Arizona Homeowner Sees Solar Lease as a Liability

There was a piece in Bloomberg today entitled: Rooftop Solar Leases Scaring Buyers When Homeowners Sell.

The article began as follows. . .

Dorian Bishopp blames the solar panels on his roof for costing him almost 10 percent off the value of the home he sold in March.

That’s because instead of owning them he leased the panels from SunPower Corp. (NASDAQ:SPWR), requiring the new owner of the house to assume a contract with almost 19 years remaining. He had to shave the asking price for the house in Maricopa, Arizona, to draw in buyers unfamiliar with the financing arrangement.

First of all, this makes no sense.

The down payment has already been made on the lease (assuming he made one), and going forward, the panels will provide a savings on electricity. It is extremely unlikely the new homeowner would be paying more with the solar lease.

Second, blaming solar panels for a 10% cut on the value of a home is beyond ridiculous. No one told Dorian Bishopp to lease a solar power system. And certainly he knew the deal going in. If he was so uncertain about it, he shouldn’t have purchased the lease.

In the same article, a Florida home appraiser by the name of Sandy Adomatis chimed in, saying, “Homeowners don’t understand what they’re signing when they get into this. You’ve got another layer to add on top of finding a buyer for the house. It’s not a plus.”

How is offering a potential buyer the opportunity to buy a home with a lower electricity payment a bad thing?

I don’t know. Maybe it’s like that in Florida, where the entire state is baked by the sun, but the government is one of the most hostile when it comes to integrating solar. Or maybe because there seems to be an overwhelming number of folks in Florida who still believe that going solar is somehow equated to socialism.

Adomatis also said that for many potential buyers, a solar lease is a liability rather than an asset.

With solar leases, everything is taken care of. The insurance, the inverters, the maintenance. And again, it provides the home owner with cheaper electricity bills. This is not a liability. At least not to anyone with an even an ounce of common sense.

SolarCity (NASDAQ:SCTY) spokesman Jonathan Bass made a valid point when he said. . .

They’re essentially moving into a home with a lower cost of ownership, a lower cost of energy, so a solar lease shouldn’t make it harder to sell a house. It becomes a selling point instead of a point of misunderstanding.

Of course, I suppose common sense doesn’t amount to much when you’re trying to unload a house in a state where there’s an overwhelming majority of knuckle-draggers. Still, for every Dorian Bishopp out there who struggled to sell a home with the value of cheaper electricity, there’s probably five others with solar leases who were able to offer those leases as a value add. Because that’s exactly what it is.

In fact, for SolarCity, transferring leases has become so common, the company has had to create a team that exclusively handles about 150 transfers per month due to the growing demand for the service. I suspect this will be the trend going forward.

This is also one of the reasons I recommended picking SolarCity up on the last big dip below $50. I do hope you picked some up, as the stock has soared back over the $70 mark over the past couple of weeks.

Arizona Homeowner Sees Solar Lease as a Liability originally appeared in Green Chip Stocks. Green Chip Review is a free 2x-per-week newsletter, is the first advisory to focus exclusively on investments in alternative and renewable energies.