Solar

[Roc A Bee]

We are building a house in CA, so solar is required. Our options are to add it into the sale price and mortgage or sign a Power Purchase Agreement (PPA) which is basically means I’ll have a monthly payment for 20-30 years? I haven’t seen the terms yet.

The easy thing is to sign the PPA because we won’t have to come up with money now. But is the right thing to add it to the sale price of the house and come up with more cash (we are putting 10% down)?

[formerlyak]

Probably? I know if you are in a contract for solar and you sell, the seller can ask you to pay the remainder of the contract. You can say no, of course, but it may limit your buyers who don’t want to take over your solar contract.

[turboteal]

Not sure about your scenario/California related info. We are adding solar to our house right now though and for the rest of this year and next you can get a federal tax credit for 26% of the total cost of the system including install. If you add it in to the house cost up front hopefully you would also qualify for that credit for next year's taxes? I am also planning to use that credit to cover the taxes from selling some stock in our non retirement investments (and selling the stock to help pay for the system in cash).

[macmars45]

If you did the PPA now could you pay it off early?

[Roc A Bee]

Aug 9, 2021 15:12:32 GMT -5 macmars45 said:

If you did the PPA now could you pay it off early?

I don’t think so. They mentioned I can’t switch from a PPA to a purchase.

[gt7301b]

I would just roll it into the mortgage. I can't imagine that the PPA agreements would give you a better interest rate than your mortgage right now.

Here is an article from Clark Howard that talks about it:
clark.com/homes-real-estate/solar-panel-installation-guide/

[ohgillian]

I agree about rolling it into the mortgage. It's basically a cost of the house purchase/construction, right? Plus it seems simpler to have one bill rather than 2, and the older I get, the more "simplifying the finances" becomes a priority for me,

[mommin]

I’d roll it in to the cost. I just sold in CA last week and owning our solar was a HUGE benefit. If you do a PPA and if you ever sell the buyer has to qualify to assume the PPA and it can slow down or make a sale more difficult. Additionally, owning our solar increased our property value. Having solar on a PPA will not increase the property value and some buyers, when we end up in a buyers market again, may not be interested in someone else’s PPA. Buyers are pretty much always thrilled to get an owned system.

[Roc A Bee]

Thank you alll! We decided to roll it into the mortgage. I