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Sale of a third party solar system

  • 1.  Sale of a third party solar system

    Posted 07-06-2021 09:42 AM
    I am the owner of a 26 KW pv system on a grocery coop, which I've owned for 5.5 years. I'm nearing the end of the depreciation period and i'm interested in assessing how much the system may be worth if I put it up for sale, either to the coop or others.

    Has any one else sold a third party owned system or know of a published analysis?

    I'm just starting my research on this question.

    Thanks ,

    Don Wichert
    ASES Life Member




    Sent from my U.S.Cellular© Smartphone



  • 2.  RE: Sale of a third party solar system

    Posted 07-07-2021 09:33 AM
    Just out of curiosity, why selling? Panels have a useful production period of well beyond 30 years. I get you are approaching the end of depreciation, but is that the only benefit you reap (depreciation) and was that the major impetuous for buying in the first place?
    Used solar panels and inverters have a low re-sale value compared to the long term production payoffs, at least in states that have net-metering...??..

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    william fitch
    Owner
    www.WeAreSolar.com
    fcfcfc@ptd.net
    ------------------------------



  • 3.  RE: Sale of a third party solar system

    Posted 07-07-2021 10:22 PM
    Thanks William
    Like many investment decisions, owning a third party solar system consisted of many reasons to move ahead or not. Due to a personal unique financial situation occurring at the same time the system development became available, it was a time to act. The expected decent economic return made it easier to push the envelope on what an individual could do to install clean energy.  My house is surrounded by trees, so this system makes my home's electricity use carbon negative.  My aim now is to explore the ownership options, to evaluate the pros and cons for all involved.
    Don



    Sent from my U.S.Cellular© Smartphone






  • 4.  RE: Sale of a third party solar system

    Posted 07-08-2021 09:32 AM
    Let's not forget the mounting system, overhead and mark-up, along with the labor and engineering, that brings the price to an installed cost of $2.80/W.  I agree with Bill that you still have a quarter century of warrantied production plus the end of life generation of your system, which likely will increase in value as the cost of electricity increases throughout its useful life.  Without the 26-30% Fed Tax credit and depreciation write=offs, this system is worth less than 50% of its original dollar value, yet has 85% of its useful life electric supply value in it.







  • 5.  RE: Sale of a third party solar system

    Posted 07-08-2021 09:35 AM
    I agree.  Solar PV has value as long as the system is generating substantially as much as it originally did, simply because of avoided costs.  And even if it isn't generating as much, there are paths to upgrading panels to newer, more efficient ones.  Unless a new inverter is needed the cost ought not be anywhere like it was for the first installation.  

    An accounting calculation which suggests selling panels because of end of depreciation lifetime has something wrong with it, meaning it's disconnected from reality and a proper valuation of said panels.

    ------------------------------
    Jan Galkowski
    retired; studying quantitative ecology of mosses
    Westwood MA
    bayesianlogic.1@gmail.com
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  • 6.  RE: Sale of a third party solar system

    Posted 07-07-2021 10:50 AM
    As someone who owns a roof-mounted system on their home, I don't understand how a sale of a "third party system" would work, or even what that sort of ownership means.  Can you explain?

    TIA and apologies for what may be obvious to most...  - Mike

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    Mike Curran
    Retired from (dare I say it?) Fossil Plant Mgt.
    joacchim57@gmail.com
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  • 7.  RE: Sale of a third party solar system

    Posted 07-08-2021 05:59 AM
    Hi Mike

    My house is covered by trees and my electricity draw is very low.  I worked with Solar Legacy Coop to install a solar PV system on the roof of a local grocery Coop that had perfect solar access, a large electricity load, and a desire to reduce their carbon imprint on behalf of their members. So we did a request for proposals and selected a local solar dealer for the installation. I own the system and was eligible for the solar tax and accelerated depreciation credits. It was complicated for the Grocery Coop to access the tax credits. So I bill the grocery Coop for the REC's that the system produces on a quarterly basis. Voila, a win win for all involved so far.
    Don




    Sent from my U.S.Cellular© Smartphone






  • 8.  RE: Sale of a third party solar system

    Posted 07-09-2021 09:40 AM
    If you home have a lot of tree shade, (Passive Solar) you could do a pole or ground mount systems in full Sun a short way from your home and the shade. I did that and had the city make a special requirement to allow a pole mount system. They allow swimming pole and big bar be ques so why not solar PV.
    Solar on poles


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    Jim Stack
    President
    Phoenix EAA
    solarstacks@gmail.com
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  • 9.  RE: Sale of a third party solar system

    Posted 07-10-2021 01:22 PM

    Thank you Jim. Good comments for many homes, but not mine, which is an 110 year old home in a high density urban neighborhood, with narrow lots. I have 5 large dicidious trees on the south, east, and west sides and three large spruce on the north. It's a cool place on hot days. For people with homes like mine, with poor solar access, or the millions living in high rise apartments or condos, third party ownership or community solar are viable options to support solar and reduce carbon. Besides my third party ownership, I am a member of my utilities community solar program.  I try to do what I can with the opportunities and resources I have.  Don


    Sent from my U.S.Cellular© Smartphone






  • 10.  RE: Sale of a third party solar system

    Posted 07-07-2021 04:51 PM
    Here in Colorado, the typical price for a PV system is running about $2.80/watt.  This breaks down to $0.70/watt for panels, $0.33/watt for inverters, leaving $1.77/watt for permitting/paperwork/design/inspection/labor.

    From this you can see that the majority of the system cost is not the hardware but the soft costs.  The portion of your original costs (more than 60%!) have no value for a future owner: they will have to pay again the (new) design costs, paperwork/inspections etc associated with the system re-installation, and of course the labor to install the panels at their new location.

    This is a weakness of how solar is bought/sold in the US today, somewhat analogous to how cumbersome it used to be to get a house mortage.  The internet in the form of (for example) Rocket Mortgage greatly streamlined the costs/time of getting a mortgage: the same thing is need for the solar industry to reduce the amount of stiction involved in acquisition.  This would have to include integration with the local permitting authorities, which is probably why no one has tried to tackle this problem yet.

    Wouldn't it be nice to go to a web page, type in a few details, electronic orders go out to contractor/local permitting department, crew shows up next day for installation, simple sign-off without inspection.  Badda Bing!

    dream on.

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    Bruce Bohannan
    Engineering Fellow
    Lafayette CO
    bruce@bohannan.org
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  • 11.  RE: Sale of a third party solar system

    Posted 07-07-2021 09:57 PM
    Thanks Bruce.  I would only consider selling the system in it's current location, for all the reasons you mentioned. The most likely buyer will be the food Coop or Solar Legacy Coop, the group I worked with to buy and finance the system.  

    Don



    Sent from my U.S.Cellular© Smartphone