{"id":6403,"date":"2015-07-28T11:21:00","date_gmt":"2015-07-28T11:21:00","guid":{"rendered":"https:\/\/www.portal.solar.com\/learn\/solarcity-mypower-review-part-2\/"},"modified":"2019-11-14T00:30:25","modified_gmt":"2019-11-14T00:30:25","slug":"solarcity-mypower-review-part-2","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/solarcity-mypower-review-part-2\/","title":{"rendered":"SolarCity MyPower Review Part 2"},"content":{"rendered":"

 <\/p>\n

In Part 2 we will peel back some more layers of the MyPower package by focusing on the financing.\u00a0Make sure you have read about the product in Part 1 of the review if you haven\u2019t yet.<\/a><\/p>\n

In 2015, the solar industry is shifting away from the unfairly priced lease\/PPA model to loan financing. MyPower does indeed provide loan financing, but you get the impression it looks a lot like a Power Purchase Agreement (PPA). Reading through their 34-page contract will not clear this up for you (a concise solar contract should cover everything in 3\u20135 pages \u2013 this contract takes fine-print to the next level). Payments are made to SolarCity based off system production at an \u201cequivalent rate per kWh\u201d that increases 2.9% each year. These variable payments (due to being based off of production) are applied to the loan as any mortgage payment would be. The variable payment structure is set up with the goal of having the system completely paid off after 30 years. However, if the solar system doesn\u2019t hit the \u201cExpected Annual Production\u201d, which the monthly payments are based on, it is possible to still owe thousands of dollars at the end of 30 years. The power production guarantee is considerably lower than the \u201cExpected Annual Production\u201d, making this an entirely possible scenario. The contract has a clause called \u201cVariance of Loan Term\u201d which discloses this possibility. It explains that in the event there is a remaining balance at the end of the Loan Term, MyPower will provide a refinance option for the outstanding balance.<\/p>\n

The financing has another ingeniously deceptive twist. By charging you a low \u201cequivalent rate per kWh\u201d upfront (and then increase it by 2.9% each year), most of your initial payments will go toward interest. As the rate increases over the years, you start paying off more of the principal. Loan structures are typically set up this way, to pay more interest up front, but by increasing the payments with an escalator, it completely skews the payback dynamic. The customer ends up paying a much larger amount toward interest and ultimately thousands more than would have been paid with a conventional flat monthly-payment financing option. With this payment structure, the effective APR ends up being almost a full percent more than the 30-year stated rate.<\/p>\n

MyPower Review Conclusion<\/strong><\/span><\/p>\n

SolarCity is a company with a very strong brand in the solar industry. They offer an industry leading warranty, but their prices are well above the market, and the MyPower financing option is structured to keep homeowners making ever-increasing payments for three decades \u2013 and sometimes beyond. The numbers speak for themselves:<\/p>\n

6.5kW solar system<\/strong><\/span><\/p>\n

SolarCity MyPower System Cost: $33,150<\/span><\/p>\n

Lifetime payments (tax credit used): ~$50,550<\/span> (30 year loan)<\/em><\/p>\n

Avg. Cost Per kWh: 17.3 cents<\/span> (30 years)<\/em><\/p>\n

Avg. Payments: $140<\/span> (30 years)<\/em><\/p>\n

Typical Installer System Cost: $23,400<\/span><\/p>\n

Lifetime payments (tax credit used): ~$22,310<\/span> (12 year loan)<\/em><\/p>\n

Avg. Cost Per kWh: 9.3 cents<\/span> (25 years)<\/em><\/p>\n

Avg. Payments: $155<\/span> (12 years)<\/em><\/p>\n

It\u2019s hard to justify paying more than double for a longer warranty.\u00a0For more insights on going solar, check out the rest of the Solar.com blog here.<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

  In Part 2 we will peel back some more layers of the MyPower package by focusing on the financing.\u00a0Make sure you have read about the product in Part 1…<\/p>\n","protected":false},"author":38,"featured_media":6554,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[86],"tags":[],"yoast_head":"\nSolarCity MyPower Review Part 2 | Solar.com<\/title>\n<meta name=\"description\" content=\"MyPower provides financing, but it looks a lot like a PPA. 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