4 tips on how to get the best deal on solar panels

Home solar panels have gotten a lot cheaper, but a system will still set you back several thousand dollars. Here are a few basic tips that will help you save some extra money.

Photo of a shopping cart full of money.

Everyone likes a good deal, but not everybody knows how to get one. This is especially true of home solar which, for most people, is unfamiliar territory.

Fortunately, the way to find a good deal on a home solar installation isn’t a lot different from any other major home renovation project. Read on for some simple tips you can follow before speaking to your local solar installer.

Tip 1: Know which incentives are available to you

One of the most important things to know as someone shopping for quotes on a home solar installation is the rebates available to you, especially tax incentives.

Everyone in the United States is eligible to claim the federal solar tax credit, sometimes known as the solar investment tax credit or - more formally for homeowners - the Residential Energy Efficient Property Credit.

This tax credit currently gives you 26% off the invoice price of your solar installation. It was renewed recently, and will be available at the current rate until the end of 2022. In 2023 the credit will be 22%, and then will disappear after that.

Some states, such as Iowa, New York and Massachusetts, also offer state income tax credits for solar. When combined with the federal tax credit, homeowners can get significant savings.

One important note though: these are not a direct rebate but tax credits, which means they are used to reduce your tax bill. If you don’t owe any taxes or owe less than the value of your credit, you won’t get the full benefit of these programs.

There may also be other state or local incentives available to you. You can use The Solar Nerd calculator to find out what these are, talk to your solar installer, or do your own research.

You can read our guide to solar rebates to learn more about all of this.

Tip 2: Treat financing as a separate product

Because the invoice price of a home solar system before incentives is typically between $10,000 and $20,000 - or even more - most people don’t pay cash. The most common approach is to take out a loan,which you pay down over time.

Many solar installers offer financing. It’s often convenient to go through your solar installer for a loan because you’ll have only one company to deal with. There’s nothing wrong with this, but you won’t necessarily get the best deal this way.

Instead, treat your loan as a separate product, which means shopping around for the best rate. Get a large enough loan so that you can pay off the full invoice of the project, and then pay off the loan over time. You can start with your own bank, or use an online service such as LendingTree or Bankrate to get multiple loan offers.

While some companies like Mosaic market “solar loans” there’s nothing special about a home solar installation that warrants a special loan category. In fact, Mosaic’s loan products are confusing and tend to steer consumers toward choices that result in higher total costs.

What should you do instead? Just get a conventional loan product such as home equity line of credit (HELOC) or home equity loan. These loans use your home as security, which means less risk for the lender and usually a lower rate for you.

What to do if your credit rating isn’t great

The main obstacles that consumers might encounter with obtaining a loan for their home solar project are the same with any loan. For example, you might have a poor credit rating, or you might not have enough equity in your home to qualify for a secured loan and have to resort to a more costly unsecured loan instead.

If issues such as these mean that you can only qualify for a high loan rate that makes your home solar project less financially attractive, what should you do?

Often the best thing to do is postpone your solar installation. Wait until you can improve your credit rating, or explore other options such as community solar.

One thing you should almost certainly not do is go with zero-down financing products such as a lease or power purchase agreement (PPA). These are sometimes pitched as “free solar panels” and are almost always worse for the consumer than purchasing your system. They are typically sold by companies such as Sunrun, Vivint, and Momentum that have problematic track records such as class action lawsuits, bankruptcies, and numerous complaints with the Better Business Bureau.

Tip 3: Get multiple quotes and don’t be afraid to negotiate

As with any major project where you hire a contractor, always get multiple quotes for your home solar installation. Not only will you get different prices, but you’ll be offered different equipment and have a chance to interview companies to find out who you’re most comfortable with.

What do you do once you have quotes from multiple installers? Look them over carefully, paying attention to not just the bottom-line price but things like the equipment proposed, warranties, and the details of the system design.

You might have one quote that’s quite a bit higher than the others, but maybe they’re offering better equipment, have a more accurate solar production estimate, or have a longer warranty.

How about if you have two quotes with similar equipment and you feel comfortable with both companies? Don’t be afraid to ask one company to match the lower price of another. This is a common practice, you won’t offend anyone by doing this. Don’t be pushy about it - just see if they can come close to the price of the other.

Most companies will install multiple brands of equipment too, so if one company has a better price but different equipment, you can ask other company if they’ll match the price with the same or similar equipment. Just don’t expect a premium manufacturer, such as SunPower, to have the same price-per-watt as a budget brand.

Tip 4: Local companies are usually a better deal

Solar installation isn’t a high profit industry. There are thousands of installers in the country all competing for your business, selling a commoditized product. Behind the scenes, installers have to deal with multiple permits, engineering reviews, and sometimes long wait times on approvals from utility companies.

To make money, solar installers need to be very efficient. Companies will try to do the entire installation in one day if possible. To accomplish this, it’s a straightforward logistical challenge. In the morning, the installation crew loads the equipment into a truck, drives to the site, installs the equipment, and goes home.

Because of this, the amount of driving is important. If the installation site is more than an hour from the company’s home base, the extra driving time might mean they need more than one day to accomplish the installation. Sometimes, this means a hotel stay for the crew, pushing up their costs further.

Large companies like Sunrun might have a national presense, but they don’t actually have their own offices in every location where they install. Instead, they essentially subcontract the jobs through a dealer network.

This often increases the bottom-line price, because you now have two companies with profit margins that must be satisfied: the company that you deal with for the contract, and the company that does the actual installation. Because two companies need to be paid, consumers that choose big national solar installers will often pay a higher price.

That’s one reason why companies like Momentum and Sunrun push customers toward solar leases, where the homeowner doesn’t own their solar panels but rents them. By paying a contracted price for their solar panels over a couple decades, these companies can earn more revenue than they could from low-margin installation work.

For these reasons, small local companies will often give you the best deal. It’s why they’re the preferred companies in The Solar Nerd network.

Save 26% or more on home solar with current incentives

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Use our calculator to get a financial payback and solar performance estimate customized to your home, including federal, state, and local incentives.

When you’re ready, fill out our form to get up to three estimates from qualified solar installers.