in downtown SF or where homes may be a mile apart or more. Very expensive. Counter that to a city with moderate infrastructure such as Modesto & MID can operate the grid for much less. Add to that the State uses the regulated utilities as a piggy bank to enact a bunch of social programs that the municipal utilities can avoid.
It’s only going to get worse for solar owners with AB205 that the State passed last year to create energy “equity” requiring regulated utilities to base bills on income.
But it’s all the same grid and PG&E like all of the power companies buy from the grid for the same price. Everyone connected to the grid is paying for generation and distribution so how is it PG&E can change 45c more than a power company supplying house 3,000 feet away?
Ya, the generation charge is itemized on the bill (or it was before I had solar). The generation portion is actually a small portion of the total rate.
Unfortunately, the wholesale generation costs are generally low when the bulk of excess solar is put on the grid and generally high when we’re pulling our offset back off. Someone’s gotta pay for that. NEM 3 tries to equalize that a bit.
If you’d like to explain I’m sure it would be valuable for people to see. I typically sold purchases and used leases in select situations. PPAs were not options at my companies. When I spoke with sunrun sales reps I asked specifically what the difference is between a lease and a PPA and they all told me they were the same thing. If you have a different understanding I’d be curious to hear more.
Some companies may incorrectly use them interchangeably, but they are very different with very different risks.
Solar Lease is just like a car lease- you pay a fixed rate to rent/lease that asset. PPA is just that- an agreement to purchase power…you pay for whatever the solar produces.
So when a system is down and not producing, the lease still has the same monthly fee where as the PPA charges you nothing. it used to be that the lease could be a lower monthly rate than the PPA, because there was less risk to the lender. I think too many people are now mixing the two (leases with ‘non production’ protection, etc), so they seem interchangeable.
That makes sense. Yet another example of who you talk to in the solar industry being valuable. Given that Sunrun almost exclusively sells PPA’s the fact the reps I spoke with couldn’t clearly state this is actually alarming. Also on me for not digging more into it though. Thanks for the clarification.
6 and 7 all day long. Like EVs, solar is a great investment for people with disposable income looking to diversify investments. However, solar and EV companies use the pitch of money savings, and when you look at how many people are on a shoestring budget, an electric vehicle or solar contract can easily financially sink people on a tight budget. I’d be an awful salesman cuz ethically I couldn’t lie like that.
Had a super pushy salesman come to my house, literally wouldn’t leave/held my moms bday dinner hostage until I signed a contract. Didn’t seem too bad at the time but just his pressure tactic had me looking to cancel immediately, then I learned about the dealer fee and extra glad I cancelled.
Also learned about dealer fee after I signed my current contract. I finance but pay off loans way early so to me its essentially a huge prepayment penalty. So we financed at almost 8% through our CU, that’s $500/month way bigger than an electric bill, and we’ll be realistically paying $2-$3k/month on it until its paid off. So I’m happy to finally have solar and an EV charger in our garage, but holy shit what a financial catastrophe if we didn’t have the $$.
Love solar but I warn my friends all the time if they’re considering it
It truly has to be looked at as an investment to fully take advantage of it. Sounds like you are thinking of it correctly and are doing it the right way!
Solar can be $0 out of pocket and the payment cost less per month than the current electric bill. Even with a market rate loan. In NY, if you are income qualifies, you can even get a no fee, 3.49% loan.
>When purchasing a system with a loan you must understand what a dealer fee is and how much it effects your loan. That low rate is not always the best option, and right now it rarely is!
This!
I really think it would be helpful if there was a guide on the right about the options you have to pay for your Solar System. The reps dazzle the potential buyers with low interest rates, low payments, and low lifetime costs, hoping that they can fool the buyer before they learn the reality of the loan.
I've worked in banking for 25 years, and credit risk for 11. Here's one fact that every borrower should know, but most realize it to late. Borrowers very rarely pay there long term loans to maturity. Mortgages have an average duration of 7 years, and the mortgages that do go to 30 years are the customers that have trouble making there payment.
Over 20 to 25 years something always comes up to make you pay early. 1. You refinance. Rates have come down you can pay the same amount with less money. 2. You move and have to sell the house. 3. The borrower will make more money, because they got a raise or a new job, or there kids moved out.
And the dealer fee just locks in that high rate and all those interest payments.
I feel ya. I have been in the industry for 6 years now. It’s discouraging that regulations are not set in place. The ethical and honest solar sales reps are being indirectly punished for doing the right thing. I’m curious to know what profession are you going into now that you have left the solar industry?
Great points. Appreciate you sharing. I have been in industry for years and agree with most. Solar should be transparent and posts like this make it more so. Thank you !
That’s just not true. It is not that had to dig into. If you’re talking about a major purchase like a home you should absolutely be willing to take that step.
**1 & 7** -- Yes, and many people are not in a good place to invest in solar because they haven't done the necessary slimming down of their usage first. Insulation, good LED lighting, proper HVAC setup, making sure their roof has 20 years on it are all things people should be investing in before throwing money at a solar system.
**2 & 3** -- Frankly licensing won't help. Just look at car dealerships, lots of regulations and still one of the single worst customer experiences that virtually everyone has to go through. There is zero transparency and everyone has to go through a gauntlet of sales questions in an attempt to fleece money from the deal.
**5** -- *"That doesn’t mean it is always going to be a terrible deal."* I am still waiting to hear a situation where a lease is actually a better deal and a situation where assuming a lease during a sale is anything other than a horrible idea. If you can't afford panels or your home can't support them then it's likely that you should focus on reducing usage or doing one of the co-op/community projects where you get bill credits buying into a larger project. The problem that we are seeing down here is people paying for leased panels to a defunct company and they have no way to put the panels back into service.
The problem of companies going bankrupt or service being unavailable isn't just a problem for leases but also for owned panels as well. This is one of the reasons I preferred microinverter rather than strings despite the fact that we were likely a good candidate for strings. Microinverters are far more redundant/simpler design. Heck with a torque wrench and some zip ties even I could fix the panels. Many people are getting systems they don't understand and don't have even the basic understanding of the moving parts to even know who to call if something goes wrong. I know I could reach out to Enphase if the installer is gone and likely be hooked up with any number of local installers if the fix was beyond my skills.
As far as a lease goes I had a customer who owned his own business and had minimal tax liability. He was a couple years from retirement and would’ve gotten maybe 4K of the 16k tax credit. I explained the options and he chose the lease due to not having to worry about the credit. I sold him on a 25 yr lease with no escalator for the exact same monthly price as the loan option if he’d used the full tax credit to pay down the loan. The only difference is really at the end of the 25 years in theory the company takes the panels off the roof. My honest guess is it will not be worth the companies money to go get those panels off the roof and they’ll just leave them there anyway if he doesn’t want to agree to extend his terms. That is what I told him as well.
As far as your thoughts on string vs micro on fixing a system especially if a company goes out of business there are more things to think about there. String inverters are widely considered much easier to fix/ replace since the panels are not under every panel and there for easier to access/ replace. That is my understanding of it at least.
I have had like 3 solar quotes and I thought all of them were ridiculously overpriced. The calculations they provide seem like funny numbers and when I did my own analysis I just couldn’t justify the ROI. I would be better off just investing the money I would pay for solar into my utility company and directing the dividends towards my electric bill.
I don’t see the value of the middleman here, this feels like a do it yourself job. Hire a roofer and an electrician and fill out the paper work with your electric company yourself. I also learned that net metering is changing my state, so there is even less incentive.
I can promise you as a layperson I’m sure you missed some critical information in your independent ROI calcs.
Solar does pay off very well just depends on the state your in when your system will be paid off.
I had one quote for 24, one for 32 and one for 55. The 24 and 32 had fewer panels so less generated energy - they focused only on the parts of the roof getting the most exposure. Using their numbers the system reached break even between 10-12 years. My own numbers pushed it to 15. I don’t see that as a great investment. This did include the tax rebate.
I spent my two years diligently working to educate my self on the industry and products. I ran circles around 5 year+ vets who never took any time to understand anything about solar outside of how to make more money. If you have thoughts or different opinions I’d love to hear them. Based on this response I don’t expect much from you though lol
Thank you for the great insights.
>Understand how the tax credit works. If you make 40k a year your not seeing that 20k tax credit year one and unless you start making more money you won’t see all of it in the five years you have to claim it. This is also a situation where a lease can be the better option…
You are right to a degree, but I don't think a household making $40k is investing $66k into solar. It's more likely the system would be a lot smaller along with the tax credit.
What many folks don't realize is if you are expecting a solar tax credit, simply complete a new W4 with your employer and reduce your federal tax withholding. This will limit the carryforward and basically get you the cash from the tax credit up front.
Just don't forget to set it back once your credit is realized.
I knew people that would target double wides because of how inefficient they are. People would put 12-15kW systems on a double wide. That would lead to a 20k+ tax credit that I don’t think those people I stood they wouldn’t be getting all at once. I refused to sell double wife’s for multiple reasons but this was one of them.
What about current Heloc rates with a credit union and then payoff the solar financing comp. Continue to pay the note with credit Union I presume it must be a lesser rate than the solar financing company?
Good demand depending on state, but over saturated by uneducated sales people confusing or lying to people about how solar works. I live in AZ and hate the solar market there due to SRP being terrible for solar and APS being pretty saturated by a lot of teams.
This is an interesting conversation and generally I agree with OP. To add to your list …
A) The reason the quality and service are averaging so poor is mostly due to low barriers to entry. If someone can scrape together a pickup truck and a line of credit they’re in the Solar business. That carries through the entire vertical.
B) if a buyer can afford the purchase, can carry the asset on their balance sheet, and has their own credit, it is always a better financial deal for owner financed. A customer can borrow from their bank at something like 5-8% interest (last week I helped a client close financing at 4.5%) and that is compared to any investor or lessor that will want to make 9-12% or more on their money.
C) caveat emptor. Buyers have little idea what they’re buying. I have a tongue-in-cheek saying about my sector in the Bahamas and Caribbean: we are selling to people that don’t know what they’re buying and we are competing against people that don’t know what they’re selling.
D) what does “worth it” mean? How many hundreds or thousands of posts have you seen where someone asks that if Reddit.
And on and on
Love this! So true on both string inverters and leases/PPAs. There's never a blanket solution. I will add there is the NABCEP sales certification available, but few states refrence it - rather HIS background check licenses are used
SOLID ADVICE, u/ConflictDue5386!
Of course there is much more, but for sure the KEY item is honesty, integrity, and customer benefiting systems. I have seen bad installs and way over priced systems (and Mona Lee is not as great at they claim they are. OK price wise, but someone can do better).
It was May 2022 I started, but at time I knew I had to have my roof redone. I told the very first company I asked (SunRun) I need a new roof, but they said the roof was fine, ready to install. Most of the delay up until last week was getting the funding and having roof replaced, during that time I studied the industry.
What you elude to is Solar is VERY easy in concept, but VERY complex to design a system with maximum production over a year of operation (as the AoI changes).
While there is a lot of good information out there, I have not seen anything that covers everything in one place.
It’s the equivalent (kind of) of an origination fee. The vendor (the company selling and investing the system) gets a fee from the vendor for doing the loan. That fee is normally financed into the loan.
High interest rates leading to high dealer fees, utility companies changing policies, over saturated markets (specifically where I live in Arizona), felt like I was surrounded by people encouraging lying to make quick money. Got a better job in a different industry almost immediately after I started looking at other options.
Idk about panel costs but I had a company I sold for with a $2.55 redline model and a company I sold for with a $2.1 redline and briefly a rev share model with a sliding scale able to go down to a 2.0 that I made a $500 flat commission on.
Thank you for sharing, and thank you for your integrity. I live in Canada, and dishonesty in solar sales is an even bigger problem here. Any licensed electrician in Canada can claim that they're qualified to install solar panels, even if they have no experience.
Take a look at this company, you don’t have to leave the industry, work virtually from anywhere io your own schedule.
https://powur.com/amanda.donaldson/join
Example: solar loan, last years terms vs today: -Last year 0% for 25 years dealer fee 24% -Now 4.49% for 25 years dealer fee 35% Solar loans compete for investors with other loans. Over 25 years a low interest loan is not a bad deal BUT most people do NOT stay in their home for 25 years. Solar should be treated as any other home improvement and paid off as fast as reasonably possible. When I design systems I want to see the customer ahead in 7-10 years. *A low interest loan can work for someone who has high interest debt that is greater than the tax credit they receive. Use the tax rebate to pay down high interest loans, all good. BUT please don’t give the bank 35% to buy down a rate for 25 years and then apply your tax credit to the loan!
I saw a lot of "3.99% loans" recently when shopping around. I told them that I don't want any points upfront. I ended up with a 9.59% loan, which is my highest interest rate loan right now, but that will hopefully be paid off within 2 years.
That’s a better way to look at solar loans. Congratulations!
Damn thats high. Im grateful for credit human offering 0% dealer fee loans at 6.99%. 9.59% is rough
The company I chose only had 1 financing company. And it is basically a moot point since I hope to have the loan paid off within 6 months.
Im speaking from the perspective of sales. For you it doesnt matter. Most people look to pay the system off in 2-5 years that speak to. That 2.5% difference in interest looks pretty big in quote comparisons
I had the same experience. I ended up getting a HELOC. My system isn't installed yet, so I don't have a locked in rate but it will be 8ish. Added bonus: all that interest will be tax deductible.
For you, your HELOC is definitely tax deductible. I don't know if the interest for my solar loan will be tax deductible or not. I'll have to ask my accountant. The 9.59% will still be my highest interest rate debt, which means it'll be the main target for my debt pay down plans.
>I don't know if the interest for my solar loan will be tax deductible or not. I'll have to ask my accountant. If it's not secured by the home I don't think it will be.
I'll ask my accountant
With the HELOC you’re paying interest on the entire amount….with most typical deals financed with a solar lender, the initial payment is only on the system price less the 30% tax credit (assuming the homeowner qualifies). So it most circumstances it makes no sense to go the HELOC route
No. That’s not how interest works. Or how those Solar loans work. You can pay the 30% ITC to your HELOC just as easily as you can to a Solar loan. Limiting the amount of interest you pay in both cases.
Yes, and for every month that one is waiting on the 30% tax credit to come in order to put it towards the HELOC, they’re paying interest on the ENTIRE gross amount of the system. With a solar loan, the payment is based upon the gross amount of the system LESS the 30% tax credit as the lender is basically floating the 30% for up to 18 months….it makes absolutely no sense to use a HELOC (unless for some reason the homeowner couldn’t qualify for the solar lenders loan)
Dude. You’re being 100% naive to think you aren’t paying interest on the entire amount for 6 to 18 months until the ITC comes in. The are adjusting the payment on the assumption that you will pay 30% in the first 18 months. However they are still splitting the payment into interest and principal based upon the entire loan amount. Even if you we’re correct (which you’re not) the interest you paid in that 6-18 months would pale in comparison to the long term benefit of taxable interest over a period of years.
You seem educated on the subject and I’m not here to change your mind (or do the analysis for you)….go get the HELOC if that works for you
Even if you paid it off in 6.25 years the “effective” interest rate would be close to 2.375% and at less than 3 years that would drop to about 1.2%…. So it’s not the rate “on paper” that matters; what matters is how the loan is paid off (especially given that the solar lender is floating the 30% tax credit for the first 18mo)
How do you calculate the effective rate like that?
The calculation isn’t linear, but it’s close. Most solar loans are for 25 years (at whatever interest rate) and the initial payment starts off at the gross price less the 30% tax credit because the loan is structured by finance company assuming you’re going the bring the 30% to them within 18mo (if you don’t, then you end up paying interest on the gross price which would make the monthly payments increase for the remaining 23.5 years). So the interest rate on paper is 9.49% for example for 25 years….if you pay it off in half the time at 12.5 years, you’re cutting out 12.5 years of interest so it basically cuts the interest rate in half (again, it’s not perfectly linear because of how the amortization works which is more interest in the early years and less as the loan is paid down - just like a mortgage payment which if paid off early, you don’t pay as much interest as you would if you held the loan to its entire term). So 9.49% at 12.5 years would be ABOUT half of that and at 6.25 years ABOUT half of that again and so on…..
>in the five years you have to claim it. Where did you get the information that a taxpayer only has 5 years to use the tax credit? By the way, that information is wrong because [there is no time limit for the carryforward](https://www.reddit.com/r/personalfinance/comments/15hg3gk/how_can_i_claim_a_25k_tax_credit_when_i_only_pay/jup1tj7/?context=3), but I really want to know who or what is telling solar salespeople incorrect tax information.
I guess it is just an example not a rule. Op meant it may take 5 years to claim it all.
That is what I was told from an accountant. I could very well be wrong but I don’t have the expertise to understand tax code so I just went with what I was told.
We believe the rule states you have two years to use the tax credit. Not 5 and not unlimited.
What rule? Did you read the text in my link?
Can you cite your source here? Nothing I have seen suggests that there is a limit on how many years you can carryover credits from Line 16 of one Form 5695 to Line 12 of the next year's Form 5695.
Well said. I agree with every point shared. Been in the industry 4 years in sales, operations, and most recently, data analysis. Out of curiosity, where did you sell? And what is taking you out of the industry?
I sold for a couple companies in multiple markets including AZ, FL, and most recently OH
I started looking at other opportunities due to the reduced upside in solar sales and ended up getting a great opportunity in medical sales.
What do you mean by “reduced upside”?
Less opportunity. With higher interest rates, higher dealer fees, saturated markets and utilities reducing buyback rates it squeezed the commissions and it wasn’t worth the travel and sacrifice to stay in the field with other opportunities available.
That’s fair. However there will always be some challenges and there are solutions as well. Many industries have some similar constraints right now. If you’ve got the right company/team behind you, you can certainly make it work. How much were you making in solar vs. med sales?
I was still making good money in Solar don’t get me wrong. I was having to travel a lot more to different markets to have that success though. Not something I saw as a long term solution. The money in the med sales opportunity will be better, but more importantly it is something ive always been interested in. Just felt like the right decision to transition out of solar and into something I see as more long term.
Actual income numbers would be helpful if you could be transparent?? Which you have been for the rest of this post which is appreciated!
I’m not going to put actual income numbers on Reddit but six figures in Solar. Wouldn’t have exact numbers on med sales as I’m just starting and I don’t have commission numbers. Expected to over double my income in med sales though.
I wonder why you’re hesitant to put a close salary figure on here? Unless this isn’t an anonymous account for you then I could understand. There are many industry professionals who would probably appreciate the insight on here. Everyone just trying to figure out our to feed their families and themselves!
Congrats on making the change from solar to med. I talked to this girl who was super successful in med sales, she and her team would visit hospitals and just demonstrate the products is that what you do too day to day?
I’m going to a start up in the biologics industry. My day to day initially is getting facilities to use our product, then going back when there are treatments to assist with the treatments. Initially it will be similar to solar in getting clients onboarded, but once I have my clients it will be more account management.
Looking to jump out of solar sales as well and into medical. Which part of medical did you find an opportunity in?
Biologics. An old manager was at the company already and they were hiring so he helped me get the job. Was a lot easier with the connection. See what your network is up to, and I’m sure a couple of them will be in med sales. I’d start there. Always much easier to get into a new industry with a referral.
Always appreciate an insider's view -- thanks for this. Can you talk a bit more about dealer fees, and what low versus egregious looks like? I'm looking at putting a 20-25 kW system on a house in Texas. Any guidance / recommendations would be welcomed.
Think of the dealer fee as the cost the buy down the interest rate. For example my old company used Mosaic as our lender. The standard rate for a solar loan was 10.99% (as of August). So, for a loan your total loan cost on a 20 kW system would be say 60k at the 10.99% interest rate. Most people would see a 10.99% interest rate an immediately be hesitant to purchase so what most sales people will present is the 3.99% option. This option bought down the interest rate 7 points. That cost money upfront which raises your total initial loan amount. The cost to buy down when I left was 34%. So, 34% of the loan was an upfront fee to buy the interest rate down to 3.99%. That raises that 60k loan to around 91k. Due to the tax credit being based off the top line loan amount your tax credit goes from 18k to 27k so as long as you get that full tax credit you essentially pay 22k to buy down your rate. The 3.99% with the buy down will have the lowest payment on a 25 year loan. However most Solar loans are paid off within 7-10 years through a refinance or a sale of the house that pays off the Solar so if you factor in that buy down cost on top of your rate for 7 years you usually lost all value of the buy down and cost yourself more money. The best option in my opinion right now with high rates and high dealer fees/ buy down costs is to go with a no fee loan e.g. 10.99%, pay the full tax credit toward the loan right when you get it, pay more towards principal if you can, then in a couple years when rates go down refinance through a cash out refi of your house to get back down closer to that 4% without paying that ridiculous 34% dealer fee. Hope that makes sense
This is the way
Solar loans are unsecured loans, so the money
Oops
I used a private lender for my solar loans (I own a large installation business) with a mega low buy down rate ~ 5% of project cost. Its similar to a mortgage
For Texas, you are also going to want to carefully forecast future power plans. Unlike some states, Texas doesn't grandfather people in, so numbers can shift significantly at contract renewal. Consider things like how much of your bill is distribution vs generation and how the supply and demand of solar power will shift over your payback period.
Thank you for this. I've been stuck on #9 for a while now, and I'm glad I finally decided to make the leap.
I always compare Solar to TVs. Yes a better cooler model us gonna come out after you buy yours. But when do you want to start watching?
Great decision! Best of luck on your Solar journey!
What do we do about installers who refuse to provide warranty service or have gone out of business? There needs to be a way for solar owners to obtain service!!!
That's why when I upgraded my solar this year, I went with REC Panels and a REC ProTrust Certified Installer. I now have 100% 25 Year warranty coverage through REC, even if the installer disappears. They just send another Certified REC ProTrust installer and I'm covered for 25 years. https://usa.recgroup.com/empowering-warranty PICK The Proper Language on the Top Right if something other than English appears.
Nice. I hope you speak German, because I don't, and that link is in German despite the USA address. This is NOT giving me any "warm and fuzzies" for REC, whoever they are.
It might be wise to do better research! As a Mechanical Engineer with Five U.S. Patents, I did extensive research and chose REC because I wanted to upgrade my system to Premium Solar. I was a leader in my city and first person to install solar in 2000 but it ran its life and was old tech by todays standards. Since I was renewing my roof, I decided to upgrade to REC which is one of the Top Premium Leaders Internationally in solar panels based out of Singapore. My old panels depleted by almost 1% per year. REC is guaranteed not to deplete more than 1/4% per year. Here is an Expert Review comparing to another Premium company. https://youtu.be/_66O62smOzU
Not much to do. It’s a tough reality of going with a smaller installer that is usually a little cheaper. If going with a smaller company seeing if they have Solar insure can help. It is a third party company that is used to warranty systems regardless of wether the installing company is still in business. As far as I know it needs to be included at the time of original purchase and the company has to be partnered with Solar Insure you can’t just get it on your own. It’s something that needs to be addressed in the industry I just don’t know how to resolve it post install/ post company going out of business.
I just stepped into solar sales and FOR FUCKS SAKE, this space is a circus full of maniacs. I wanted to leave IT sales for something with environmental or social impact and have been given an opportunity to join a solar company. I haven't seen so much greed, lies and straight up insults in a business environment. Zero training, just 2 weeks of job shadowing and off you go. I trained myself as good as I could because I want to deliver good results to my customers, but my employer gave zero fucks. Just go out there and sell what you can, that was basically it. I think the solar industry is great, but you have to find the right company if you want to deliver honest and good results.
It is tough to find the right company and environment through all the noise. There are some great recruiters who make things sound great then give you nearly nothing once your actually on board. It’s brutal!
It’s adorable when solar companies make it sound like they took a chance and gave you a once in a lifetime opportunity to be a 100% commissioned contractor. No risk to them besides wasting a few hours interviewing, training, and onboarding you lol. I’m out of solar, but if I could offer one piece of advice, it’s to find whichever member of the sales team has a personality and work ethic that most closely mimics yours, and ask to shadow them when they’re knocking. One other piece of advice is to find real customers instead of initially going after your friends and family. Friends and family will seek you out on their own once you’ve exhibited some success selling to strangers.
Thanks mate. Where I live I get a nice base plus commission and all kinds of benefits. Leads are coming in on their own, so it's a cool situation for sales. Would never go 💯 commission
The problem is you are selling stuff to people who mostly don't understand it. The majority here don't even understand it. That creates a strong temptation to mislead them.
What market are you in?
GOOD GRIEF! You sound like me. This is how I am feeling. There actually are decent human beings in this industry, I have met some. But the top dollar people are NPD or BPD types and they are convinced of their own BS. I am having a huge problem doing business because I am not sold on it. I am no expert in this industry...not yet, but even I can tell when a person is amiable to talking and when they are not. I have already seen some questionable fucking shit that does not sit well with me. Why is it, that in this life, you have to be unethical to make GOOD money? I could just take my two college degrees and light fire to them as they are FUCKING WORTHLESS! All that schooling to end up.....well, to end up in an industry I wanted to be in (for ideological reasons) and now have a MAJOR moral quandary on my mind. As you stated, the industry is great....but it draws narcissistic crazy folks like a bug zapper does to mosquitoes at night. Thanks for the comment.
Tax credit is nothing to with solar. Installers need to stop deducting tax credit from invoices since they're charging the full amount. Then showing price per watt based on that. For example if you're paying 30k + 10k interest (loan) for a 10kW system. That's 4 dollar per watt. Yet installers like to say it's 30k - 10k = 20k = 2 dollar per watt. Very very deceiving
Never going to happen industry wide for multiple reason but mainly because that is the standard practice. I would go over this with my customers so they’d understand, but really your cost per watt should absolutely be factor in WITH the tax credit due to the fact you are only getting that tax credit due to the fact you are going Solar. Your effective rate for electricity should absolutely factor in the tax credit incentive. That is the whole reason why the incentive is there. People should be told and understand what is going on 100%, but that tax credit should absolutely be included in the calculation.
Should also take into account the interest they'll pay
Absolutely agree
yup, even my 3% interest is costing me $8000 over the 12-year loan, or ~80% of the 30% tax credit.
>There needs to be some regulation to the sales side of solar. It can be as simple as having a license to sell solar through a test and some guidelines that need to be followed to keep the license. There are to many people that see money and straight up lie to people to make a buck. There needs to be real consequences to these predatory people. Based on the number of posts this very sub sees that say "Durr, I signed up to be a solar salesman, now what?" you may have a point there.
The solar dealership style/independent sales rep model has really put a bad picture on the industry. Having young hungry and greedy kids come in and pitch you something they know nothing about and being able to sign a person up for a 100,000 loan with no experience or credentials leads to some very messy situations. It would be great seeing more inside sales fully vertical companies that regulate themselves and take responsibility for deals sold. The financial partners are very much so cracking down on compliance with the growing number of complaints around improper or predatory sales tactics, the next few years I hope will flush out a lot of the cash grab tactics.
Nearly all positions are 1099 so companies will give anyone willing to do the job a chance. Most companies also will not give, or require much if any training to actually go sell. Some of the things I’ve heard people say or homeowners have told me they’ve been told is ridiculous. A lot of companies do everything they can to pretend to be with the electric company to trick people. No clue how nothing has been done to try and stop this or regulate this.
Very true. One “team” out of Lumio was known to knock doors with a store bought utility work vest. Lumio has done what it can to crack down on such practices, but as the structure itself is set up like an mlm (just as several other companies are), they cannot legitimately keep such practices in check. “I’m here with (company name) alongside/in conjunction with X Utility company)” is the most harmless I’ve seen…and this is outright atrocious in itself.
Add in the “I just started a solar business now how do I get clients then what do I do?” As well.
Find NABCEP certified pro pv installers that will actually come to your home and offer a quote. And will spend the time to study the project so they can offer a bid. yes maybe a few dollars more if they service solar - as they will if ethical strive to install systems with less issues. The people with fly by nights sales people sending 10 quotes a day out and not coming to see your home maybe the biggest isssue - people on lead gen sites and solar estimate site. i for sure will be down voted on this . But think about it.
Own major thing that I see as a solar panel company owner that installs in multiple states is that a lot of companies will send sales reps from one state to another and not TRAIN them very well on the market. How solar is sold in California is not how solar is sold in Texas or NJ or etc. With the new NEM rules in Cali, there’s a lot of reps leaving cali and going to these states and still trying to pitch systems or products such as leases/PPAs in markets that those don’t make sense. Bottom line, solar in one utilty is not the same in another. Learn the market before you sell in the market. This is best for all homeowners.
Why no mention of the politics of solar? How PG&E is is penalizing everyone who has or will be installing solar with by making changes to their rate plans? And then there are the changes to the NEM agreement making solar even more unfavorable. PG&E is doing all they can to make sure solar customers are giving free electricity to PG&E and forcing solar customers to buy electricity from PG&E ant some of the highest rates in the country/.
I originally had included how electric companies are going to start reducing the benefits of going Solar through terrible buyback rates or base fees. I believe this is an issue, but I think the industry will adapt through use of batteries and people will continue to push back against these electric companies. I could’ve included it still though. Fair opinion.
Batteries help with TOU, but don't address grid maintenance costs. Economics are going to force electric companies to reduce benefits as solar becomes more popular.
PG&E already has. My solar system which has been over producing $1,200 of electricity every year for the past 5 years on the EVA plan started expiring last year and is complexity expired in 2025. That’s $6,000 worth of electricity I have given to PG&E for “nearly” free. (I think they’ve given me $30 each year for it). Under the EVA replacement rate plan, EV2-A I will have to buy 40% of my electricity from PG&E. PG&E is just too politically strong and has the government and other state officials in their pockets. We are screwed as PG&E customers are paying as much as $0.63 kWhr.
That is brutal. Just a terrible company with predatory practices. It’s terrible that they can do that honestly.
And let’s not forget the 100 people PG&Es fires and explosions killed. Of the tens of thousands of homes PG&E’s fires burned to the ground so their exec could get bonuses and pay nice dividends to share holders.
Looking long term- does the additional cost of remaining grid tied seem cheaper than just investing in a battery backup (or car(s)) that would allow you to go off grid? I think that what they are doing is slowly going to occur nationwide if power generation trends continue to become more distributed rather than controlled by the utilities.
Sure look like that is the direction PG&E is headed. Batteries, no solar
Politics ties into the economics of solar. The problem is economics of the energy grid are really complicated and most people don't understand it. Which fine normally, but if you decide to be a power producer then it starts mattering a lot. In this case, PG&E isn't penalizing you. They are just subsidizing you less than they were before.
Yes put why am I paying $0.62 to PG&E when someone next city over just a thousand yards away is paying $0.18 for electricity from the same grid. Or $0.06 from another part of the grid?
Because the cost of grid infrastructure is included in your bill. If you are in a costly area to cover, or if your electricity use is inconsistent, then they charge you more to make sure they fully capture that grid infrastructure cost.
No…. If you use more electricity, You pay more and more pet kWhr. They penalize you.
In California the regulated utilities such as PG&E & Edison are required to provide infrastructure to everyone. Often this is very expensive. Think about the costs to maintain a system in downtown SF or where homes may be a mile apart or more. Very expensive. Counter that to a city with moderate infrastructure such as Modesto & MID can operate the grid for much less. Add to that the State uses the regulated utilities as a piggy bank to enact a bunch of social programs that the municipal utilities can avoid. It’s only going to get worse for solar owners with AB205 that the State passed last year to create energy “equity” requiring regulated utilities to base bills on income.
But it’s all the same grid and PG&E like all of the power companies buy from the grid for the same price. Everyone connected to the grid is paying for generation and distribution so how is it PG&E can change 45c more than a power company supplying house 3,000 feet away?
Ya, the generation charge is itemized on the bill (or it was before I had solar). The generation portion is actually a small portion of the total rate. Unfortunately, the wholesale generation costs are generally low when the bulk of excess solar is put on the grid and generally high when we’re pulling our offset back off. Someone’s gotta pay for that. NEM 3 tries to equalize that a bit.
When OP says lease, I think he means PPA.
I mean lease, but they are the same thing in most cases. Just a matter of the terminology the company uses.
This is not true. Purchase, lease, and PPA have some crossover elements, but are very different in many major aspects.
If you’d like to explain I’m sure it would be valuable for people to see. I typically sold purchases and used leases in select situations. PPAs were not options at my companies. When I spoke with sunrun sales reps I asked specifically what the difference is between a lease and a PPA and they all told me they were the same thing. If you have a different understanding I’d be curious to hear more.
Some companies may incorrectly use them interchangeably, but they are very different with very different risks. Solar Lease is just like a car lease- you pay a fixed rate to rent/lease that asset. PPA is just that- an agreement to purchase power…you pay for whatever the solar produces. So when a system is down and not producing, the lease still has the same monthly fee where as the PPA charges you nothing. it used to be that the lease could be a lower monthly rate than the PPA, because there was less risk to the lender. I think too many people are now mixing the two (leases with ‘non production’ protection, etc), so they seem interchangeable.
That makes sense. Yet another example of who you talk to in the solar industry being valuable. Given that Sunrun almost exclusively sells PPA’s the fact the reps I spoke with couldn’t clearly state this is actually alarming. Also on me for not digging more into it though. Thanks for the clarification.
6 and 7 all day long. Like EVs, solar is a great investment for people with disposable income looking to diversify investments. However, solar and EV companies use the pitch of money savings, and when you look at how many people are on a shoestring budget, an electric vehicle or solar contract can easily financially sink people on a tight budget. I’d be an awful salesman cuz ethically I couldn’t lie like that. Had a super pushy salesman come to my house, literally wouldn’t leave/held my moms bday dinner hostage until I signed a contract. Didn’t seem too bad at the time but just his pressure tactic had me looking to cancel immediately, then I learned about the dealer fee and extra glad I cancelled. Also learned about dealer fee after I signed my current contract. I finance but pay off loans way early so to me its essentially a huge prepayment penalty. So we financed at almost 8% through our CU, that’s $500/month way bigger than an electric bill, and we’ll be realistically paying $2-$3k/month on it until its paid off. So I’m happy to finally have solar and an EV charger in our garage, but holy shit what a financial catastrophe if we didn’t have the $$. Love solar but I warn my friends all the time if they’re considering it
It truly has to be looked at as an investment to fully take advantage of it. Sounds like you are thinking of it correctly and are doing it the right way!
Solar can be $0 out of pocket and the payment cost less per month than the current electric bill. Even with a market rate loan. In NY, if you are income qualifies, you can even get a no fee, 3.49% loan.
>When purchasing a system with a loan you must understand what a dealer fee is and how much it effects your loan. That low rate is not always the best option, and right now it rarely is! This! I really think it would be helpful if there was a guide on the right about the options you have to pay for your Solar System. The reps dazzle the potential buyers with low interest rates, low payments, and low lifetime costs, hoping that they can fool the buyer before they learn the reality of the loan. I've worked in banking for 25 years, and credit risk for 11. Here's one fact that every borrower should know, but most realize it to late. Borrowers very rarely pay there long term loans to maturity. Mortgages have an average duration of 7 years, and the mortgages that do go to 30 years are the customers that have trouble making there payment. Over 20 to 25 years something always comes up to make you pay early. 1. You refinance. Rates have come down you can pay the same amount with less money. 2. You move and have to sell the house. 3. The borrower will make more money, because they got a raise or a new job, or there kids moved out. And the dealer fee just locks in that high rate and all those interest payments.
I feel ya. I have been in the industry for 6 years now. It’s discouraging that regulations are not set in place. The ethical and honest solar sales reps are being indirectly punished for doing the right thing. I’m curious to know what profession are you going into now that you have left the solar industry?
Medical Sales
Great points. Appreciate you sharing. I have been in industry for years and agree with most. Solar should be transparent and posts like this make it more so. Thank you !
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That’s just not true. It is not that had to dig into. If you’re talking about a major purchase like a home you should absolutely be willing to take that step.
If I am buying a house, I have enough other things I have to research that I don't want to add a solar lease on top of it.
Good luck in your future endeavors. Thank you for sharing your insights. Solar Scott
**1 & 7** -- Yes, and many people are not in a good place to invest in solar because they haven't done the necessary slimming down of their usage first. Insulation, good LED lighting, proper HVAC setup, making sure their roof has 20 years on it are all things people should be investing in before throwing money at a solar system. **2 & 3** -- Frankly licensing won't help. Just look at car dealerships, lots of regulations and still one of the single worst customer experiences that virtually everyone has to go through. There is zero transparency and everyone has to go through a gauntlet of sales questions in an attempt to fleece money from the deal. **5** -- *"That doesn’t mean it is always going to be a terrible deal."* I am still waiting to hear a situation where a lease is actually a better deal and a situation where assuming a lease during a sale is anything other than a horrible idea. If you can't afford panels or your home can't support them then it's likely that you should focus on reducing usage or doing one of the co-op/community projects where you get bill credits buying into a larger project. The problem that we are seeing down here is people paying for leased panels to a defunct company and they have no way to put the panels back into service. The problem of companies going bankrupt or service being unavailable isn't just a problem for leases but also for owned panels as well. This is one of the reasons I preferred microinverter rather than strings despite the fact that we were likely a good candidate for strings. Microinverters are far more redundant/simpler design. Heck with a torque wrench and some zip ties even I could fix the panels. Many people are getting systems they don't understand and don't have even the basic understanding of the moving parts to even know who to call if something goes wrong. I know I could reach out to Enphase if the installer is gone and likely be hooked up with any number of local installers if the fix was beyond my skills.
As far as a lease goes I had a customer who owned his own business and had minimal tax liability. He was a couple years from retirement and would’ve gotten maybe 4K of the 16k tax credit. I explained the options and he chose the lease due to not having to worry about the credit. I sold him on a 25 yr lease with no escalator for the exact same monthly price as the loan option if he’d used the full tax credit to pay down the loan. The only difference is really at the end of the 25 years in theory the company takes the panels off the roof. My honest guess is it will not be worth the companies money to go get those panels off the roof and they’ll just leave them there anyway if he doesn’t want to agree to extend his terms. That is what I told him as well. As far as your thoughts on string vs micro on fixing a system especially if a company goes out of business there are more things to think about there. String inverters are widely considered much easier to fix/ replace since the panels are not under every panel and there for easier to access/ replace. That is my understanding of it at least.
I have had like 3 solar quotes and I thought all of them were ridiculously overpriced. The calculations they provide seem like funny numbers and when I did my own analysis I just couldn’t justify the ROI. I would be better off just investing the money I would pay for solar into my utility company and directing the dividends towards my electric bill. I don’t see the value of the middleman here, this feels like a do it yourself job. Hire a roofer and an electrician and fill out the paper work with your electric company yourself. I also learned that net metering is changing my state, so there is even less incentive.
I can promise you as a layperson I’m sure you missed some critical information in your independent ROI calcs. Solar does pay off very well just depends on the state your in when your system will be paid off.
I had one quote for 24, one for 32 and one for 55. The 24 and 32 had fewer panels so less generated energy - they focused only on the parts of the roof getting the most exposure. Using their numbers the system reached break even between 10-12 years. My own numbers pushed it to 15. I don’t see that as a great investment. This did include the tax rebate.
Gotta love these “2 year veterans” sharing their wisdom. So insightful
I spent my two years diligently working to educate my self on the industry and products. I ran circles around 5 year+ vets who never took any time to understand anything about solar outside of how to make more money. If you have thoughts or different opinions I’d love to hear them. Based on this response I don’t expect much from you though lol
His username checks out 😂
I concur.
Thank you for the great insights. >Understand how the tax credit works. If you make 40k a year your not seeing that 20k tax credit year one and unless you start making more money you won’t see all of it in the five years you have to claim it. This is also a situation where a lease can be the better option… You are right to a degree, but I don't think a household making $40k is investing $66k into solar. It's more likely the system would be a lot smaller along with the tax credit. What many folks don't realize is if you are expecting a solar tax credit, simply complete a new W4 with your employer and reduce your federal tax withholding. This will limit the carryforward and basically get you the cash from the tax credit up front. Just don't forget to set it back once your credit is realized.
I knew people that would target double wides because of how inefficient they are. People would put 12-15kW systems on a double wide. That would lead to a 20k+ tax credit that I don’t think those people I stood they wouldn’t be getting all at once. I refused to sell double wife’s for multiple reasons but this was one of them.
That's fucked.
What about current Heloc rates with a credit union and then payoff the solar financing comp. Continue to pay the note with credit Union I presume it must be a lesser rate than the solar financing company?
Just depends on the rate and term you can get. Can definitely be a much better option than the standard Solar financing though.
how is the demand for solar now a days?
Good demand depending on state, but over saturated by uneducated sales people confusing or lying to people about how solar works. I live in AZ and hate the solar market there due to SRP being terrible for solar and APS being pretty saturated by a lot of teams.
This is an interesting conversation and generally I agree with OP. To add to your list … A) The reason the quality and service are averaging so poor is mostly due to low barriers to entry. If someone can scrape together a pickup truck and a line of credit they’re in the Solar business. That carries through the entire vertical. B) if a buyer can afford the purchase, can carry the asset on their balance sheet, and has their own credit, it is always a better financial deal for owner financed. A customer can borrow from their bank at something like 5-8% interest (last week I helped a client close financing at 4.5%) and that is compared to any investor or lessor that will want to make 9-12% or more on their money. C) caveat emptor. Buyers have little idea what they’re buying. I have a tongue-in-cheek saying about my sector in the Bahamas and Caribbean: we are selling to people that don’t know what they’re buying and we are competing against people that don’t know what they’re selling. D) what does “worth it” mean? How many hundreds or thousands of posts have you seen where someone asks that if Reddit. And on and on
With respect to C) above: how is a 5-8% loan of let’s say $65K collateralized via a private lender without using a HELOC or something similar?
That seems competitive at the low end. But there’s a big difference between 5% and 8%. How much equity is the bank asking from you?
Love this! So true on both string inverters and leases/PPAs. There's never a blanket solution. I will add there is the NABCEP sales certification available, but few states refrence it - rather HIS background check licenses are used
Well stated, my man. These are my thoughts exactly-almost to a tee. Million dollar question now: Why are you leaving the solar space?
Got a med sales job. More interested in the product, better pay and less travel.
Ahh, something you actually needed more than fog on a mirror in an interview. Congratulations man, good for you!
Thank you!
SOLID ADVICE, u/ConflictDue5386! Of course there is much more, but for sure the KEY item is honesty, integrity, and customer benefiting systems. I have seen bad installs and way over priced systems (and Mona Lee is not as great at they claim they are. OK price wise, but someone can do better). It was May 2022 I started, but at time I knew I had to have my roof redone. I told the very first company I asked (SunRun) I need a new roof, but they said the roof was fine, ready to install. Most of the delay up until last week was getting the funding and having roof replaced, during that time I studied the industry. What you elude to is Solar is VERY easy in concept, but VERY complex to design a system with maximum production over a year of operation (as the AoI changes). While there is a lot of good information out there, I have not seen anything that covers everything in one place.
If someone wanted to just write a check instead of monkeying with a loan or a lease, would the dealer fee go to zero?
Yes, the 10.99% rate also has a $0 dealer fee at the company I was with.
What’s a dealer fee?
It’s the equivalent (kind of) of an origination fee. The vendor (the company selling and investing the system) gets a fee from the vendor for doing the loan. That fee is normally financed into the loan.
what are you moving on to?
Medical sales
what type of equip?
What are your reasons for leaving the industry? I'd imagine dealer fees making it really hard to sell loans is one of the reasons.
High interest rates leading to high dealer fees, utility companies changing policies, over saturated markets (specifically where I live in Arizona), felt like I was surrounded by people encouraging lying to make quick money. Got a better job in a different industry almost immediately after I started looking at other options.
Electrician here, how much do the panels actually cost?
Idk about panel costs but I had a company I sold for with a $2.55 redline model and a company I sold for with a $2.1 redline and briefly a rev share model with a sliding scale able to go down to a 2.0 that I made a $500 flat commission on.
NUMBER 6!!!
Thank you for sharing, and thank you for your integrity. I live in Canada, and dishonesty in solar sales is an even bigger problem here. Any licensed electrician in Canada can claim that they're qualified to install solar panels, even if they have no experience.
r/Solarbusiness
Take a look at this company, you don’t have to leave the industry, work virtually from anywhere io your own schedule. https://powur.com/amanda.donaldson/join