So there is quite a buzz about the company that is giving away free solar panels for homes here in the Las Vegas valley. I wanted to be one of the “cool kids” and jump on the bandwagon before it was too late! So I called and got a phone consultation set up.
The consultation was very salesy and I felt like I was being sold through “fear of loss” which is a sales tactic I disdain and that is so not in my home selling arsenal – unless we have low inventory. Regardless & moving on with the background…..
I don’t know if anyone can remember the Enron scandal back in 2000 where private companies were manipulating electrical transmissions in the western US states? Long story short, it pretty much wrecked the credit ratings in much of the utilities and the damage & wreckage was left to be paid for by the electric consumer in these states. Our electric utility costs are high.
I have been researching solar energy for my personal residence for about a decade now and was just about to pull the trigger on a home equity loan to purchase a system. Recapture was about 10 years back then. It’s our forever house so 10 years is not much all things being considered. Then the Las Vegas real estate market crashes and we have no equity in our home to finance the system. Oh well. Choices now are pay with cash or wait. We ended up waiting due to a myriad of economic forces beyond our control.
Fast forward to July 2014 and that sales pitch for a free solar panel system. On the surface it seems like a great deal to save approximately 17% right now on our electric bill. We were told via sales pitch we are paying 13 cents per KWH but my bill indicates it is more like 12 cents per KWH. We were also told via sales pitch that our new rate (locked in by 20 year contract) would be 9 cents per KWH but when I get the contract it is really 9.90 cents per KWH which, come on, is really 10 cents per KWH and those fees (locked in by 20 year contract) are also subject to an increase every year. Conveniently they rounded up with what I am paying Nevada Energy and they rounded down what we would pay them.
This brings me to the next point – the 20 year contract. We were being told that this company is just acting like a utility – such as our current utility Nevada Energy HOWEVER we are locked into a 20 year contract to pay that price (and subject to increases!) I had two objections to that: the first being I am not locked into a contract with Nevada Energy and the second being what if our rates decline?
Sales agent had to argue with me that I AM locked into a 20 year contract with Nevada Energy which is complete shenanigans. I may be “stuck” with them but not locked into a contract.
Then came the shiny “I can show you a graph of how energy rates have increased over the last 15 years”. Um yea I can also show you a graph how Las Vegas homes appreciated over 15 years and then came a pretty sharp & painful decline. Then a lot of people were “stuck” in a home they couldn’t sell because it had negative equity.
By signing this 20 year contract, you are basically speculating that energy prices will continue to increase for the next 20 years. To me, saving a meager 17% is not enough to sell myself down the river for 20 years. You have to consider all things going on – new technology, energy tax rebates for green power, supposedly 50,000 homes slated for install of this fab new program or utility company entering the market. That’s a large number of homes.
I was told by the salesperson that when people exit the utility grid that our energy prices will skyrocket. But simple laws of supply and demand do not add up with that statement. Then again it is a utility so who knows.
Back to the sales pitch, the salesperson was looking at my roof via google maps and estimating how much of my roof would be covered. Granted, this wasn’t a real onsite evaluation. Pretty much my entire roof would be covered minus some vents and things that can’t be covered. Hmmm, weird and another red flag. Someone that has been researching this for a decade, such as myself, understands that we don’t have net metering in Nevada (selling power back to the grid) last I checked. I know exactly how much of my roof needs to be covered to not be producing “too much” electricity and it doesn’t even come to covering my entire roof. In essence, if you were purchasing a system (and they are expensive,) you want to purchase about what is appropriate or what will supplement about 90% of your electric use. You don’t want to pay for overkill because you get NOTHING in return for overkill.
Without delving further, obviously this program is overkill which during this phone call, it made no sense to me knowing what I knew about net metering at that point. So I tell them to send me the contract for attorney review and get into my pool to discuss further with my husband.
I then get out of the pool and lay in bed with my computer to do some research so I can effectively “sleep on this.” The salesperson did mention how a certain gazillionaire from my hometown of Omaha bought our utility (which I knew) and how he was going to raise rates and how he partnered up with their company. This part made no sense so I googled the Oracle’s name + the name of the solar company and came up with some interesting findings.
Apparently Nevada Energy has partnered with this company with a net metering agreement mainly to get cheap power to sell clean energy to California via the transmission lines to Cali that Nevada Energy owns.
Holy CRAP! This is one of the most brilliant business models of all time I think to myself! Even though our power is expensive, California’s is more expensive. California also prefers and craves clean and green energy! So here you have about 50,000 consumers (the solar company’s numbers so take it in stride) in Nevada CHOMPING at the bit to save 17% NOW on their bills and ready to sign their lives away on a 20 year energy contract to FINANCE and LEVERAGE a clean power source for a utility to sell to another state!
So back to supply and demand (I know this is already long winded so bear with me here) – If a supposed 50K less people are “off the grid” (which technically they are not) and they have enough panels on their home to provide electricity to their house and one or two more homes – isn’t there less demand for our utility and more supply (even if some is being sold to Cali?) Does it make LOGICAL (again this is a utility) economical sense in 5-10 years that our electrical rates will keep increasing?
Here are some additional random ramblings & points to ponder (and I am not an attorney so please have your attorney review) before signing into this 20 year contract:
Selling your Las Vegas house with this program:
You have several options: the program may convey upon new buyer qualifying, you can move the system – at your cost, you can buy the system out at fair market value determined by an appraiser, you can buy out the remainder of the contract. If energy prices decline or if alternative sources become cheaper, your screwed in a negative equity situation with this program. Much like the Las Vegas housing decline of 2007-2010.
You lose your tax credits and incentives:
When you sign the contract, you are signing tax credits and incentives over to this company. You lose your tax credits and incentives.
If electricity rates go down and you want to get out of the contract:
See selling your Las Vegas house with this program section.
Want to save 17% on your electricity bill without being stuck in a 20 year contract?
Yea there are a ton of ways you can do this and Nevada Energy has programs. You can zone your HVAC system. You can put exterior rolling shutters with a relay on your house. You can use programmable thermostats. You can do a myriad of things at a fraction of the cost without selling yourself down the river by signing a 20 year contract.
What about buying a solar panel system?
It’s looking better and better every day. If you purchase smart and take full advantage of incentives and tax credits recapture is down to 5-7 years rather than the 10-12 years it was a decade ago.
If one of your buddies is trying really hard to get you to sign up for this – they get $250 cash for getting you to sign up. If they are being hard core tell them your friendship should be worth more than $250!
It’s a wrap!
I could sell myself down the river in this 20 year contract for a 50% savings at 6 cents or less a KWH. No way in the depths would I sell myself out for 20 years for 2 cents a KWH. And one more random thought – what if Nevada Energy rolled out a net metering program for their individual customers? There would be a lot of overkill systems being installed individually!