Energy

The Nissan Leaf and SolarCity – Renewable Journal for 6/8/2014

On June 7, one Colorado family took a leap into unfamiliar waters with both solar panels and a Nissan Leaf.

NissanLeafBAFor more posts in this series, please click here.

Yesterday morning, my wife and I bought a new Nissan Leaf. And yesterday afternoon, after careful review of the terms, we signed a solar power lease contract with SolarCity.

Talk about diving into renewable energy head first. What the hell are we – I – doing?

Here’s the last few weeks in a nutshell. My wife and I have been chatting about replacing my 2003 Subaru Outback Legacy (affectionately named Dogbert, for the plush toy I kept on my dash – “Out! Out! You demons of stupidity!”) for at least a year now, but given the other car in the house is a standard Toyota Sienna, I was reluctant to give up our only all-wheel drive vehicle in favor of a fun commute car. And even though the Outback was at nearly 120k miles, it still drove fine and had enough life left in it that I didn’t want to take on the additional debt of a new car.

So I’d been going round and round between two possible options for when we finally replaced my Subaru:

  • Option 1: Another all-wheel drive car, but smaller with presumably better gas mileage.
  • Option 2: A “pure commute car” with awesome mileage, like a TDI diesel, hybrid, or electric.

Then I decided to stop in at a SolarCity booth at a local farmer’s market. I talked to the nice saleswoman about SolarCity and liked what I heard well enough (leased panels, $0 down, no maintenance costs, a 30% savings on electricity at turn-on and getting better from there, and so on) that my wife and I made an appointment for the following week. What does it hurt to talk, right?

After reviewing the proposal a couple of days later, we decided that the solar idea looked good enough that we wanted to pursue putting solar panels on the roof. And that’s when my wife said several fateful words:

“Brian, if we’re going to put solar on the roof, you should probably decide whether you’re getting an electric car or not first.”

Crap. I hate car shopping, and I’d been waffling on the AWD/great gas mileage decision for months. So I took some time, narrowed the list of dozens of AWD, hybrid, and electric vehicles down to four cars, and then went out for test drives. First stop – the Nissan dealer to drive a Leaf.

We were met at the dealer by a salesman who was still in the process of learning the vehicles on the lot, and he was unable to answer most of my questions regarding the Leaf. But he passed us off to the local Leaf expert, a nice Brit who drives a Leaf himself and who, when he discovered that I was an electrical engineer, grinned about being able to geek me out with details.

When all was said and done, we drove off the lot to go explore two Volkswagen Jettas (the TDI and hybrid) and a Subaru Impreza (that was woefully underpowered compared to my 2003 Outback Legacy). By the end of the weekend, I’d narrowed it down to two vehicles – the Leaf and the Jetta TDI. And by mid-week, my wife and I had decided that the Leaf made the most sense for how I was going to be using the vehicle.

In the process of deciding between the Jetta TDI and the Leaf, I calculated the annual cost of operation of both vehicles. The Leaf’s cost was about half that of the TDI and about 2/3rds of my Outback. When I figured up the new electricity usage, I realized that the Leaf would add 40-50% to my electric bill each month. And the SolarCity system I was looking at (but had not yet signed, pending the decision on the Leaf) would be too small to power the Leaf too.

So I contacted the SolarCity rep again, asked her to increase the size of the system, and she sent back a proposal that, due to limits set by my utility (Xcel), wouldn’t quite cover the full cost of charging the Leaf. But it would offset the vast majority of it, and still save us a ton of money every month.

So yesterday I traded in Dogbert (and the Leaf has become Dogbert 2.0) for a 2014 Nissan Leaf. And we’ve started the process of getting solar panels on the roof.

And I decided that this was such a major change for me and my family that I wanted to document the journey, in all its glorious strangeness, for better and for worse. Feel free to follow along.

[Update: I apparently failed to complete a sentence in the paragraph starting with “In the process of…” and Sam did his best to finish it for me. I’ve revised it to match my original thinking because, for some reason, he’s neither telepathic nor precognitive.]

12 replies »

  1. Given your level of expertise as an engineer with a keen understanding of environmental issues, Brian, I’m looking forward to following your journey and finding out more about both transportation and home energy options based on your discoveries.

    And congrats for such a bold move (I mean doing both at once). 🙂

  2. I look forward to your future posts… will be really interesting to see if you get anywhere near the goal of fully charging the Leaf from the solar contribution. A couple of questions that I hope you can address: what part of CO do you live, and what is the cost per KWH from the grid in your area? Thansk and congrats on your new toys!

  3. Hey Brian,

    I’ve did some data crunching since putting my Solar City panels up 1 1/2 years ago and you might be interested in what I’ve got. Let me know and I’ll go over it with you.

  4. Congratulations on your Leaf. I’ve been driving one for 3 years and have solar panels. It’s been a great car; my total commute is 45 miles/day, well within the range for the car. Another benefit is no oil changes; just come in every 7500 miles for tire rotation.

  5. Way to go, Brian! We went solar in 2002 nd shortly after bought our first electric car, a Toyota RAV4 EV. For over 12 years, we’ve been powering our home and car on sunlight. It feel really good and we’ve saved literally thousands of dollars. The solar paid for itself years ago, so for the rest of our lives, we get free energy to power our home and car.

    If you have the roof for it, you are losing money every day you don’t go solar.

  6. I can’t tell whether or not you have signed a contract for a solar lease or PPA at this point so on the chance that you haven’t, here’s some points that you should consider before making your decision.

    First of all, if you are considering a $0 down solar lease or PPA then hopefully you are aware that contracts of this type typically if not always include a payment escalator that will raise your monthly payments by up to 2.9% per year, every year for 20 years. Should your utility company ever decide or is mandated to either lower or flatten their rates, you could end up paying more for your electricity than had you not decided to lease a system to begin with.

    Second, add up your lease/PPA payments over the next 20 years and you’ll typically find that you’ll be paying more than twice as much for a rented system than you could have paid, if you purchase your system outright instead. An average sized 4.75 kW system today sells for about $10,400 after applying the 30% federal tax credit. A typical leased system will cost you about $28,000 after applying the 30% federal tax credit and that’s without considering the annual 2.9% payment escalator.

    You’ll pay so much more for your system when compared to an outright purchase, that it will actually be you who will be paying for your own repairs, insurance and monitoring, not the leasing company.

    Third, if you need $0 down financing, then a much better option would be a $0 down FHA solar loan with tax deductible interest. Solar leases and PPAs do not offer tax deductible interest. With a $0 down FHA solar loan, you don’t need any equity in your home and the credit score requirement is typically only 650.

    Fourth, you may have trouble selling your home down the road from an aesthetics perspective when you consider that you’ll be stuck with the same aging solar system on your roof for the full 20 year term of your lease/PPA contract with no way to upgrade the system unless you pay your system off in full. With a purchased system, you can sell your system any time you wish and take the proceeds from the sale and upgrade your system to the latest technology if you wish. With a leased system, you do not own the system and can never sell the system, even after paying off your lease.

    In addition, what home buyer will want to purchase your home and assume your lease/PPA payments, when they can buy a brand new system and keep the 30% federal tax credit for thousands, even tens of thousands of dollars less than your remaining lease payments.

    Fifth, are you aware that with most lease contracts, if you are more than 10 days late on any payment over the course of your 20 year agreement, the leasing company can come and remove the system, charge you for the removal and sue you to collect the balance that is owed on your lease contract. Read the contract under the heading of “default” and you’ll find the details. When was the last time you were only 10 days late on your electric bill and faced the threat of having your electrical service removed while facing a lawsuit?

    There are many more reasons why you should carefully consider signing that lease/PPA agreement. These are but the tip of the iceberg. With prices on a purchased system as low as they are today, (under $2.30 per watt installed after the 30% federal tax credit), in most cases it makes absolutely no sense to sign a 20 year solar lease/PPA contract in today’s market.

    • Ray, you’re hardly an unbiased source of information. According to your public Facebook profile, you worked at Solar Home, a website devoted to selling solar panels to homeowners, and thus companies like SolarCity who lease panels are your competitors. That doesn’t mean you’re necessarily wrong, but it does mean that I can’t take what you say at face value any more than I could say what the SolarCity salesperson told me at face value.

      I was aware that the lease I signed had an escalator. At this point, however, I’m firmly convinced that the escalator I’m getting with SolarCity is significantly below what I would be paying with Xcel, especially down the line as coal and natural gas become more expensive. Frankly, I find the idea that Xcel would ever be forced to reduce their rate increases below my escalator percentage absurd, and so this is a risk my wife and I are willing to take.

      My wife did the numbers on how much we’ll be paying over the course of the 20 year lease vs. an equivalent system purchased, and the numbers are within a 10% of each other – essentially a wash. And the cheapest solar loan we could have got from FHA was over 7%, so you’re 0% interest number is either out of date or misleading.

      I live in a neighborhood where solar is actually a selling point, and so while I’m certain there are potential buyers who won’t want to assume a solar lease, there will also be plenty of potential buyers who are willing to do so, especially if cost of utility-provided electricity increases dramatically as I’m certain it will (carbon trading/taxation is inevitable, in my opinion).

      You seem to be operating on the assumption that there will still be major federal tax incentives by the time my wife and I sell our home. While that may be true for the next 5, maybe 10 years, after that I expect that the price of solar will be cheap enough that federal tax incentives will no longer be necessary. Also, there is a decent chance that conservatives will regain control of the federal government in the next 5-10 years, so even if solar costs aren’t cheaper, incentives may be killed off for political reasons. Either way, I expect solar subsidies to be dramatically smaller by the time we plan to sell our home, if there are any subsides at all.

      If we come to regret the decision, I’ll say so and discuss why in the course of this series. But at this point, our research into the benefits and risks of various solar options indicated that a leased solar system makes the most sense for us. Someone else might make a different decision based on their personal situation, and that’s fine.

  7. “We were met at the dealer by a salesman who was still in the process of learning the vehicles on the lot, and he was unable to answer most of my questions regarding the Leaf.”

    You are so nice to give them the benefit of the doubt 😉
    Once you’ve talked to some other EV owners I’m sure you’ll find that your experience is universal and that the vast majority of sales-people don’t know anything about the electric vehicles that they are selling. This is a weakness in the system that has hampered the sales of EVs – and one reason Tesla doesn’t allow dealerships (other than their own) to sell their cars.

    I’m enjoying reading your blog – I’ve had my Leaf for a couple of years now and still love it. Now days, I’m just amazed at how few people are driving electric…

    • Well, the guy said he’d started two weeks before, and he seemed new in general, not just to the Leaf. That said, there was an expert on the Leaf, and he’s who we ultimately bought the car from.

  8. Brian, I have owned a leaf for about 9 months now and love it. Solarcity just came to my area about a month ago and I will likely do their full prepay ppa. I have weighed the pros and cons of owning and leasing and also concluded that a lease is the way to go. When you include the insurance policy, performance guarantee, full service coverage for the entire 20 years, and the price, I found it to be a no brainer. As for mr Boggs claims ( a seemingly very active self serving commentor on other sites besides this one), I have found the complete opposite of what he said about the costs to be true. The quotes I’ve seen for a purchase (installed) are almost exactly double the price of a 20 year full pre pay ppa lease with solar city. I look forward to seeing your updates!