Now that you’ve gotten some solar quotes, how do you choose which one is best for your home?
This guide will help you through the decision-making process. We recommend you to use a checklist. This is the best way of managing any major home renovation, and a solar installation really isn’t any different. Download our Solar Quote Evaluation Checklist.
The three key steps to compare solar quotes:
- Warranties (equipment and installation company)
- Pricing
- Other factors
1. WARRANTIES
A. EQUIPMENT WARRANTIES
Solar Panels
All solar panels come with 2 warranties:
- Performance warranty. All solar panels have a 25 year performance warranty and this is the less important warranty as It’s easy for the manufacturer to get out of.
- Manufacturer’s product warranty. The warranty that really matters. so this is what you should compare on. Premium panels (LG, Solaria, Silfab, Panasonic, Sunpower, and the new model G6+ from QCell) offer 25 years product warranty while Tier 1 panels ( Canadian, Trina, Longi…) only offer 1-12 years.
Inverters
The inverter is the most critical piece of the whole system, and will often have a bigger impact on performance than the panels.
There are three kinds of inverters:
- String inverters: Not as shade-tolerant and do not allow you to monitor each panel’s performance. 10 – 12 year warranty.
- Microinverters: Great shade-tolerance. Allow panel-level monitoring. 25 year warranty.
- Optimizers function similarly to microinverters but you still need a single inverter to convert the energy to AC (alternating current). Optimizers 25 year warranty, Inverter 10-12 years. You can extend this warranty for an extra cost.
In most cases, the labor cost of the replacing a bad solar panel on your roof is higher than the cost of the panel itself.
The product warranty is key because equipment replacements and labor cost are covered by the manufacturer.
B. COMPANY WARRANTIES
ENERGY PRODUCTION WARRANTY
This is the most important warranty for you as a solar system owner.
Your proposal will include an estimated annual electricity production in kilowatt hours.
Reputable companies include a warranty in their agreements that guarantees your annual electricity production. This warranty will protect you against any false information, miss calculation or installation failure. If the system does not meet the expected production, the company should add more panels or reimburse you for the difference in production cost.
Few companies offer this warranty and the reputable ones will go until 25 years. Always ask for confirmation about this warranty and to have it in writing in your installation agreement.
Beware that some installers indicate the performance warranty of the panels will cover this, which is absolutely not true. Panel performance is not the same of Energy production Warranty.
WORKMANSHIP AND ROOF WARRANTIES
Fortunately, solar panel systems require very little maintenance over their lifetime. That said, installer warranty offers are still an important factor to consider on the off chance you find yourself needing repairs to your solar panel system.
All solar quotes should include information about the duration of an installer’s workmanship warranty. Today, the industry standard for a warranty is 10 years, but some companies offer as much as 25 years of coverage for both workmanship and roof penetrations.
2. PRICING
“Cheap it is not always better A company might cut costs where you don’t want to. Everybody likes to save money, but don’t automatically go with the cheapest contractor.”
A. ALWAYS COMPARE CASH PRICES
Comparing prices is not always easy. The best way to compare is always using installer cash prices, as loans could have financing fees or buy down APR fees (check below).
Ask for the cash price and calculate the PPW or $ per Watt. To calculate this, multiply the number of solar panels by the wattage of each panel. This figure is the total wattage of the system or system size. Next, divide the total price (gross price) of the system by the total wattage. This figure is the system’s price per watt (PPW).
Let’s say you’re quoted a price of $18,000 before incentives (gross price). If the quote is for 20 panels of 300 watts each, the total wattage is 6000-watt (6 kW system size). So $18,000 divided by 6,000 watts comes to $3 per watt.
B. COMPARE LOAN TYPES
There are two kinds of loans:
- Secured loans (PACE programs) use the equity of your home and use your house as collateral.
- Unsecured loans are only tied to the equipment itself and based on your credit score (most of them with $0 down).
C. COMPARE LOAN MONTHLY PAYMENTS
Lenders usually offer unsecured loans at a very high interest rate (5.99%, 6.99%…..) but they also allow your installer to buy down the APR to as low as 2.99%. This buy down is a one time fee added to your loan, which will increase the initial loan amount. But this will yield the lowest payment and amount of interest paid over the length of the loan.
For example:
Let’s say your cash price is $18,000 and you want to finance it for 12 years.
|
Without buy down |
With Buy Down |
APR |
6.99% |
2.99% |
Loan Term (Years) |
12 |
12 |
Total Loan |
$18,000 |
$19,257 |
Tax Credit |
$4,680 |
$5,007 |
Net Cost |
$13,320 |
$14,250 |
Monthly Payment |
$185 |
$159 |
Total payments in 12 years |
$26,642 |
$22,942 |
As you can see buying down your APR saves you $3,700 over 12 years, even when your initial amount financed was $1,257 more expensive.
Always calculate how much you will end up paying with financing provided by the companies you are comparing. A bigger initial amount with a lower APR could save you thousands of dollars.
3. OTHER FACTORS
A. CUSTOMER SERVICE
Who is managing your solar installation ?
Most solar companies hire sales people and have an 800 number for their customer service. Once the sale is finished the sales person makes his commission and moves on to the next customer. Sales people have a high turn over rate and are difficult to communicate with directly, especially if issues arise in the future.
Smaller contractors have an in-house employee who makes the quotes for them as well as other administrative tasks.
Reputable companies have their project managers handling the entire process from start to finish, making it easy to have your questions answered promptly by a qualified and experienced professional.
B. REVIEWS AND REFERENCES
While comparing the relative benefits of your solar energy system’s physical components is important, you should also consider solar company reviews. Get references from sources like Yelp and ask for other customers’ experiences.
C. MONITORING
Knowing how much solar power you are generating is a key part of owning a solar system, so make sure that you know what type of monitoring system you will be getting. Usually you can check your energy production on a website or smartphone app, but sometimes your monitoring might be more basic, such as an LCD display on the inverter. Depending on the inverter manufacturer, smartphone monitoring might be an additional cost, so make sure that you understand this from the installer.
Does your installer monitor your energy production? If you have a production warranty, it is likely your installer is covering the monitoring for you. If you don’t, you must check constantly if your system produces energy or not. A week or two without any production in summer time, for example, will affect your yearly production.
D. OTHER SERVICES
Is your contractor able to offer other solutions if there are any hidden issues discovered during the in-person assessment? How about getting a new roof, upgrading your main electrical panel, installing a new AC unit, EV charger, battery back-up or LED lighting?
For instance, you might have some rot in your roof that requires repairs before solar can be installed. Would you have to find a contractor to do this repair or will your company be able to provide this service for you?
It’s hard to fairly compare the costs of one quote versus another without understanding differences between installation companies, system sizes, and equipment quality. Use the checklist to analyze the right data.