Buying a home with a solar lease agreement?

[Steven Straughn]

I am in escrow on a property that has a solar lease agreement in place with a company called SunRun. The property was foreclosed, so the agreement appears to be null and void, though we have the option of assuming the contract if we want to. We plan to be in the home for 2-3 while remodeling it.

Here how it works. SunRun owns and maintains the solar equipment, which produces and average of 650 kWh per month, and we would be obligated to purchase ALL of the power [u]produced by the system at $.25/kWh. Our payments to SunRun would have nothing to do with the amount of energy the home consumes. Compared to the tiered rate structure of SDG&E, the breakeven point is at around 850 kWh per month. The company claims that they average historical usage of this home is around 1000 kWh/mo. I don't plan to use that much while living in the home, but maybe a potential buyer would, and would like to have the system in place, especially considering that SDGE's rates will likely increase over the next few years.

The main problem is that this contract is very difficult to get out of under normal circumstances. If we assume the contract and our potential buyer does not want the system, we would have to pay to have the system removed and roof repaired, or buyout the equipment at a cost of around $20k. As it is now, due to the foreclosure, SunRun has no recourse but to remove the equipment if we don't want to be in contract with them.

Also, this company does not have a great reputation. Plenty of horror stories pop up when you search their name online.

I'd appreciate any thoughts or advice on this issue.

[Steven Straughn]

Resolution: After 7 months of negotiations and free solar power, we reached an agreement with the solar company. They final got serious with their offers, and we opted to prepay the balance of the guaranteed production for $5,000, which comes out to $.06/kWh. They gave us the option to buy the equipment outright for $6,000, but then we would have to deal with inverter replacement (4-6 years down the road), and any other maintenance that may be needed. If we sell, our buyer would have no financial obligation to the company.