This is Part 4 of a multi-part series about my attempt to install solar panels on my house. For the previous installation, CLICK THIS LINK. For the next installation, CLICK THIS LINK. To start at the beginning, CLICK THIS LINK. Thanks for reading!
Running for the Sun
The argument California utility companies have made, justifying the drastic reduction in payment for power generated by solar owners, is that there are too many solar owners these days. Supposedly, solar owners are overwhelming the electric grid with power generated during the day. This glut of electricity lowers the value of the electricity. Or so they say.
I don’t know how true that is, as there is some debate about it. But I do wonder why our electricity bill keeps going up, if we have such a glut of electricity. That defies the law of supply and demand. So something doesn’t make sense.
Another thing that doesn’t make sense is California’s new mandate requiring solar panels on newly built homes. Since 2020, any new home built in California must be equipped with a solar array. If they’re so worried about the glut of solar energy, why would they have a law like this that just contributes to the glut?
Developers don’t like the added expense of installing solar panels, so they often subcontract with third-party solar companies, such as Sunrun, to install panels for them. Sunrun charges nothing upfront to install solar arrays. Rather, they lease their systems out to homeowners. So, the home builder pays nothing, but the new homeowner gets stuck with a monthly lease payment. But they also receive a reduction in their electric bill, from the power generated by the panels they’re leasing.
This is highly profitable for Sunrun. For one thing, they get the 30% federal tax credit, because they own the system. Meanwhile, the homeowner is on the hook for a long-term lease. Imagine buying a home, only to find out you’ve assumed a lease obligation.
In effect, the federal government is subsidizing large solar companies, helping them to ensnare new homebuyers into expensive leases.
Remember, with California’s new NEM 3.0 rules, new solar owners will be paid slightly above the wholesale price for the electricity they sell to the utility companies. But they must pay full retail, or about five times as much, for what they buy back when their panels aren’t producing.
In addition, many new home buyers will have to pay a lease on their solar panels. The end result is that with NEM 3.0, plus the lease payments, there’s a good chance they’ll pay more for their electricity than those who don’t have solar panels.
Sunrun is what is known as a TPO solar company. That stands for “Third-Party Owned,” and means that the solar panels they install on a house are not owned by the homeowner, but rather by a third party, such as Sunrun. The homeowner just leases them.
I have a niece who contracted with a TPO company for solar panels. Her overall cost for electricity, factoring in her monthly payment on her 30-year lease, has gone down modestly, from about $225 per month to about $200 per month. And that’s under NEM 2.0. If she was under NEM 3.0, I think her overall cost would have gone up.
When I was looking for a solar company to install panels, I checked out each company’s Yelp ratings. Sunrun had the lowest ratings of all, in my area, with 2 stars out of 5. And to think, Sunrun is the largest solar installer in California. They also operate in 22 other states. With their domination of the market, coupled with their low ratings, I wonder how many unhappy solar customers we’ll soon have in the state of California.
I also wonder how many citizens will feel resentful that they had to assume a long-term lease when buying a new home, that makes their electricity more expensive than if they had no solar panels at all, to pay a lease on.
The state government of California may have become like Icarus. They’ve made a run at the Sun, trying to force solar power on the people of California, rather than stick with the lucrative incentives of NEM 2.0. And perhaps they’ve now come too close to the Sun. The unhappiness of citizens suffering from The Solar Burn of expensive solar leases, could lead to a political meltdown in the future. So get ready, state lawmakers. For you may soon be experiencing The Solar Burn, yourselves.