Hi all, big time fan (and high school economics teacher) so I've really gotten a lot of use out of the posts and information here over the year. Wondering if anyone would care to share their opinion/advice on an opportunity I currently have:
A local solar company (Vermont) is currently offering property owners with excellent solar potential $7500 for a 25 year land lease and PPA to build 3 solar trackers on my land. I would also receive 10% off my utility costs for the length of the agreement.
This alone doesn't seem like a significant enough financial incentive to agree to this, but after 5 years we have the opportunity to buy-out the agreement at 55% the cost of the sticker price (~$53,000). This involves either forming an LLC, or buying the one that was created by the original investor who funded the project. At that point, the system becomes ours, and we become the "investor" with our LLC selling the electricity generated on the open market (as well as too ourselves for effectively "free" electricity). Because this becomes a business venture, we can depreciate the cost of the equipment (i.e. the trackers) against our tax liability for the first 5 years). In general, the trackers would general $6k in electricity per year, obviously increasing with utility rate increases.
Am I crazy for considering this? $7500 and 10% off electricty costs up front, spend ~$53,000 in 5 years to purchase the system (in part using the original $7,500 and saving for it instead of taking our a loan) and sell power over the remaining 20 or so years of the systems life. I would net something like $55,000 (most of that coming in the last few years of course) if I lived at my house for the next 25 years. We are young and with 2 small kids so generally plan to be here around 20 or so years but you never know...
If for some reason we did sell before we bought out the buyer would have to assume the PPA (and then they would have the buyout option as well). Would this be a major turnoff for a buyer? Once we buyout the system, we could simply include the cost into the purchase price of the house if we sold, but does adding $35k or $45k onto a $400,000 house for a solar system that will generate an income make it more appealing or less? I have to think that future home buyers would appreciate turnkey solar.
And of course, am I stupid for doing this in the middle of a potential Democratic wave which will likely come with extended solar tax credits and incentives? We've considered doing a smaller single tracker or rooftop system for our house, but I like the idea of supporting solar and earning some additional income. Am I being too greedy here?
Really appreciate any insight, considerations, or thoughts, thank you!
Submitted November 02, 2020 at 09:45PM by danton49 https://ift.tt/34Og94d
