tracerstevens:
My mother would like to install solar panels on her roof but I and my two sisters would like to equally share the purchase with my mother. We would like to share the income produced from the solar panels. How do we correctly write up a legally binding contract to make this happen?
Please comment!
Tags Solar Panels
Suggested:
Concepts in Interior Design
October 27th, 2009 at 5:25 am
This might be more complicated than you want to handle. Depending on state and incentive structure, you might need to set up a business or partnership between you so that you can share the money flow and the tax credits.
To find out the incentives and tax credits, check out the DSIRE homepage:
October 29th, 2009 at 3:38 pm
The sharing the cost part is not hard. The cost would include the [hopefully professional] install, including permits and fees. And you would share in the rebates. As far as any tax credits, most likely, only one person would take them, and would pay the equivalent of 1/4 of the amount each to the other two parties.
Now, the hard news. Solar is not a big moneymaker. It can save money, but it is more of a money *saver* than maker. In most states, the power company doesn’t write an actual check for the electricity generated - all they do is measure the net energy usage, and bill for that. So if a bill used to be $100 a month, and is now $40, it’s hard to determine how much of the difference was due to the solar panels’ input, and how much was due to plain old conservation. To be fair, you would need a separate meter to measure the solar panels’ output. Also, it is normal for solar panels not to break even for 5-10 years. And in some places, the panels will never break even.
I’m a big fan of solar, and we even have our own panels on our roof, but I would be leery of getting entangled with relatives over the revenues from a photovoltaic system. I would say, if your mother doesn’t have the cash to pay for the system herself, she should get a home equity loan. If no one will give her such a loan, I don’t think it’s a good time for her to get such a system. If she can get a loan, you and your sisters could loan her the money at below-market rates, with the solar system as collateral. I would guess that you would each be putting up on the order of $4000, and expect to get paid back perhaps $10 a month.