Path-Q Solar

How should I estimate my unrecovered solar investment if I move before the system pays back?

Answer

Estimate the unrecovered investment as total cash paid and remaining obligations through the move date minus cumulative net solar benefits and any net value received at sale or transfer. Use the actual payoff or contract settlement amount rather than assuming the system's remaining value equals its original cost.

Key points

  • Include upfront cost, financing payments, interest, fees, maintenance, and replacements paid before moving.
  • Subtract realized bill savings, applicable benefits, and any sale premium supported by evidence.
  • For financed, leased, or PPA systems, include payoff, transfer, buyout, or removal costs.
  • Model several move dates because early-year cash flows may be dominated by upfront costs.

What it depends on

  • Initial cash paid and financing costs
  • Cumulative production and bill savings
  • System condition and remaining life
  • Sale, transfer, payoff, or removal terms
  • Supportable sale value attributable to solar
  • Expected move date

Risks and trade-offs

  • A projected sale premium may be uncertain and should not be treated as guaranteed recovery.
  • Contract exit costs can exceed the equipment's apparent market value.
  • Ignoring time value of money can make early unrecovered cash appear less significant.

Information you may need

  • All payments and costs to date
  • Production and bill-savings records
  • Current loan payoff or contract settlement quote
  • System documentation and evidence of local buyer valuation

Your next step

What to do next

Create a move-date cash-flow calculation and obtain written payoff or transfer figures for the specific financing or service agreement.

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SQ01670