While comparing quotes can be difficult in any arena, it is a particularly troublesome for homeowners going solar. Fortunately, there are a few short tricks that enable customers to accurately differentiate between competing bids. This article will break down the three key steps: 1) normalizing the numbers; 2) assessing the quality; and 3) analyzing the financing options. You can also use our one-page checklist for comparing quotes.
One of the most important steps in comparing the numbers in competing solar quotes is knowing what not to compare. There are many figures in a solar proposal that are great tools for illustrating the financial benefits of solar such as payback period (breakeven), return-on-investment (ROI), monthly savings, and lifetime savings. However, these figures are also subject to various assumptions about system production, utility inflation, module degradation, and utility rate (which isn’t actually an assumption but is something that is often overstated). To the extent these assumptions differ, a higher-priced system can look to yield greater savings than an equally-sized, lower cost system.
So how should prices be compared? The answer is actually the same method most people use for comparing items in a grocery store—price per unit. Similar to how a 24-pack of Coke costing $4.00 ($0.17/can) is a better deal than a 12-pack for $2.40 ($0.20/can), a larger solar system is often a better value even though the overall cost is higher. For solar systems, the relevant measure is the system’s price per watt (PPW). To calculate this, multiply the number of solar panels in the system by the wattage of each panel. This figure is the total wattage of the system. Next, divide the total price of the system by the total wattage. This figure is the system’s price per watt. Using this method makes it is easy to see how a system with thirty 300-watt panels for $27,000 ($3.00 per watt) is a better deal than a system with twenty 350-watt panels for $24,500 ($3.50 per watt).
Solar equipment, like cola, has quality considerations in addition to price. Fortunately, an abundance of research has been done assessing the quality of different solar system components. Because they have no moving parts, solar systems are exceptionally reliable and rarely have to be repaired. When repairs do occur, the leading causes in order are: 1) inverter malfunction (by an overwhelming majority); 2) field-made connections; 3) racking; and 4) solar panels.
The best defense against an inverter failing is to use a top-tier manufacturer. For rooftop system, this is either Enphase or SolarEdge. For ground mount systems and simple rooftop systems with full sunlight, the best manufacturers are Fronius, SMA, and SolarEdge. The chances of having a system error due to an installer or field-made connection can be reduced by using a highly-rated installer who guarantees to have a NABCEP Certified Professional on-site. NABCEP, or the North American Board of Certified Energy Practitioners is the organization in charge of certifying professionals with the highest level of experience, knowledge, and installation practices. As of writing, there are 122 NABCEP-certified PV Installers among DC, MD, and VA. State-by-state lists can be found on their site.
Racking and module failures are far rarer and are easy to avoid. The two important things to check for racking are: 1) whether they are using a twin-rail system (rail-less systems should not be used in high-wind environments); and 2) whether the racking attachment has passed the TAS 100-95 Wind Driven Rain Test (if it has, it will say so on the product brochure). While extremely rare, solar panels will sometimes malfunction. This would typically be found in cut-rate panels made by unrecognized manufacturers. Avoiding this is as easy as only accepting bids from installers using Tier 1 Modules, a list of which is appended to the aforementioned checklist. Along this topic, one common misconception is that higher-wattage panels are of higher quality than lower-wattage panels. Higher-wattage panels are useful for roofs with limited space, like a townhome, but do not have superior warranties or durability versus lower-wattage panels from the same manufacturer. The most important features are the total wattage of the system and the reliability of the panel being used.
When financing a system, there are four variables that can affect the payment of otherwise equivalent solar systems: 1) price per watt; 2) loan dealer fees or the difference between the system price and the loan amount; 3) loan interest rate or APR; and 4) loan duration. As an example, let’s say you have to compare an 8kW system at 3.10/watt with a 12% fee, a 5.99% APR, and a 20-year duration (payment = $141.22) against a 10kW system at $2.90 watt with a 20% fee, a 4.99% APR, and a 20-year duration (payment = $167.32). This can be done by calculating the financed price per watt (FPPW) of each system, which involves multiplying the monthly payment amount of the loan by 12 (months in a year), multiplying that number by the duration of the loan, and then dividing that number by the total wattage of the system. The lower the FPPW, the more solar you are getting per dollar spent. When using this trick, keep in mind that longer duration loans tend to have higher APRs so try to always compare options using loans with similar durations.
As always, if you have any questions, or are interested in getting a free quote for a solar power system, please contact us for more information.