Look, I don’t want to lump everyone into solar being shady. I LIKE what’s being offered. I just am quickly running into a brick wall of a problem: transparency.
Ask questions. Ask a lot of them. Ask more. Compare. Take your time. Do NOT sign with the first people you meet with.
I’m really dumbfounded about this at the moment. No words how disgusting this industry is, at a first glance. The idea here is to grin and bear it and hope I get lucky and did my homework and found the less egregious business to work with. Hopefully I get through this with no complaints, a great system, and a super smile on my face. The math I’m doing looks pretty promising.
From what I’ve seen so far, oh my F’ing God. This industry needs a bath.
If you are coming for the click bait of FREE $139,300, go to the bottom section about “paying for it”
Let the games begin! Player 1 approaches..
My first experience was with a company called PowerHome Solar. My experience may be an outlier, but the salesman was mostly friendly. I had some odd encounters with him, so I’ll put that on me for now and not try and go after anyone’s livelihood. He came out and met with me for about 3 hours. Their initial solution was the wrong house in the neighborhood, then the next solution I told them it was across the street and it was my neighbor’s house (probably my fault), and the last one we got right. My problem here was this. His quote was for about 10,200 kWh and my needs were 13,800. He said that’s the most they can put on my roof. So this is about 75% of my electric bill. The quote was for $74,000 for 22 panels with a battery. That didn’t sound right. So I dug in.
I then went to Energy Sage – where I’d recommend everyone go. I got some quotes pretty quickly, all without batteries, that had 100% of my energy needs for about $27,000-$30,000 (cash price, remember this).
I went back to my salesman at PowerHome and asked if he could break down the costs, because I can’t understand why there’s such a disconnect on the price. He said something like, “we have to make a profit too”. I get that. Zero issues with a company making a profit. I then asked for a breakdown, again, and was asked “what do you hope for the costs to be for each of these things”. This sounded kind of fishy. I again prodded – “please can I have some sort of breakdown to understand where you get $74,000 for a 10,000 kWh system”? He then said, “we don’t do that”. What’s also interesting, when he was here, I tried asking about the battery – like how long it lasts. “Maybe a few hours”. I didn’t get a kWh answer. And it was a $20,000 Generac battery with a $3,000 cell upgrade.
All I got was a bottom line price with 1.99% and pressure to sign. I see why.
Long story short with them, there was sales pressure that seemed institutional in the tactics used. The 2-3 hour meeting to wear you down. The asking “what will it take” to get it done mentality, when I told him I needed to consult my wife. I wanted to hear what he had to say, learn about the system, and talk with my wife about it. He said something like, “we only do one consultation, is it possible to get your wife on the phone for this”? I said, “no, she’s at work.” He then asked something like, “who is the decision maker in the house”. I asked him if he was married, as I don’t think he understood the level of condescension that comment was, nor how offended my wife would have been at that. Long story short, the dude was doing what he needed to do to close the deal. Problem is, he was the first I was meeting with and I could not understand the mental gymnastics to get to $74,000 for a 10,000 kWh system. Granted, the battery was $23,000, but still. When I tried to ask for a detailed break down, I was stonewalled. Something about “fluctuating prices” which vary. Basically, I tried to peek under the hood and was told “no”. So they were summarily dismissed.
The mark up for financing
I’m also working with Trinity, who have a setup in our neighborhood with my wife’s sorority sister who moved here. She has like 30 panels and has a 13,000 kWh system, but without the battery. Her price was like $30,000 or so. Forgot the exact amount. VERY happy with her system and had an $8 electric bill last month.
What I’ll get into below is there’s a different price you are quoted whether you are paying cash or financing. And this appears up and down the industry. I found 2 vendors that had a cash price that was the same as the loan price. Granted, one was 5.7% and the other was 4%. This is at least more honest. Same sticker price. What I was planning on potentially doing was to refinance my house again. My house value, according to Zillow, is now $150,000 more than I owe on it. Idea here was to get a $40,000 loan (remember, batteries are like $11k) at whatever percent, take the tax credits to then pay $10,000 and then refinance the $30,000 in with the home as sort of a cash out refi. Talked to my bank and they would give a lower rate if they are paying off that loan directly rather than giving me cash.
So be careful because a lot of these will just jack up the price by $10k+, then entice you with a 1.99% loan. No. It’s a lie. I went back to a vendor with a different financing solution and he tried to then give me the cash price, but at 7.49% loan, where I got a 5.7 and 4 from other vendors. So there’s a lotttttt of shade out there, and they will walk on you if you are not careful.
The point here is the transparency is dog shit. I am not entirely confident at this point these companies are extremely profitable without gimmicks. If the tax credits disappear in 2023 like I heard they might, this could crush the industry.
Player 2 enters the game
As I mentioned above, Trinity did a friend’s roof in our development and I reached out to them. As of this writing, they are working up a quote from me but I get the feeling they are one of the bigger and more reputable dealers. The quote he gave me was $39,000 – but that was the loan price. No battery included. Granted, the loan is like 1.99% I think.
I then had a few questions to him about this mark up of $10,000 over cash price. Heard things like “that’s the cash discount price”. And “I don’t control the price”. Seems like a nice guy, and direct questions like this have real answers, they just don’t seem to want to give it to me.
For argument’s sake, let’s assume the cash price was $29,000 (just for solar). So if I paid with fat stacks of Benjamins, the price was X. But if I chose to finance it, it would be price Y. Why two separate prices? From what I am trying to gather, it seems the “unsecured” loan by these vendors may be charging them this $10,000 up front and this cost is being passed along to the borrower. No one seems to bat an eye at this, but I am hearing 1.99% financing!!!
Well, here’s the deal. They tack on $10,000 to the principal and then say “low rates”.
While I’m awaiting Trinity to get back to me, they are one of the three I’m looking at now after Player 1 was summarily executed. Close to my house, big company. Been doing it for a long time.
Now if I can just work on the financing angle…
Player 3 signs in
I then got 4 quotes from Energy Sage with several getting back to me with adjusted prices on my battery request. Solar SME had a strong proposal. 100% of my energy, a 9.6 kWh battery, and .99% financing (after a $13,000 markup they hoped I didn’t notice). This markup seems to be capturing more of the upfront costs to then be able to offer a .99% rate. So, I see through their tricks. A 1.99% may have a 10k mark up, but a .99% may have a $13k mark up. Remember when a price was a price was a price and if you financed it, the company made bones through charging you interest? Now they advertise a low rate but pile a ton of cash into the principal. Shady….
I’d be interested to hear from anyone in the lending industry about what kinds of fees they are somehow charging these companies. If I am to enter an agreement with a lender, that’s between me and them. I’m unclear how this lender is then charging the solar company for my loan. Not sure how that works.
So I was impressed with Solar SME’s proposal and everything looked good. I sent an email about a call and wanted to know how to proceed. I had problems communicating with the guy who called, who had a thick accent. While not a deal breaker, it makes me wonder where their HQ is and how easy it would be to reach them with warranty issues. Just something to consider in the calculus of it all.
The person I spoke to said first he will sign over a non-binding contract, and then someone would come out. I said, “hold on. I’m not signing anything yet”. He sent me the contract, which he said was “non-binding”. No. It was THE contract to start work. SHADY. This may disqualify them ASAP. May have another fatality soon.
Furthermore, I read the contract briefly and it mentioned that they reserve the right to change the price based on costs of things going up. So – I wrote back and asked for a breakdown of costs for their estimate. My guess is they will also deny me. Question, if a panel costs say…$1,000 and you don’t tell me the cost is $1,000, what’s to stop you from immediate jacking your price up 5-10% after I sign the papers simply stating “higher solar panel costs”. Look, I don’t want to tell you how to run your business, but if you are giving me an estimate, EITHER break down the prices for me OR bake your profit into the estimate and if you have cost overruns, that’s on you. But for you to simply not break prices down, then reserve the right to change the price at any time is…..SHADY.
I went back to the Trinity guy with the Solar SME proposal numbers to give him a chance to get close to it.
Late breaking update – Trinity got back to me with a cost break down. First of any solar company to do this. OK. They aren’t dead to me quite yet.
Update 2 – SME came back with an alternative financing to the $13,000 jacked up price with .99%. 20 years at 7.49%. They will have to work on that rate, as I have 2 others that beat this by a mile.
Player 4 with the cold call for the dark horse win?
I then had a call today with a guy from Lumina Solar. I didn’t get them from Energy Sage, and I almost didn’t take the call because it came up as possible spam. I knew solar people were trying to contact me, so what the hell.
I talked with the guy for a few mins about my needs and I mentioned a battery and his first reaction, like everyone, was to try and talk me out of a battery. After I told him my schtick on a caffeine rant on a pot of coffee – he then suggest perhaps I might want a second battery. I think I sold him. More on the battery below.
These guys are 45 mins from me in Baltimore and have been around for 10 years. Guy coming tomorrow to take a look. I told the sales guy the leader so far was Solar SME which promises everything I asked for, at about $176 per month (AFTER I make the tax credit payment to the principal of the loan) – and he said he could beat it because they had in house and other third party lenders. With this guy I’m hoping for the cash price with a sub 4% number for 20 years. We’ll see. I’m hopeful with this one. To me, he was quick to push the “we’ll beat any price button”. These guys then hook you in, and you die slowly over a thousand paper cuts. When I heard that, my guard went up. I make bank. I don’t need you to beat the guy by 5 bucks. Maybe get me more power or a better battery or throw in a T shirt or some shit.
I’m really somewhat concerned about how literally every solar guy I talked to didn’t want to sell me a battery. This is concerning. The big thing I’m seeing everyone whiffing on was asking me what my needs were. It was just assumed, I believe, that everyone wants their electric bills to disappear. I think when you add an expensive battery, that jacks up the cost, people get sticker shock, and they fear losing the sale. But why do these companies all offer batteries, but literally all of their sales people try to talk me out of it?
How about you ask the customer what they want?
I had 4 of these guys tell me I should get a generator. Do they not stand by their product? Part of me feels they may worry about fire, liability, or the product losing effectiveness quickly and then they may be on the hook to replace it if the battery manufacturer is out of business. If that’s the case, why offer? But I digress. Why the hell would I want a battery?
So September 16th 2019, the repo market broke. I think I saw an article on it in October 2019. When I saw it, I had flashback of the finance or economics class I was in where we discussed the repo market for like 30 mins. Essentially, the banks were putting up collateral to exchange for short term cash at a rate for a quick turnaround of a day or 14 or so, and banks were not lending at the low rates – rates started to explode up until the government had to step in.
Banks were not trusting each others’ collateral. Please, please, let that sink in.
To me, this was the end of the financial system as we knew it. I might have been a bit hyperbolic on this, but to me, it seemed like the first domino was falling over – and I went down a lot of rabbit holes. We all lived through the pain of the 2008 stuff, which culminated in me buying a house at the top of the market in 2007, then being laid off once in 2008 and once in 2009.
So with the repo market, I saw things going sideways. I watched “The Big Short” again and wondered how I could protect myself if the system went down, and perhaps make some bucks along the way. This is how I found gold and silver (and later miners).
Big picture is that 2 years ago I saw this inflation coming that is now. I didn’t see the COVID event happening – no one did, but for months leading up to the crash, everyone was talking about how frothy the markets were. Then you enter Maloney’s “Hidden Secrets of Money”, and you could see the bombers coming after COVID. You have people trying to convince you that the fed isn’t “money printing”. They miss the stimmy checks of a trillion or so that went out. They also fail to see that when you make so much liquidity available as such low rates, things are BORROWED on the cheap. So you may not be GIVING out free money, but if you are lending billions and trillions on cheap margin, which is then thrown into the market casino, THERE is your inflation.
Point is, this is not 1980. Voelcker cannot take interest rates to 20% to stop this. As Gammon says, we are in a “doom vortex”. Paul Tudor Jones just yesterday got on team inflation.
Let’s play some chess and see what happens. Many are now just seeing some higher prices in the news. But let’s walk through the end game here. How does this affect my solar purchase?
- Prices increase. Wages do not increase as fast as costs.
- Input costs rise with energy, materials, and labor. These are passed on to customers, where possible.
- Costs of goods increase.
- People start to understand the bigger picture. As Rafi Farber says, they will first buy what they need. Then, they will buy what they may need in the future. I think the last part of this is then buying what they WANT with cheap credit, WHILE they can, before interest rates HAVE to rise.
- All of this creates strong demand, which is mistaken for a strong economy.
- Input costs are up, and businesses do not want to expand a lot – this demand could be temporary. They are making record profits. To expand production could cost billions. With a lot of froth, and tax plans coming, no expansions happen.
- This leads to shortages of goods and services.
- To reduce shortages, prices start rising quickly when you cannot produce more units. This is economics 101. If there is strong demand, price goes up to find a homeostasis. More supply usually cures this, but we may be at production peak.
- These higher prices then lead to calls about “greedy businesses” and price ceilings. In the current climate and band of socialists running things, price ceilings could be in the cards.
- With price ceilings, come shortages. No one is producing goods for less than cost, and no one is expanding production without profits and ROI to cover it. Economics 101.
- All of the above includes energy production.
- This leads to rolling blackouts. Take a peak at California.
So these clowns are telling me to buy a generator, and not a battery with solar. I looked at a generac battery hooked into my gas line. So if we have rolling blackouts with the electric grid, it’s also potentially possible we have gas rationing. It’s possible electric and gas is off. Possible, probably not likely. But in THAT world, gas might also be 4x the cost it is today. So do I want to power my house on it at ridiculous costs? No…
I also recently got a fire pit I posted pictures on. Part of this thinking was if the gas went out and I couldn’t cook, I could use that to cook. I have cast irons. Take a look at that beauty. I have a 16 month old, so I’m planning for a lot of contingencies. Got a decent amount of wood here and a friend with about 80 cords on a farm, so that could help.
So the idea with solar with a battery is this. IF the grid goes down, vis a vis California, with rolling blackouts, my solar will keep working. Without a battery, it shuts you down from producing due to the possibility of someone fixing wires. Not sure if a lot of solar people know this.
I also am at the last stages of fixing up my basement. Installing the drop ceiling now, what a treat. I have a sump pump. If there’s a hurricane and the power goes out, I want my food and sump pump protected. Last thing you want is your power going out and then you take on water in your basement. So I’d like to protect my basement. If there’s a terrible thunderstorm overnight that takes the power out for 6 hours, with massive rain, I don’t want to wake up to a pond in my basement.
Lastly, I have a LOT of frozen food here. I write about my grass fed/finished beef. Getting a half of a pig soon. With a 16 month old, I want food here. And what if those shelves start to go bare? I figure the last thing I’d want is a rolling black out to take out my freezers for days.
Now, I calculated on an average day I use 37 kWh of energy. Perhaps that is 1.5 kWh per hour, estimated. That has an AC running. Lights on everywhere, dishwasher, etc.. I figure in a “grid down” situation, I’m only using my refrigerators, freezers, and sump pump. Automatically stays on. I figure I could reduce my usage from 1.5 kWh per hour, to 1. With a 9.5 kWh battery, this could give me potentially 9.5 hours of power.
After I went through my rant, my guy was thinking about a second battery for me. Not sure I will need it, as potentially I will be producing solar the next day, and I think I’m good with about 3 hours of no power with the sump pump and freezers. That being said, if the numbers are ok, I might do a second battery.
As the inflation narrative is heating up, and people are suddenly realizing inflation is here for awhile, I am looking around and thinking it’s not going to be long before the masses see much higher prices for energy. Especially with the “green new deal” and how the great plan was to kill off any energy here and then tell OPEC to pump more oil out at low prices. Sort of hilarious how that was the master plan. “Fossil fuels are evil!! Oh…we won’t produce them, we’ll just have other people produce them, then at gun point we will ask nicely for them to keep prices low by increasing their output”. OPEC’s response: “NO”.
There were a couple more items I left out below, saving them for here.
13. At some point, those with means have stocked up all they could. 90% of people are priced out of most goods and crime starts to rise, significantly, and there are a lack of police, mysteriously.
14. Profits are being eaten up by higher and higher input costs. Layoffs now begin – price has to stay high to keep the lights on. Demand drops as there are no buyers at these high prices.
15. FAANG stocks and many others with stupid crazy P/E ratios get murdered in the stock market. This now rolling a lot of money into defense stocks, commodities, and staples like toilet paper.
16. About the same time, those who have all they or want need stop buying. Those who have been priced out a LONG time ago can no longer afford goods anywhere NEAR these prices. And safety with small businesses and looting become a concern which destroys small business. This is about the time where a great deflation happens. So, I can see how a “blow off top” that many are predicting is in its early stages. Structurally. The SANE thing to do would be to taper and allow a lot of chaos which could stop the blow off top. But many do not think the taper is possible, and thus the day this is realized, this is probably the launch date of step 7 and 8.
I added all of these other steps not to scare anyone or go tin foil hat, but to point out that we are at step 6 or so (as the masses just begin to get in on this) and if we are in a 1-7 year process of going to a very high inflationary situation, it would make sense to get everything you can today. I bought all I need. I bought all I MAY need. Now, I WANT power at today’s prices preserved, anticipating much higher energy prices down the road. And I want to do this before everyone else realizes this. Because then there will be shortage of solar panels.
I believe this will lead to a LOT of people looking into solar in the next 6-12 months. Solar makes up 100m oz of silver demand each year. What if there was a mad scramble to solar and demand was up 4-5x with skyrocketing energy costs? My feeling is that at the SAME time there’s a mad rush to solar, there’s also a rush to buy silver. That is going to be the REAL squeeze, my friends, when industrial demand AND investment demand go parabolic. I got in on that 2 years ago. Imagine when orders for solar panels are flying off the shelves. Where are they getting the silver?
Paying for it?
My house is also showing a value of $150,000 more than I owe like I mentioned 8 years ago above. I know that at step 15, my house value may be 1/2 it is now. But I have a low fixed interest rate and don’t plan on selling for 30 years. My mortgage is $2,000 a month with like $70 a month PMI built in. I talked with my lender, and I can take that $30,000 loan and roll it into my refi lower. I’m anticipating a $40,000 cash cost (or same price for credit with a 4% loan), take the 26% tax credit and then pay that towards the principal, having me owe $30k.
With a lower interest rate and higher principal, my loan goes up $62 per month. I lose $70 in PMI. My energy bill of $150 goes away. Meaning, essentially, I can get free energy for the next 30 years. With a battery (or two) as insurance.
Oh. I forgot. In PA, I get these tokens each time I produce 1 kWh of electricity, called SRECs. If my system generates 14,000 kWh each year, that’s 14 SRECs. They are currently about $42 now, but the thinking is they will go up to about $60 and cap there. This means I get paid $588 to $840 per year while I’m producing solar. Over a 25 year life, that is $14,700 – $21,000.
Each solar panel also has 20g of silver. So for a 28 solar panel setup, you are looking at 18 oz of silver. In 25 years, does anyone have an idea of what silver will cost? I have heard crazy numbers like $300-$600 by end of THIS decade. If it’s $600, inflation has gone crazy, but the silver that could be extracted from these are $10,800.
So let’s look at big picture.
- I avoid an energy bill for 25 years. If we put in some mild inflation, that might average $225 per month over those 25 years. It’s $150 per month now. So I avoid paying out $67,500 in energy bills. This could be FAR higher. I’m keeping this VERY low, perhaps anticipating my energy bills to double inside of 2 years and never go down from there again.
- I intend to refinance the house at a lower rate with this loan and apply the tax credit. The net result of this is no increase to my mortgage payment due to the lowering of PMI. Increases the value of my home. Considering this, my break even time is the day I do the refi. You might be doing a 10 year pay back, mine’s possibly 3-5 months.
- SRECs which could be worth $21,000.
- Possible silver value at the end is $10,800.
- FREE $40,000 solar system with battery and installation.
- Battery (or two) to act as insurance against brown outs, rolling black outs, power to sump pump, power to cooking needs (microwave, electric components to my oven like temp control), power to refrigeration and freezer needs to protect a year of food.
So what do I get, potentially out of this over 25 years? $139,300 for free as well as insurance to protect my home against loss of power.
One thing to consider is that my battery life is about 10 years. If I keep getting those SRECs, they pay for my battery replacement. In 10 years, how much better will batteries be? Will they cost less and get more? So maybe knock 10k off of my free total, but add a second battery to it.