10 Tips to Help You Compare Solar Proposals

10 Tips to Help You Compare Solar Proposals

Lately, we've had a few potential customers call asking us for that free solar they heard about on social media, or from the flyer that was stuck in their front door handle. Well, it wasn't us putting that misleading info out there, but since we're getting this question more often we thought we'd share some ideas about things to look for when you're researching solar for your home. 

Is the installer luring you in with a promise of free residential solar, or a solar lease, in Virginia?

We're always committed to being upfront with you about what is actually possible, legal, and realistic when you call us, and we can assure you that in Virginia there is no such thing as free residential solar. Solar installations are governed by state laws as well as building codes, and in VA, the law clearly states that residential Power Purchase Agreements (PPAs) are not allowed. If you have a commercial or tax-exempt property we're happy to talk PPAs with you, but otherwise, the financing options are very clear:
  • Pay cash
  • Take out a Home Equity Line of Credit and pay through that
  • Use a bank loan (see below for more about the various types of loans and what to watch out for)

In Maryland and Washington DC, the options are more varied so if you live there and would like to see if you qualify, we're happy to help you check it out. 

Fees for financing your solar should be transparent

Watch out for low interest rate loans. Usually, a 1-2% interest rate means there are hidden fees somewhere else. When your proposal offers you a low interest rate like this, check to see what your "dealer fees" or closing costs are for the loan. Likely they'll add up to a higher amount over time than a higher interest rate loan, because those fees are padded to give the bank providing the loan a profit.
We never offer loans with dealer fees because we think it's important for the cost of your solar to be fully transparent. We also only work with Clean Energy Credit Union so you know that your loan is going to help the planet, not line a bank shareholder's pockets. Make sure you have a line by line breakdown of all fees and costs associated with your solar proposal. 

Is there a guarantee for solar production estimates?

This is a major question you should be asking each company that offers you a solar proposal. Your biggest risk in going solar is that the system doesn’t perform as it was designed and sold to. We firmly believe that the homeowner should not be liable for the risk that their system was advertised to produce more than what is physically possible given their roof, shading, and location.

As a solar installer that cares deeply about customer care, we back our production estimates with a 95% performance guarantee. We’re only able to do this because we perform an in-depth solar evaluation on each home, which allows us to determine how the shading, roof pitch, and location of the home will impact the system’s production. Unfortunately this isn’t an industry standard yet, but we hope other installers will get on board!

If your system does not come with a production guarantee, you’ll be on the hook if it doesn’t live up to expectations. We hate to read heartbreaking solar stories where homeowners have been left in the dark by a shady installer.

Check the warranties

When evaluating warranties on your proposal, there are a few specific things you should look for:

  • What are the warranty lengths? This should be obvious on the proposal and data sheets provided by the contractor.
  • What does the warranty cover?  If there is a warranty claim, how is the customer reimbursed?
  • Who is backing the warranty?  It's important to have the equipment warranties backed by the manufacturers and to have the workmanship backed by the company that does the installation (for example, the modules backed by one company, the inverters backed by another company, and the workmanship backed by the installer).

The Projected Inflation of your Electric Rates

Most solar proposals will show you your electric savings.  That is the amount of money you’ll save on your electric bill by going solar.  This is known as your electric savings rate or avoided-cost of electricity. It is very easy to calculate in the current year, as the cost of electricity is taken directly from your utility bill.  The challenge, however, is predicting the cost of electricity (your savings) in the future.

To project the lifetime solar savings potential for your system, the installer must know your current energy rate. If this number is wrong, the accuracy of their estimate of the financial benefit of the system will be off since this rate is used when calculating your avoided energy costs and savings over time. It is common that national installers simply take the national average of electric cost, thus inflating saving 20-40% above reality.

Most solar proposals will include an escalator in the cash flow of your electric savings rate. At Ipsun, we use historical data from the United States Energy Information Administration. We use state-specific information to give you the most accurate and conservative projections possible.  If your electric inflation rate is artificially inflated, your electric savings be artificially inflated as well.  Make sure the electric inflation rate shown on your proposal is appropriate for your state. In the DMV region, we typically show electric inflation rates between 2% and 3%.

Are model names clearly defined and are products sourced from a reputable manufacturer?

A list of components should be included in your proposal.  That list should include the quantity, brand, and watts of the solar panels, the quantity and brand of the inverters, and the type of racking system.  

When evaluating the products, it's important to keep a few things in mind to ensure you're starting off with a solid base for your investment:

  • Sourcing: As much as possible, it's important to trace the source of equipment to ensure it's made by workers who are being treated fairly. Panels made in the United States are obviously a bonus, as long as they're being produced by a reputable, proven manufacturer like Qcells
  • Quality: Solar modules, inverters, and racking are expected to work for 10-40 years. They should be top-quality products with a robust warranty.
  • Manufacturer Stability: Since the solar industry is volatile, it's important to partner with manufacturers who have a track record of great customer service and financial stability. Additionally, your solar installer should have a long-term relationship with the companies whose products they provide.
  • Product Relevance: Products in the solar industry are constantly changing. Be sure your solar installer is offering you a product that is up-to-date. If they're offering you an older product, make sure it is at a discounted rate.

Does the proposal clearly outline the warranties included with your system? Will the company be around to support you in 15+ years?

Don’t rely on solar price comparison sites

There are companies out there that want to make the home solar buying process a little bit like picking a flight or a hotel. We think this oversimplified approach is bad for the consumer because it emphasizes price over everything else.

It might be okay to just go with the cheapest option if you’re renting a car for the weekend. After all, one rental Toyota Corolla is the same as any other. But a home solar array is a sophisticated system with many different components that must work together seamlessly. The installation process also requires coordination with your utility, permitting from one or more local authorities, and paperwork.

A good solar installer will coordinate all of this, leaving little for the homeowner to do. But with a complicated process going on behind the scenes, there are many opportunities for an installer to screw up. If one company is offering rock-bottom prices, you should ask yourself what corners they might be cutting.

Check that your contractor is licensed

The Interstate Renewable Energy Council maintains a web page where you can look up the solar licensing requirements for your state. Some states require specialized solar installer licenses, while others will let a contractor install solar panels with an electrician’s license. In some states, a general contractor’s license is fine. There are even states where no license is required at all. Check the IREC site, but read it closely because solar photovoltaic installation (for generating electricity) usually has different licensing requirements than solar thermal (for hot water).

If a license is required, ask the company for their license number because many states, like Virginia, allow you to verify licenses online.

Online license databases might report only minimal information, such as whether a license is current and valid. Others have more detailed information including reportable license violations by the company. Be aware that violations differ in severity, and having a violation on record doesn’t mean that you should automatically reject that company from your list. If you have concerns about a reported violation, don’t be shy about asking the company to explain it.

In addition to the mandatory licensing, you also want to know if the solar installer is NABCEP board certified. This is an optional industry certification, but having it is another check that the company is well qualified to do the work.

Honesty is the best policy when it comes to your home's suitability for solar

A good company will tell you that your roof needs fixing first, or that your house doesn’t get enough sunlight for solar panels to make sense. They would rather walk away than sell you a system that isn’t going to work properly.

But a less scrupulous company just wants to make the sale. So if you get three quotes, and two companies tell you that solar isn’t going to work while the third tells you to go for it, you should probably go with the majority opinion.

Having multiple quotes also lets you compare different equipment choices and installation approaches.

For example, one of the underappreciated details of a solar installation is how the racking is secured to the roof and made to be waterproof. Solar installers have varying levels of experience, especially when it comes to more challenging roofing materials.

 If one contractor is dismissive and gives vague answers, while another patiently gives detailed answers to all of your questions, that’s one way to tell a good contractor from a poor one.

Walk away from high-pressure sales tactics

High-pressure sales tactics are becoming more frequent from big box solar companies, and this is often a sign that a company is putting sales volumes ahead of quality.

What are high-pressure sales tactics? Here are some examples of things to watch out for:

  • Door-to-door or telemarketing sales, especially those that prey on the elderly
  • Pushing the customer to go with “no-money-down” financing schemes (leases and PPAs)
  • Encouraging the customer to quickly sign a contract because the "special deal" ends soon, instead of letting them carefully study it on their own and decide when they're ready
  • A company tells you that solar will be great for your home while other companies tell you otherwise

Top takeaways

  • Be sure to ask about all of the fees, and for a full breakdown of the cost
  • Review whether the installer is established in the DMV and understands local policies and procedures
  • Determine if their company history indicates whether they will be here for the long run
  • Don’t hesitate to collect several quotes for comparison, with some from local installers

Over the past few years, there’s been an influx of national solar companies using aggressive techniques to sell solar. We’re hearing more and more stories of people feeling pressured to buy, often with misinformation about the typical cost and process of purchasing a solar system. If you’ve gotten a proposal that doesn’t feel right to you, trust your gut and get multiple quotes. We’re here to answer any questions, anytime — No pressure!

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