Solar City and residential leasing [RE-wrenches]

[Bill Brooks]

Marco,

I'm a little concerned that everyone believes that Solar City's use of the
commercial ITC is indisputable. Although I'm not saying that they can't do
it this way, there is historical precedent for IRS problems with many of the
3rd party deals that took place in the 1980s. I wish the Solar City folks
the best, but I would really want some great tax lawyers on my team with
experience in 1980s fraud cases before I would be sure of myself. I answered
a lot of calls from the Federal IRS when I helped start the NC Solar Center
in 1988, and it does not leave you with a very happy feeling. 

I don't argue with the logic as to why it should be fine, but when we deal
with the IRS, logic often has little to do with it.

Bill.


-----Original Message-----
From: Marco Mangelsdorf [mailto:marco at pvthawaii.com] 
Sent: Saturday, April 19, 2008 11:48 AM
To: RE-wrenches at topica.com
Subject: RE: Solar City and residential leasing [RE-wrenches]


Joel,

Can we?  Yes. Do we want to?  Not this PV integrator.  I want to be paid
in-full once the install is complete and do not want to rely on getting paid
over time. 

marco


Can PV contractors finance high ticket products and services the same way
hvac, plumbers, home remodelers, etc. do?

>
>
> I wanted to update you all on my findings regarding the ability of Solar
> City, and other companies which offer similar residential PV lease
> arrangements, to break into the market.  It would appear that the ability 
> of
> a company to offer homeowners a PV lease, where they pay little or no
> up-front cost for a system and instead pay a monthly check to lease the
> system for 10 or 20 years, and accrue the 30 percent Federal commercial 
> tax
> credit (ITC) is a legitimate transaction.  While I don't know if this 
> option
> is available outside of CA., it's inevitable that it soon will be in those
> states that have buydown programs or the like.  My point is that if some
> companies, e.g., Solar City, can offer an off-the-shelf program that 
> allows
> homeowners to obtain a PV system at little or no up-front cost, those of 
> us
> who rely on cash sales to support out businesses should be very nervous.
> Americans love to buy/get things now and pay later.  And being able to 
> enjoy
> the benefits of a PV system, with the monthly utility bill savings being
> more than the monthly lease payments, without paying anything up-front 
> would
> shake up our industry to its core.
>
> marco


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