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Generator: End of Term and Buyout Options

Generator options to both renew, purchase or upgrade. Each option has a few simple parameters associated, giving flexibility and optionality to homeowners.

Option

Details

Renew

Option 1: Renew the Lease

  1. Automatically for 1-year terms (default if no response), up to 5 years

  2. Manually for a 3-year term by opting in via renewal notice

    1. For a 3-year renewal, the monthly payment will drop to 75% of the final year's lease payment

  3. At the end of the renewal term the customer can:

    1. Purchase the equipment for $1000 (year 15)

    2. Not renew and either buyout or return the equipment

    3. Upgrade into a new lease (see option 3)

Buyout

Option 1: Before the Lease Expires

  • Years 1-5 if you are selling your home - New homeowner qualifies for Generator financing, and signs transfer agreement to take over the Generator Lease

  • Buy-out this Lease pursuant to the buy-out table set forth in Section 7(f) of the Lease.

  • Years 6-10 any time

    • Buyout: Sum of remaining payments discounted by 5% OR

    22% of initial system

Option 2: Do not Renew (walk away)

  • Notify Palmetto at least 30 days before lease end.

  • Buyout the equipment which varies by lease age:

    • Years 10-11: Buyout = greater of 22% of total financed cost or discounted remaining payments

    • Years 11-12: Buyout = 18% of total financed cost.

    • Years 12-13: Buyout = 14%

    • Years 13+: Buyout = 10%

  • Have Palmetto remove and dispose of the system, with a $1,500 removal fee.

Upgrade

Option 1: Start a New Lease with Replacement Equipment

  • Notify Palmetto before your renewal ends.

  • If you choose a new lease:

    • No $1,500 equipment removal fee.

    • You receive a 25% credit of payments made during any annual renewal term (not the original 10-year term), applied to the new lease.

A

Better to buy or Upgrade?

There is no simple answer when determining the best option. Homeowners who wish to explore purchasing or upgrade may see higher value in a particular option based on their personal circumstance.

For example:

  • Homeowners who purchase the equipment outright may benefit from a lower overall price tag. However, purchasing the equipment voids the Generator benefits, such as ongoing maintenance support, parts and labor coverage, etc.

  • Homeowners who choose to upgrade will benefit from a newer system at a new rate, while maintaining all of the benefits included in the Generator.

B

Where can I view the payment schedule?

Homeowners can view the total cost of all Generator payments on their Exhibit B (in most cases; state versions may vary).

C

Purchase Price?

Homeowners opting to purchase the Generator equipment at the end of the lease term will be offered a fair market price at that time.

​
Buyout the equipment which varies by lease age:

  • Years 10-11: Buyout = greater of 22% of total financed cost or discounted remaining payments

  • Years 11-12: Buyout = 18% of total financed cost.

  • Years 12-13: Buyout = 14%

  • Years 13+: Buyout = 10%

D

UCC-1?

The UCC-1 fixture filing on the generator equipment is the financier's stake in the equipment.

The UCC-1 fixture filing is done after install is deemed complete. It is a standard filing among industry financiers.

Homeowners going through a refinance or mortgage process may have a loan officer come across the UCC-1 fixture filing across the equipment and may, incorrectly, deem that it's a lien on the residence. However, it is not and should not prevent refinance. It is important to note that in many cases this is quite literally a matter of knowledge/conceptual understanding on the side of the mortgage officer.

E

What happens if homeowner passes away?

  • If property is passed down, new owner is responsible for contract

  • If property goes to estate, estate is responsible

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