How it Works

When there’s a power saving event, OhmConnect will ping you, and you are expected to change your behavior to save power. If you do in fact save power during the event compared to your historical energy usage, you’ll earn points, which you can redeem for various prizes such as Amazon Gift Cards (my choice). When I first learned about this, I thought it was super annoying; I didn’t want to think about every event and change my behavior just to save a few dollars. Thus, I just set it up and forgot about it.

Then, when I added integrations and realized I was earning a lot of points, I finally understood how this works. You don’t have to change your behavior if you integrate your smart products and let OhmConnect manage them for you!

Connect Your Devices

I essentially have three types of devices connected to OhmConnect:

• Tesla Powerwall
• Thermostat
• Smart Plugs

For each device except for my vehicle, I got participation awards. At the base rewards, 10 watts is about 1 cent, so I made $2 just for having my devices participating! But what does participation mean?

• Tesla Powerwall - OhmConnect will change the backup percentage so that you use/discharge as much of your battery during the event as possible. If you look at my rewards above, I discharged about 4kwh during the event
• Thermostat - OhmConnect will disable your HVAC. At first, I was annoyed, but then I realized that if I really wanted the AC on, I’ll just override OhmConnect and miss out on $0.30 cents in rewards. I’ve also learned to blast my AC before peak hours.
• Smart Plugs - OhmConnect will turn off these devices will turn off during the events. In the case of my home air filter, I don’t need it running 24/7 and it doesn’t have its own good scheduling system.

Keep a Streak

If you keep a streak of saving power, even if it’s just 1 watt, you’ll eventually hit Diamond status like me. With a Tesla Powerwall, it’s pretty easy to do this since energy is exported automatically based on OhmConnect’s integration. With my Diamond status, I can redeem rewards for 30% fewer watts, e.g. a $10 Amazon gift card for 5,960 watts instead of 8,520 watts. This means that 1kw of power exported is equivalent to more than $1.50 of Amazon credits for me.

Forget About It

With all your devices connected, you, by default, will not need to worry about anything. If anything, you’d override your thermostat to turn on the AC when OhmConnect disabled it.

Upcoming Tesla Powerwall Integration Changes

There have been a few days where the Tesla Powerwall integration did not work. When I contacted OhmConnect, it seems like they’re updating their integration, which makes sense given that the current integration they’ve described probably doesn’t work for NEM 3.0 users. A core issue seems that Tesla hasn’t made an API to allow third parties to enable discharging batteries. This is something to keep an eye out on if you’re integrating your Powerwall.

Differences Between VPP

There are two key differences with OhmConnect and Tesla VPP. The first is that when a VPP event occurs, Tesla charges your battery for you, which would be really beneficial for someone like me who doesn’t always have enough solar to fill their batteries. OhmConnect doesn’t have that much control over your Tesla Powerwall.

The second is that there are becoming less and less VPP events, most likely because California’s grid is becoming much more stable with more batteries. OhmConnect, on the other hand, seems to have at least 3 events per month, most likely to keep all users engaged with the platform. For me, 3x events per month with an average 4kwhs saved is 144kwh per year or $216 in Amazon credits per year, not including additional events that occur during the summer.

Want to save money too? Join OhmConnect with my referral code: https://refer.ohm.co/jonathanrichardong

The Loan

First Republic has a program called Eagle Community Home Loan that provided low interest rate mortgages for home buyers in “certain” areas, i.e. gentrifying areas such as where I purchased mine. This means that I was able to close at a 3.75% interest rate with zero points and $4k in lender credits even though mortgage interest rates were about 6% at that time - I believe the fed interest rate was around 3.75% at that time as well. A 6% interest rate would’ve meant about $1.1k/month more in interest! These really low interest rates are the reason First Republic went bankrupt. Unfortunately, they didn’t have a referral program at that time, otherwise I would’ve tried to have other buyers use them as well.

The Options

I’m not going to discuss all my options but the key functional ones are:

• As discussed on my post about the Tesla Powerwall, I was able to add a Powerwall to my home, but not additional solar panels.
• EV charging hookups (not the sockets, which I had to install myself).
• I installed ceiling fan hookups to all the rooms except the living room, which I thought I wouldn’t need until summer 2023 came. These ceiling fans significantly help cool the house and lower my electricity bill.

The Problems & The Fixes

A problem with a lot of new construction homes is that the builders rush. Here’s a list of problems I experienced:

• Electricians had to come by a few times to fix some switches that were improperly set up.
• The vinyl floors creaked in the master due to lack of spacing against the wall, which had to be fixed by cutting the dry wall and trimming some vinyl. I also had one uneven vinyl panel that was just hammered in to fix.
• My vinyl shower had a crack, which was fixed pretty quickly but made my house smell like plastic for a few hours.
• Cabinets were not soft close as ordered. They ended up fixing them all, even the ones that didn’t have an option to make soft closing, so this was an overall win.
• HVAC did not work on the first day I moved in. They refilled freon once but it leaked within a day. The HVAC repair folks (paid through KB Home’s warranty plan) came by and found a leak due to a nail (caused by KB Home) after cutting 4 holes into the walls that were then repaired.
  • This was a pretty bad experience because without the HVAC, my house was reaching 60 degrees during the winter. It was freezing. And I had to argue with them for compensation - they finally let me buy a space heater, which only covers 1 room for my 4 bedroom house.
• CAT6 cables were poorly crimped, so I had to get them recrimped.
• CAT6 cables were not labeled in the master bedroom - I had to figure everything out by trial and error.
• Half of my windows had to be replaced due to various imperfections at installation. Most of these were replaced under warranty.
• Significant amount of repainting. Lots of yellow dye spots from the dry wall.
• Issue with the cabinet nails sticking out, which was fixed by removing some unnecessary wood.
• Various lights had to be fixed in the hallway.

Post-Purchase Upgrades & Installations

Here’s a list of key post-purchase upgrades and installations that I did after I moved in:

• Epoxy garage - doing myself was significantly cheaper than doing it through KB Home. The only problems was that I couldn’t park in my garage until this was done and my house smelled for a few days.
• Front door doorbell - the included doorbell system required a paid subscription, so I switched it to Wyze.
• Washer & Dryer - took 2 months for Best Buy to install because they could not get the correct people to come. KB Home only offered a really ugly washer & dryer, so I opted to buy my own.
• Refrigerator - bought my own to save costs.
• Blinds - bought my own for matching aesthetics.
• Water spout - KB Home only offered to drill the hole, so I had to buy my own matching Moen water spout myself.

What I Love

• Exhaust fans - the house includes two QuietCool Whole Home Exhaust Fans, which are great at cooling or heating the house from outside air. Many times, this fan makes the HVAC unnecessary and saves a lot in cooling costs. The only problem with this fan is that the switches are not smart and do not support any remotes.
• Solar Panels and the Tesla Powerwall
• Most other things that were included are smart including my Phyn water leak detector, my water heater, and my Ecobee thermostats.
• The master bedroom, loft (which I made my office), and living room all had CAT6 hookups. The living room also included a ceiling WiFi hotspot!
• All the windows came tinted, which may be required by California now.

The Regrets

I only had one regret: not upgrading my dish washer. The included dish washer is very basic and misses a key function I want: setting a delay on when to wash the dish washer. The main reason I want this is so that I can run the dishes overnight when electricity is cheapest.

Tips for Buying New Construction

• It took a month to get my bins. Fortunately, KB Home let us use their construction dumpsters. After multiple calls and escalations, I was directed to the Santa Ana office for Republic Services who gave me bins the next day. Call your local center!
  • As an aside, your waste management company may offer walk-out services, meaning they’ll get the trash out of your side yard for you!
• During your walk through, blue tape everything and blast the HVAC! Perhaps even blast the HVAC as the first step before even starting the walkthrough.

Perhaps the most important tip is to find a real estate agent to become your buyers agent that will split their commission with you. My friend gave me half his commission (while 1099’ing me) and all he had to do was sign his name. If you’re looking for someone to split a commission with in Southern California, let me know.

The Good

During this time, I had a fear that the Powerwall would not be there when I closed on my home because I’ve been hearing stories about Tesla Powerwall orders that were delayed for months. Fortunately, when I did a walkthrough a few weeks before I closed on my house, it was there! My solar panel’s PTO was also enabled before I closed, so I didn’t have to worry about it. Overall, I am pretty pleased with the buying process.

Additionally, what I really enjoyed with Swell is the customer service. Unlike Tesla, I can email someone and they’ll respond with an actual answer within a day. When you call Tesla for Powerwall support, expect to wait hours on the phone.

For those installing a system in California, Tesla already ran out of its SGIP credits whereas Swell Energy did not when I had my system installed, thus I was able to get the SGIP credits, which was $1,740 for me. Something to consider, but not a deal breaker when selecting a system, and these credits will eventually be depleted.

The Bad

$14,700 was a few grand more than the price Tesla was quoting online for a Tesla Powerwall, so it was definitely more expensive. However, I consider the higher price a way to jump the queue and make sure the Powerwall was installed before I closed. Additionally, the additional cost was partially offset by the SGIP credits I received. I am guessing Tesla prioritizes these third party sellers because either they pay more or prefer not having to worry about installation.

Even though Swell installs the Powerwall, you still have to contact Tesla for many Powerwall issues. For example, Tesla hid the Energy Exports option from me and Swell couldn’t help; they told me to call Tesla, which did in fact solve the problem. Ideally, Swell handled more of the customer service.

When installing the option, Swell did not explain the options to me. I didn’t realize, until I moved in, that my house was only partially backed up. I would’ve paid more to fully back up my house or at least install the system so that I could easily fully back up my home in the future (for example by installing a Span). Instead, I am simply left with sadness as a lot of the calculations and features on the Tesla app do not work properly for partially backed up homes.

As of this writing, my biggest struggle with Swell Energy is that they have an agreement with Tesla to not allow any of their customers to join a Tesla VPP. Because I am not in the Swell service area for their VPP (most likely because my home is new construction), I am currently unable to join any VPP. They have been discussing with Tesla about giving me an exemption to this agreement for weeks, which I have little hope for, as they have just stopped responding to my follow ups.

Would Not Recommend

Overall, I am pretty happy with Swell Energy. If you are getting a Tesla Powerwall from them, make sure you learn my lessons and ask questions about how much of your home is backed up, whether you’d be eligible for SGIP or other credits, and whether you can join their VPP. Perhaps the biggest reason I would use Swell Energy over Tesla is because I am a fan of Enphase Microinverters and have read way too many /r/TeslaSolar posts about Tesla’s inverters failing and their customer support sucking.

However, if I were to get solar again, I would just buy directly from Tesla. It’s cheaper, you can join the VPP, you can get the new Powerwall 3, and Tesla’s inverters are fine. I don’t see the need of going to other solar companies.

If you decide to buy from Tesla, use my referral code! If you’re interested in installing from Swell Energy, let me refer you and I’ll give you a third of my commission!

Enable Time of Use

If you are on a time of use electric plan with your utility (which you should be doing when you have a Powerwall), enable the TOU option for the Powerwall to maximize savings. If you don’t have TOU with your current utility provider, look into switching to TOU. Solar panels and battery allow you to shift your energy usage and exports to the best times with time-of-use plans, maximizing the benefits of the system.

Lower Your Backup Reserve

Lower your reserve to the recommended 20%. You can risk going lower but you don’t want your Powerwall running out of energy if there is in fact an outage as low power can damage your Powerwall.

Edit the TOU Rates

The rates that Tesla provide aren’t accurate. For example, as I am on NEM 2.0, it had my buy and sell solar prices to be equal, which is not true. I am taxed about $0.03 per kw imported from the grid, which Tesla did not take into account. By adjusting the rates, the Powerwall became smarter and tried to minimize the amount of power I import from the grid by using as much of my solar as possible whereas before it assumed importing and exporting at any time was equivalent cost-wise.

Additionally, there may be additional taxes and fees not taken into account. For example, Santa Ana levies a 5.5% tax to my electricity bill, which is used to subsidize low income households. This tax is not taken into account by Tesla’s rates and have to be updated manually.

Export All Energy

By default, only solar will be exported to the grid when it is being generated. By selecting “Everything”, your Powerwall will export all its energy at the peak hours to maximize savings. This will cycle your Powerwall all the way to the reserve percentage you set above.

In the image above, my Powerwall is charged by solar during the day, then exports all its energy down to the backup reserve percentage during the peak hours of 4pm-9pm PT.

Enable Grid Charging

If you don’t have sufficient solar to charge your Powerwall, you’d want to enable grid charging to top off your battery. This will also enable Tesla to maximize your savings, especially if you’re on net metering.

However, you may be ineligible for this; I am ineligible for 5 years because I got an SGIP Rebate.

Watch Storm Watch

There is no control over when Storm Watch pulls energy from the grid. For example, if a storm watch alert comes in the middle of peak hours, your Powerwall will charge from the grid at peak hours at peak prices, which may cost you a lot of money. When you get a Storm Watch notification, skip it if it’s going to charge your battery during peak hours. Try enable/disabling/skipping as needed so that it’s charged off peak hours.

Join a VPP or Demand Response Program

Lastly, you’ll want to join one of the many virtual power plants. This is similar to above where you export all your Powerwall energy to the grid, but with VPP events, you will export the energy at a time requested by your electricity company and receive extra money to partipate, usually an extra $2 per kwh.

If you’re ineligible for a VPP like me, join a demand response program like OhmConnect. I earn about $7 per OhmConnect event and they occur throughout the year (at least 3x per month), yielding a higher return than VPP seasons as VPP events are becoming less common.

Interested in buying Tesla Solar and/or Powerwall? Use my referral code!

Sign up to OhmConnect with my referral link.

I have about $450 in credit remaining with them, which they won’t refund me all at once. Instead, they are refunding me $5.17 per month, but are also requiring me to subscribe to their $5/month plan. I have to subscribe to their services for another 87 months or 7 years to get my full refund. This in turn makes the refunds useless except for the additional credit card rewards I receive (since Southern California Edison does not allow automatic credit card payments). These credit card rewards are about $4/month, assuming 2% cash back on an average $200/month electricity bill.

I picked up my vehicle on September 9th, 2021. I saw Jason Bateman there picking up his car while I was there! My options list is as follows:

Enhanced Autopilot included basic autopilot at this time (it’s standard now). Note that this was during $7,500 federal tax credits and $2,500 California tax credits.

Initial Issues

When I picked up my car, I was too excited to check every detail. However, I noticed these issues almost immediately:

• The left tail light was not working. Mobile service replaced it, but it did not solve it since the issue extended past the tail light; the light on the trunk adjacent to the tail light did not work either. One day, it started working, I am guessing due to a software update.
• Doors are not fully aligned. However, the dealership said that it’s “within spec”.

When you pick up your Tesla, check for any issues because its craftsmanship sucks.

Aftermarket Accessories

These are the only accessories I got for my car:

• Tint $1,350 for the whole car for 3M Crystalline: 70% on the windshield, 35% everywhere else I believe. Unfortunately, this was not dark enough because you can basically see everything inside the car due to my white seats.
• Wireless charger + battery + USB drive: my car didn’t come with a wireless charger, so I bought an aftermarket one for about $150. Unfortunately, to use the wireless charger and a USB drive for my dashcam, I had to buy a pass-through battery to be able to power all 3 USB cables.

Registration fees

My history of registration fees in California:

Services

These are all the service invoices I have from Tesla. I think I am missing a few as Tesla was updating their system in 2018-2019 and I can no longer access the invoices.

Most of my maintenace are from the tires, which luckily lasted more than 45,000 miles before Tesla recommended changing them! They lasted much longer than I expected given that I drive very aggressively. The tire rotation and wheel alignment costs significantly varied throughout all the service appointments, but I didn’t really care since I got those sweet Uber credits. I also get very annoyed if I feel like my alignment is off, so you may not need so many wheel alignments.

Be sure to get service before your 4 year warranty ends! They replaced my 12V battery for free before my warranty expired since I didn’t want another dead 12V battery again.

Missing Services

• Two flat tires, one of which was fixed by Tesla (I think around $200) and another which was fixed by Pep Boys or a similar store (I think around $100)
• A broken window due to a break-in. I think this was around $400 to fix, plus I had to re-tint.
• Two Tesla services before 2019/12/9 that I cannot access the PDF for

Every time I called Tesla roadside assistance, they weren’t able to fix my flat. The first time was because they didn’t have a spare 19" wheel for me to swap even though I was right next to the service center, so they just towed my car to a service center. The second time was because I was in Big Bear and they didn’t have service there, so I towed my car to a tire center with my AAA membership.

Battery Degradation

According to Tessie, after about 4.5 years and about 51,000 miles, my battery degraded 10.5%. This is a little bit more than average, but I feel like it’s degraded more. Currently, the app estimates my full range to be about 270 miles, which is about the same as a brand new standard Tesla Model 3, except you can use the entire LFP battery range on the standard.

Trade-In Values

I continuously looked for a new car, so also looked up my car’s trade-in value with Tesla a couple of times:

I should’ve sold my car during COVID!

What I’d do differently

• Don’t upgrade rims. I drive recklessly and have curbed them multiple times. Additionally, they decrease your range by about 2%.
• Don’t get FSD, it sucks. If you need it, just subscribe, but all I need is basic autopilot.

Next Step

I have no regrets buying my car. I didn’t love it and was always looking for a better car, but there wasn’t one out there. I am planning to trade-in my car before my warranty expires in 2026 for the next best EV: a GMC Hummer EV, Tesla Cybertruck, or a Porsche Boxster EV. Just looking at production schedules, it’s looking like my next car will be the Cybertruck.

August 2023 Update

After I wrote this article, my car’s onboard AC charger broke and my car started to only charge at 16A (half-rate) at home. The Tesla Service center quoted me $2k to fix it, which I did not want to pay. Unfortunately, my car was out of warranty, otherwise I would’ve just purchased the extended warranty and fixed it through that. Instead, I sold my car to Shift for about $28k and bought a brand new Tesla Model Y for about $52k before any taxes.

Interested in buying a Tesla? Use my referral code!

Goal

The primary reason was I got a Powerwall was that if I didn’t, I would be thinking about getting one every day, which would take up a lot of brain capacity. The cost of using my brain capacity on it would cost much more than the amortized cost of purchasing the Powerwall, as you’ll see below. The second goal was for cost savings, especially since the builder wouldn’t allow me to add more solar panels.

The final goal was for backup during outages as I experienced quite a few outages living in Westwood, Los Angeles. Interestingly, I found SCE to be a much more reliable electricity provider than LADWP. Even if I broke even in cost savings, I’ll be happying knowing that I won’t be susceptible to power outages except for a few appliances.

Set up

I was disappointed with how my Powerwall was set up because it did not provide whole-home back up to my fully electric house. Instead, it was set up as a partial-backup with the following bypassed:

• EV chargers
• HVAC
• Washer & dryer
• Water heater

I don’t mind that my EV chargers bypass the Powerwall, but was quite disappointed to learn that my HVAC, washer/dryer, and water heater were. I can choose to charge my EV at night, but being price sensitive to running the AC, running the washer/dryer, or taking a shower during the peak hours of 4pm-9pm is quite annoying. If the Powerwall backed up my HVAC and washer/dryer as well, I would be saving a lot more money.

However, I don’t think a whole-home backup would even be possible with just one Powerwall. There’s no mechanism for it to communicate with the other appliances (except for the EV) to turn off or lower power usage during an outage, so there’s a chance that the appliances would pull too much energy and break something. You’d most likely need multiple Powerwalls to make sure this doesn’t happen as well as more solar panels to charge them.

Time-of-use

For Southern California Edison, the peak hours are between 4pm and 9pm, which is around when solar panels stop generating electricity. The Powerwall’s time-of-use operational mode does a great job at maximize savings by:

1. Charging the Powerwall during off-peak hours
2. Discharging the Powerwall to the house during on-peak hours
3. Exporting all solar energy to the grid during on-peak hours

#1 & #2 saves the ~$0.30 difference per kw between on-peak and off-peak pricing. Thus, if I offset 4kw that day, that’s $1.20 saved!

#3 exports all the energy generated by the solar panels to the grid. If you only had solar panels (i.e. no Powerwall) that generated, say, 5kw during the peak hours, but your house used 3kw, your solar panels would only export 2kw to the grid at the on-peak rates. However, with a Powerwall, the 5kw will be exported to the grid at the on-peak rate and the 3kw used by your house will be discharged from the Powerwall using an off-peak rate, maximizing savings!

Monthly Solar Generation and Powerwall Discharge

My monthly solar generation and Powerwall discharge according to the Tesla app, which only includes electricity that passes through the Powerwall:

Note that these are winter months, so the solar generation should increase significantly in the summer months.

Tax Rebates

In total, I was able to get $9,072 in rebates from my $24,440 ($9,740 + $14,700) system, making the net price of the system to be $15,368.

Federal

The U.S. governments provides a 30% tax credit on solar, which I took for both my solar panels and Powerwall. This amounted to $24,440 * 30% = $7,332. The rebate for the Powerwall alone was $4,410.

California

SGIP is a California program that incentivizes installing energy storage systems. My Powerwall was only eligible for a $1,740 rebate.

Monthly Savings & ROI

Let’s calculate how much the Powerwall is saving me and whether it was worth it. The Powerwall cost $14,700, which I was able to bundle into my 30 year, 3.75% mortgage. This ends up being about $68.08 per month with interest.

After the tax rebates of $4,410 and $1,740 for my Powerwall, the net price is $8,550. Even though I amortized the Powerwall over 30 years at a low interest rate, I got a rebate for almost 42% of it within the first year! The $6,150 rebate’s portion of the loan is like taking out a tax-deductible loan at 3.75%, which I would happily take at this time, so we can consider it income positive and ignore it for the rest of the calculations.

Due to the rebates, to break even, we can lower our target monthly savings of $68.08 to $39.60, which is how much a 30 year loan for $8,550 at 3.75% is. Cost-shifting 150 kWh every month at a price difference of about $0.30 equals $45 per month saved just from the Powerwall. It’s worth it, currently barely, but the savings should increase in the future as the price difference in on-peak and off-peak increases as CA adds more solar panels.

If it weren’t for the tax credits, this would not be economically feasible at all. Mortgage interest rates reaching 6% also makes it economically infeasible. If you aren’t able to roll it into your mortgage like I did, it would probably be economically infeasible as well as the rates are probably higher, the loan term is probably shorter, and the interest wouldn’t be tax-deductible.

Extra Savings I Skipped

Because the loan for the Powerwall is rolled into my mortgage, the interest portion is tax-deductible up to a limit. $14,700 over 30 years at 0% interest is about $40.83/month, so the payment’s average interest portion of about $68.08 - $40.83 = $27.25 is tax-deductible.

Additionally, the Powerwall allows my solar panels to return more energy to the grid during peak hours. However, it would be difficult for me to calculate how much money this actually saved me because I don’t have easily-accessible hourly data.

Also, note that the solar panels and the Powerwall are excluded from property tax assessments. Not really a savings, just not an additional cost.

Monthly Savings According to Tesla

The Tesla app tells me an estimate amount of savings of my entire system. The numbers also don’t add up - a lot of times, it says that I used grid energy during peak hours, but individual days don’t show an grid energy usage during peak hours. I just don’t bother looking at Tesla’s estimated savings number at all.

I’m pretty sure I am saving more than what Tesla tells me since the amount of electricity generated from my solar panels for the month alone almost adds up to the estimated savings Tesla shows.

Other Features

Storm Watch

Tesla has a Storm Watch feature which fully charges your battery before a storm. However, I live in Santa Ana, and every Santa Ana Wind triggers a Storm Watch, which is quite often and quite annoying. Additionally, Storm Watch overrides the Time of Use plan, so it may charge your battery at peak hours, costing quite a bit of money. I disabled it and only enable it temporarily when I want to fully chage my Powerwall from the grid.

EV Charging when Off-Grid

The Powerwall has a setting for how to charge your EV during an outage. However, as mentioned above, my EV chargers bypass my Powerwall, and there is no setting to disable this. Of course, this really doesn’t matter because my EV wouldn’t charge during an outage, but it is annoying that I can’t disable it.

Worth it for me, maybe not for you

Overall, I am happy with my purchase, but it would be difficult for me to recommend it for most people from a cost-savings perspective. Like I mentioned above, this is only economically feasible for me because I was able to roll it into my 30 year mortgage with a low interest rate.

Interested in buying a Tesla Powerwall? Use my referral code!

iPhone Upgrade Program vs. Apple Card Financing

The iPhone Upgrade Program uses loans through Citizens Bank whereas financing through the Apple Card is essentially carrying a balance on your credit card. There are pros and cons to both

• I have several loans through Citizens Bank and, as far as I can tell, none of them show up on my credit report. On the other hand, my Apple Card shows up on my credit report.
• Citizen’s user interface is very confusing whereas my Apple Card is on autopay and I don’t even think about it.
• Additionally, you can use your Apple Card as a payment method for your Citizen’s loans to get the 3% rewards.

Thus, unless you are worried about your credit utilization on your Apple Card, financing on your Apple Card is much better.

Sales Tax

When you upgrade your phone, you have to pay sales tax on the entire product, which you can’t finance. For me, this is about a 10% sales tax in California on every upgrade. You may think that you are paying the same amount every year, but you’ll probably forget about sales tax!

Trade-in Value

With the iPhone Upgrade Program, you are effectively trading in your device at 50% of the cost every year. The MSRP for my iPhone Pro 12 Max 256GB was $1,199 last year, and Apple is offering me $790 to trade in. With the iPhone Upgrade Program, the effective trade-in value is $600. Thus, Apple is making $190 more per phone through the iPhone Upgrade Program than from regular trade-ins.

Apple Care

The iPhone Upgrade Program requires you to subscribe to AppleCare, but it’s exactly the same price as subscribing to it on your own. Additionally, if you don’t use the iPhone Upgrade Program, you could cancel your AppleCare subscription anytime. I always buy AppleCare because I am very careless with my phone, so to me this is equivalent.

Accessories

Every time you a new phone, you probably need to buy a new case for it too. I do because I am very careless with my phone. Apple accessories are expensive - $49 per case - and can also be financed. Additionally, I’ve never had a case that lasted more than a year, so I end up buying at least two cases per phone. Consider all the additional accessories you need to buy when upgrading your phone.

To upgrade or not?

Going forward, I am going to stick with Apple Card Installment Plans, subscribe to AppleCare monthly, and trade my phone in whenever I want to upgrade. I am going to let my current iPhone Upgrade Plan expire and never use it again.

2023 Addition: Trade-In Promotions

With the release of the Apple iPhone 15 in 2023, many wireless providers had really good trade-in promotions. Here’s the promotion I took advantage from AT&T:

I traded-in my Apple iPhone 13, which was about 1.5 years old at the time and valued at around $600, for $1,000 to AT&T, netting me an additional $400 in value. I essentially used my 13 for 2 years for about $300, which is a great deal. Additionally, my payment term is over 3 years, so I’m paying about $6/month for 3 years for my iPhone 15 Pro Max. I don’t know how often these promotions come along, but they provide the best value.

The only negative with trading in directly to a service provider is that your device will be locked to that carrier. This means that you won’t be able to add an additional line to your account such as when you are traveling. For example, I was unable to set up Google Fi as a second line on my phone for traveling. Instead, I just got a cheap Android phone as a second SIM.

1. To try out investing in solar since I cannot install solar panels in my condo.
2. Hit some credit card minimum spends.

During this time, they promised $600 in savings over 10 years, which is a return of more than 2% annually. This is pretty good considering I would be getting a few percent return from my credit card rewards and also earn minimum sign-up bonus. If you need to manufacture spend, want to invest in renewable energy, and are okay with a long-term returns, Arcadia may be good option for you.

How it works

Arcadia is a middleman for your utilities: you pay Arcadia, who then pays your utility. This is especially a benefit for utilities that do not take utilities - I use Arcadia for my dad’s SCE account as SCE does not support autopay by credit card - I pay it through Arcadia with a Barclays Wyndham Rewards Earner Business Card which earns 5x on utilities. This more than covers the $5/month Arcadia charges to use its service, which essentially just buys Renewable Energy Credits.

On top of just buyin RECs, Arcadia allows investing in community solar in certain areas. I was able to buy community solar in Massachusets last year, but community solar doesn’t seem to be available in California anymore. Previously, I was able to see a nice dashboard of my community solar subscription, but they seem to have removed this dashboard as they no longer allow community solar subscriptions to California residents. Here’s what I see when I login to the community solar page on my account, even though I currently subscribe to community solar:

A benefit of being grandfathered in to the old community solar subscription is that I no longer have to pay the $5/month fee, so this is a big win for me, especially if I end up moving to a region serviced by SCE.

Tracking community solar savings

Because the web page for community solar no longer works for me, I have to track my savings through the monthly email I receive from Arcadia. I’ve created a public spreadsheet to track my community solar savings. I am told that they are working on a new community solar dashboard.

Over the past year, I’ve saved $56.24 on my electricity bill. If I extrapolate this to the full ten years of my subscription, that’s $562.40, just shy of the promised $600. Given that I have an expected overall savings from my subscription and have helped a renewable energy project, I am pretty happy about my investment.

Use my referral link to sign up with Arcadia: https://www.arcadia.com/referral/?promo=jonathan1680

2023 Update

Arcadia has shut down their Community Solar offering.

However, First Republic doesn’t explicitly say whether they charge currency exchange fees, but they did say they don’t charge any fees. So, I tried it out by withdrawing money from both my First Republic and Schwab accounts and calculating the effective exchange rates.

Both First Republic and Schwab used the same exchange rate, did not charge any currency conversion fees, and reimbursed me for the €3.95 ATM fee. At the same time, I looked up the Wise exchange rate, which was much better. However, Wise does not reimburse ATM fees and charges 2%+ for withdrawals over $100, which makes it more expensive overall.

Overall, I am happy with my First Republic and Schwab accounts and still haven’t found a use for my Wise account.

Home Equity Line of Credit

The first method I found was a home equity line of credit, which is basically a loan against the equity you have in your home. Unfortunately, I just refinanced my home to an 80% LTV and, during the COVID pandemic, no one was allowing HELOC loans that would make the total loan amount above 80% LTV. Thus, I was out of luck.

Additionally, I couldn’t find any HELOC loans that were competitive with my ~3% interest rate mortgage, so I stopped looking for HELOC loans. Generally, a cash-out refinance would be better than a HELOC loan if you haven’t done so already. Of course, relying on a HELOC won’t work if you don’t have a home to begin with.

Portfolio Margin Loans

Instead of borrowing against your home, you can borrow against your stocks. Margin loans are sometimes marketed as a means to borrow to buy stock, but you can actually use it to borrow against stocks you already have. However, if your portfolio loses money, your stocks may be margin-called and automatically sold, so you need to be aware of this risk. I don’t recommend using margin to buy stocks (though it is helpful when you are trading stocks before the stock transactions settle).

An additional benefit of portfolio margin loans is that these loans do not show up on your credit report. There are also no fees other than the interest paid.

The lowest margin rate I found was Interactive Brokers’ rate of 2.6%. However, my favorite portfolio line of credit is Wealthfront’s Personal Line of Credit, which has a maximum interest rate of 3.7%. You can easily borrow up to 30% of your portfolio, which I’ve been doing for monthly cashflow adjustments to keep my cash low.

Sign up for Wealthfront and get $5,000 managed for free.

Personal Line of Credit

NOTE: First Republic went bankrupt, so this personal line of credit is not offered anymore.

HELOCs and portfolio margin loans are backed by your assets, but there are lines of credits more similar to credit cards that don’t need to backed by assets called unsecured personal lines of credit. Luckily, I found the First Republic PLOC, which had a very low rate of 2.25%.

There are, however, downsides to this PLOC. You have to maintain about 20% of your PLOC credit in your First Republic checking account, which meant that I had to move my primary checking account to First Republic (otherwise, I would just have more cash in another checking account). First Republic as my primary checking account has been fine so far, even moving from Schwab checking which provided more features. After all, this PLOC is a way for First Republic to attain customers with great credit.

I also had to stick with the 7 year payback period (after the 2 year draw period), which is the lowest payback period offered, but provided the lowest interest rate. Additionally, I just applied for the lowest PLOC amount of $60k, but you can go higher. These terms were fine for me - $60k is more than enough and I’ll just have to sign up for another PLOC every 2 years.

However, your PLOC is not guaranteed. Wells Fargo recently shut down all their PLOCs, which could happen if the banks find these lines of credits too risky. Don’t rely on only a PLOC for your emergency fund.

O% APR Credit Cards

Lastly, a strategy you can use when you need cash is to apply for a 0% APR credit card. This might not always work for you, especially if the emergency you are experiencing negatively affects your credit, making it more difficult for you to apply for more credit. However, buying what you need on a 0% APR credit card, then paying your credit card after the promotional period with another line of credit would be a wise strategy.

Use Lines of Credit Wisely

This doesn’t necessarily I am getting rid of my emergency fund, but instead augmenting it with multiple lines of credit to allow a smaller emergency fund and access to a larger amount of funds if the need ever arises. These lines of credit allow me to quickly pay any emergencies while giving me time to assess my financial situation with a low interest rate. For example, I may have to pay a large hospital bill with a personal line of credit, then assess how to sell my stocks in a tax-conscious manner to pay off my personal line of credit over the next few months.

Additionally, my lower emergency fund is not offset by increased spending, but by increased investing, which allows me to have a larger portfolio loan credit limit.