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many scams in the solar sector , and I am ready to expose them all in this video. I also have the latest news on what Tesla is doing in the solar sector, how they are cracking down on these scams, and I'll also discuss whether you should buy Tesla shares or not . Because, in the end, this is information that will make you money.
What could be more American than saving money , without spending a dime , and protecting the environment ? Over the past 10 years, companies like Sunrun and Vivent have been coming to homes and making deals , showing this as an ideal. But there are some important scams you should be aware of when you're considering solar , buying a property with solar, or wondering whether to buy Tesla shares .
First of all , I'm really excited to make this video because I've been wanting to get this information out for years . The only place I talk about this, the only place I express my opinions , i . Remember , you can get 20% off until August 20th using the coupon code 'short redfin' . The first scam shows how depraved the solar industry can become .
See, any fraud usually starts with you signing a contract, without spending a dime. But don't worry, you have 3 days to cancel that contract . But no one does that. As a result, we get caught up in scams, but we don't know it until it's too late. Solar companies usually say, " We don't put any liens on your property ." In fact, here is a statement from Vivent Solar.
To be clear , Vivent Solar would never jeopardize its customers' homeownership rights . Vivent Solar does not take any lien on a customer's home under its agreements . This is all just a lie , because whether you call it a lien or what it really is, which is the UC1 that is registered on your property when these solar contracts are made , when you sell the house, the title companies will not let you sell the property until you clear your debts or these contracts that the solar companies registered on your house .
So, both are the same. They prevent you from selling the house without following the terms of the contract. So basically, solar companies do exactly what they say they will do. "We won't put any debt burden on your home," they say. However, they literally put a debt burden on your home. And that makes the solar industry largely fraudulent.
But let's learn about other scandals. The second scam is that solar companies often sell these leases or power purchase agreements with the promise that if you have to sell the house, don't worry, we will transfer it to the buyer . But you know what, I'm a real estate broker and I have to deal with these crappy lease agreements and power purchase agreements constantly .
I will say this very clearly . Your buyer won't want to take your stupid deal for an improvement you made to save money on fuel. Here is a perfect example of this. I am selling a house in Ojai, California , where two owners live and work from home and own a spa . They use about $250 worth of electricity per month .
In their case, using solar is the right thing to do. If they had stayed there and kept using the panels, they would have saved money . The agreements are meaningful. They are never bad. Yes, although I am a little negative towards them . The reason is that when it came time to sell, they thought it would be easier to transfer to the buyer.
But now two millennial buyers who work for LinkedIn come in and suddenly, wait a minute, they're not at home at all. Their electricity bill is only $30 per month . They don't want that deal and the buyers cancel the deal. This happens more often than you think . It seems easy to say, " Oh, we'll transfer the panels to the buyers ." The problem is that the agreements made by previous sellers are not understood by many buyers.
The conclusion is that when something becomes complicated or unusual, buyers don't want it. Buyers don't want to inherit your useless, unusual contracts . They only want the ordinary. Remember , solar contracts are based on your usage , not the buyer's usage. The third scam is, well, if you know buyers don't want panels , no problem.
You can pay for the contract in advance . However, do not confuse the down payment for the contract with the purchase of the panels . See, usually at the beginning of the contract, you're not allowed to buy panels. You will need to continue paying a lease or power purchase agreement to something like Viven Solar or Sunan .
So, you know what happens when they say " you can pay the contract early " ? What they're saying is, the total amount of money you're going to pay, including the annual increases we're going to impose over the next 20 years, and all of the credits and benefits that are going to come to us through these solar panels .
If you want to pay off those 20 years of payments we expect early , you can do so now. But after those 20 years, we'll come to pick up our panels , because even though you paid the contract upfront , they're still our panels. In other words , many sellers are faced with the question: "Should I sell the house and pay $20,000 to remove the solar panels, or should I cancel the contract and find another buyer who will take the panels, but will have to sell for less ?" Oh, and if you decide to pay off the contract early , don't assume you'll get the tax breaks that come with buying the panels .
The fourth scam is that solar companies say, "Okay, you can swap the panels for another property ." That's fine, but if you're moving , it's best to move to a property that gets equal or more sun , because otherwise, the solar company will definitely deny your opportunity to move the panels to a different property .
In another example , the homeowners wanted to replace the panels, but they were moving to Washington, where there was slightly less sun than Southern California . Needless to say, they were unable to transfer the panels. The fifth scam is that solar companies often sell you more panels than you need .
Their argument is that your usage will increase over time . You can buy an electric car or run that spa a little longer. So, they actually sell more panels than you need , but in reality, it's much easier to take a smaller system and if you need more in the future, you can add panels . But signing a 20- year lease or power purchase agreement with a system that's larger than you need will result in many of the benefits of actual solar being lost.
The rule I follow is that if your electric bill is more than $200 per month , it would be beneficial for you to install solar panels . Unfortunately , most people's electricity bills are less than $200 per month, and solar panels won't be a big deal to them, but installing more solar panels than necessary is completely unwise .
This is where the sixth deception begins. Many solar companies say, "If you produce more electricity than you need , you can sell it back to the grid . Now that you're generating electricity , you can sell it back to the utility company." That's great, but you're paying about 17 cents per kilowatt hour for the electricity from your solar panels .
If you give that same electricity back to the utility company , they only pay you two to four cents . So, you're losing 13 to 15 cents per kilowatt hour . That doesn't make sense . It's never a good idea to make your system bigger than it needs to be . In fact, you should never try to get your bill to zero , because the electricity your local utility company charges is cheaper than what solar generates in the early stages.
Solar only really makes sense when you switch from the expensive 30-40 cents per kilowatt hour to solar . That makes a lot of sense . Okay, but Let's do the same . We're going to buy solar panels, and you know what else? We're going to use 0% interest-free financing on solar panels for 18 months. That also seems like a scam .
When I bought solar panels , I paid about $21,000. My father-in-law also bought solar panels for the same amount and got interest-free financing for a year . He considered it the same as cash . It's understandable . When you see this, you're like, " Well, this is the price, if I can pay it off in a year , why shouldn't I?" "They think, 'Well, I can invest that money in the meantime , make a profit , and win.' That's great.
It's smart. It makes sense . Sure, why not do that? When I was sitting with the solar sales rep and buying panels , I said, 'Oh, okay.' You are providing interest-free financing for one year . That's great. A quick question. How much would it cost if I wrote a check now ? As many of you know, I am a big fan of the home equity line of credit.
So, I won't be getting out of my home equity line of credit . Anyway, I asked, " Hey, how much would it be if I paid cash right now?" First, the price list he had in his hand had all the 'good as cash' prices. He said, "Oh, you're paying cash , but wait." He put the paper aside and took out another paper from another folder.
He said these are our cash prices . There's a difference of about $1,500 to $2,000 there. There is an 8 to 10% difference in price if you pay cash instead of 'Good as Cash' financing. Oh, it's so sad to see my father-in-law's situation . He suffered losses of approximately $1,500 to $2,000. I must say this is a good lesson .
Maybe he'll comment under this video , " Hey, you know what? I'll be an example for others to learn from ." But this is very disappointing , because it seems like it will be a scam no matter which way you go . Scam number eight. When you lease a solar system or enter into a power purchase agreement , you typically don't get any environmental benefits or credits , be aware of this, but you usually don't get that big benefit, the 30% energy tax credit.
See, when I spent $21,000 on solar panels for my property , paying cash for the best price, I got a lot of panels . They are really useful to me . That makes sense . Now, I can get a 30% discount on it. And basically, the government gives me a big $7,000 tax credit when I file my taxes . That's a great thing.
But if I lease a system of the same size or enter into a power purchase agreement , I generally don't get that 30% tax credit. It goes to the company that makes the lease or power purchase agreement . Good for them. What will we do, that's all. At the end of the video I'll explain some examples of leasing and purchasing , so stay tuned for those , because then we're going to talk more about Tesla .
Number nine, this is probably my favorite scam. Solar companies that offer lease or power purchase agreements will say they will maintain your system for the entire contract period. Friends, as a general contractor, I have sold solar contracts in the past . These systems are designed to be maintenance-free , and if any parts do break, they are covered by the manufacturer's warranty for a long time .
For example, the micro inverters I have have a 25- year warranty . They are designed to be maintenance-free . If they are damaged, the manufacturers should take care of them. Therefore, the argument that maintenance is also included is quite meaningless. I'm saying, solar companies don't come to wash the dust that accumulates on top of your solar panels .
To be honest , you don't even have to do that . Solar scam number 10, 'bait and switch' - that is, convincing you to see how good our customer service is when you want to join as a new customer . Then you are transferred to the old customers section , where you have to wait on the phone for hours , but your questions are not answered, and your problems are not solved.
That's why companies like Vivent or Sanon have such a wonderful reputation. I'm not saying everything is bad, but the reviews are very different from what you might expect. Scam number 11. Saying that having solar panels will increase the value of your home . Let's speak the truth for once . If you lease panels or have a power purchase agreement , the cost of terminating the contract early or removing the panels will typically reduce the value of your home.
So, if you have a Vivent Solar contract and it costs $20,000 to pay off that system , it's safe to say that the value of your home will decrease by about $20,000 . Take the word of a Southern California real estate broker who encounters this constantly. Clients call me and say, "Kevin, should we install solar panels ?" If you ask.
I would say, "Only do it if you're buying them ." No lease. No power purchase agreement at all. Scam number 12. Many homeowners think they want to keep these solar panels forever . That's why they justify installing solar panels on their homes , because they think that if they're here for 10 years , they'll pay for themselves .
They think they will start bringing me profits. That's true. That's good. But the problem is, when you vacate the house and put in tenants- if you decide not to sell the property , I always recommend renting out the properties. Tenants won't pay you more in rent just because you have solar panels . This is a very difficult thing for the market to understand.
If something is too complicated, you won't get the reward you deserve. No tenant would look at your home and think, "Your rent is $2,800, and everyone else is paying $2,600 ." Oh, but yours has solar panels, so it's worth the difference. Tenants don't do those calculations. You may feel like doing that, I know there are many who believe in the efficient market hypothesis.
That doesn't work in real estate. Well, the real estate market is not efficient. That's why there are wedge deals , which we discuss in the course link below. Last scam, after that let's talk about Tesla . The 13th scam is that solar contracts, such as leases and power purchase agreements, often include payment escalator clauses that say your payment will increase by approximately 2.9% each year to keep up with inflation.
The problem is that it doesn't grow to that number. It is always the same number . So it will always be 2.9% . But if we look at inflation now or last year , it was 1.4% to 1.6%, now 1.8%, but here it is 2.9% . This is just an added benefit for solar companies. Now, let's talk about Tesla . Tesla has once again completely changed this sector.
Instead of a complicated sales process, Tesla has made it much easier to buy or lease solar panels . Now you might be thinking, "Wait a minute Kevin, didn't you just talk for a while about how big a scam leases are? " Yes, I will discuss that. Don't worry. If you want to buy, all you have to do is choose a size, small, medium, or large .
In my opinion , if you want to buy panels, start small and you can always add more later . Remember , my rule of thumb is to only buy panels if your electric bill is currently over $200 . If your energy costs are less than $200 per month , don't even think about solar for now. If you're thinking about buying, remember that you get a 30% discount when you file your taxes .
They won't come to you right away . So, if you have to pay 7,500 for a small one, 15,000 for a medium one, or 22,000 for a large one , you have to pay first, and only then will you get 30% back . When it comes to leasing, Tesla is really exciting me , because you know what they announced ? Tesla announced that you can lease solar panels and cancel at any time .
They literally eliminated most of the scams that existed in the solar industry. They gave a strong answer to Viven Solar and Sunrun , saying they are going to completely change this industry with this cheap leasing method . This is truly amazing. Very good. They will charge $1,500 to remove the solar panels if you cancel , but this $1,500 is much better than paying for the system upfront.
The important thing is that Tesla is transparent about this. If you cancel and pay that $1,500 , Tesla will probably lose money by sending crews to install and remove those panels . So in my view, $1,500 may be a break-even or loss- making decision for Tesla , but it is a very smart decision because it will prevent many of the scams that occur in the solar industry.
Now, should you buy or lease panels ? In my opinion , these lease disputes and those methods of terminating the contract at any time are not good. If you plan to stay in your home in the future , I would strongly recommend that you buy panels . The reason for this is very simple. If you Google the price of the medium-sized solar panels you're going to finance, excluding the 30% tax credit you'll get , it would be about $10,600, reduced by 30% from $15,162 for the medium-sized panels .
Let 's say the interest rate is 5% and you want to pay off the amount in 8 years . That means if you pay $134 per month, including principal and interest payments, those panels will be yours . This means that after this period , the panels will be yours and they will provide you with free electricity until they break down, which is another 15 or 20 years .
The lifespan of solar panels is around 25 to 35 years , after which their efficiency starts to decline. Some panels, however, continue to function even after 40 to 50 years . This seems strange. But if we look back at the cost of renting a medium-sized solar panel system, that would still be around $130.
So in my opinion , if you buy the panels and find a way to get that 30% tax credit, you'll be in a much better position in the long run . Moreover, you will also own the panels that will increase the value of your property. By purchasing these solar panels yourself , you will avoid such ineffective financing methods and get the real benefit from solar panels .
But again , this only applies when your electricity bill is currently more than $200 per month . So stay away from all the scams we've talked about so far. Don't be fooled by solar. Instead, spend that $264 . Join me on the real estate investing course and learn how to make money, because my channel's goal is to provide practical advice, not just general finance topics that anyone can Google.
Thank you for watching. Oh, and I forgot to mention, should you buy Tesla stock ? In my opinion , a definite must- buy. This is a major shift in the solar industry, and with the profits in the solar sector now shifting from fraudulent companies to Tesla, I predict it will be huge . I think this decision by Tesla is excellent .
I am very impressed and excited , because I say this with my experience in the solar industry, which most people don't have. But now that you've watched this video , it's like you've had my experience too .
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