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On a rare rainy day early last year, my husband, Alex, and I toured what, with any luck, would become the most exciting and daunting purchase of our lives: a cream-colored bungalow-style fixer-upper, built in 1924, a few blocks from our rental in Santa Barbara, Calif. What the house lacked in curb appeal, it more than made up for in charm and utility: the original built-in cupboards in the dining room, the way the light streamed in from copious windows, the fenced backyard for our wirehaired mutt. Moldy linoleum in the bathroom would be easy to rip up. A shower head inexplicably hanging above the kitchen sink would be easy to rip out. The location was a big draw, as was, at least initially, the fact that the red pitched roof of the two-car garage was outfitted with 17 solar panels. We\u2019d get to do our bit for the planet.<\/p>\n\n\n\n
The solar array was a modern addition to a property that otherwise hadn\u2019t changed much since 1950, when the late owner, Michael \u201cJug\u201d Jogoleff, moved into the home\u2019s 948 square feet as a preschooler with his mother and aunt, transplants from Iowa. He never moved again. He grew tall and barrel-chested and remained a lifelong bachelor, becoming a neighborhood fixture who organized block parties. His d\u00e9cor reflected his obsession with all things electronic, in particular ham radio. \u201cRadios and computers were packed into every available square inch of space he could find,\u201d and \u201chis roof bristled with every form of antenna,\u201d Santa Barbara\u2019s amateur radio club wrote after he died of cancer at the age of 70 in January 2017. \u201cHe was the consummate \u2018ham\u2019 and could build anything\u2014and did! Amateur radio has lost one of the last of the \u2018real hams.\u2019\u201d<\/p>\n\n\n\n
Two days after walking through Jug\u2019s ham shack, we made an offer. A week later, just before we entered escrow, we learned the solar array hadn\u2019t belonged to Jug. It was, in the language of the industry, a third-party-owner, or TPO, system, belonging to Sunrun Inc., the largest provider of residential solar in the U.S. I started looking into the TPO model. It\u2019s used less often than it once was, but it\u2019s been important in making residential solar, once out of reach for most people, much more widespread. The reason is simple: Homeowners usually pay nothing upfront. A company like Sunrun puts solar panels on your roof, connects them to your home, and claims a tax benefit for owning the system. Going forward, you pay Sunrun to provide the bulk of your electricity needs instead of your utility.<\/p>\n\n\n\n
I\u2019d soon learn that the system was tied to the title of the house. It appeared that if we bought Jug\u2019s place, we\u2019d have to assume his lease arrangement with Sunrun. I wasn\u2019t sure how I felt about this as a buyer, but it definitely piqued my curiosity as a journalist. I set out to examine the value proposition carefully.<\/p>\n\n\n\n
A Sunrun sign outside a home in Santa Barbara. Photographer: Jason Henry For Bloomberg Businessweek<\/p>\n\n\n\n
A Sunrun customer service representative told me that in the year before he went solar, Jug\u2019s monthly bill to Southern California Edison averaged $115. Under the terms of his deal, he paid $75 a month to Sunrun. The panels on his garage were expected to cover 85 percent of his energy needs. That left him reliant on SoCal Edison for the remaining 15 percent, at a cost of about $17 a month. All in, his energy bills came to about $92, a savings of about $23 a month.<\/p>\n\n\n\n
I got ahold of a copy of Jug\u2019s contract, and quickly saw how Sunrun could afford to extend such an offer. It lasted 20 years. The payments escalated annually by 2.9 percent\u2014they\u2019d be 72 percent higher by 2036. The tax credit was worth at least $5,000.<\/p>\n\n\n\n