20 tips for comparing solar quotes and contracts
Now that you’ve gotten proposals from solar installers, how do you select which one is best for you? This article will guide you through the decision procress.
If you’re actively in the process of getting solar panels for your home, at some point you’ll find yourself with a handful of proposals from solar installers, trying to decide between them.
Hopefully you used The Solar Nerd to find your contractors, which takes care of one of the most important steps in the process, which is getting multiple quotes and screening out underqualified companies.
When you contact a solar installer for a quote, the first document you’ll usually get is a solar proposal that’s only a few pages long. It’ll have the key details of the proposed system, such as the number of panels, where they’ll be installed on your roof, and the project cost.
Once you decide you’re interested in working further with a company, they’ll prepare a more extensive contract with a lot more details. These contractgs can be many pages long with some dense language, so wading through three or four quotes (or more) can be a little intimidating. And even after rebates, it’s a pretty big purchase, so you might be scared of making a bad decision. How do you choose?
Use a checklist. This is the best way of managing any major home renovation, and a solar installation really isn’t any different. If you read our guide on how to choose a solar installer, you’ll already be familiar with a lot of the items we list here. If you haven’t read it, start there first.
The Solar Quote Evaluation Checklist
1. Do your background check on the company
For every quote you receive, make sure to do some due diligence on the company. If you used The Solar Nerd to get your quotes, we’ve already researched the companies for you and used feedback from previous Solar Nerd users to help screen out underperforming companies. If you used a different service to get your quotes or you found the companies yourself, you’ll want to know what questions to ask and research to do to screen out the bad ones.
This is a pretty lengthy topic by itself, so check out our article on how to pick a good solar company.
2. Make sure that you’ve done a “sniff test” of the company in person
If you’re like a lot of people, you hate the thought of being innundated by voicemails or having to meet sales people in person. To avoid that, you might be tempted to use an online-only service for getting home solar quotes. There are online marketplaces that let you get multiple quotes for a home solar installation and even sign a contract without ever having met someone from the company.
What is a sniff test? When you contact a solar installer, you’ll have a meeting with a rep from the company, who could be a technical person or someone who is strictly a sales rep. Either way, your first meeting with that rep tells you a lot about the company. (During the pandemic, many companies are switching to virtual appointment. This practice may continue after the pandemic is over.)
Any kind of pushy sales tactics are a big red flag, and a sign that you should drop that company from consideration. What kind of things does a pushy salesperson do? As an example, one of the complaints about Vivint Solar in a lawsuit by the Attorney General for New Mexico is that customers weren’t offered a paper contract to sign, but instead were handed a tablet (with the sales person present) and encouraged to quickly sign the contract without giving it a thorough read.
With any contract, you want to take the time to read it carefully on your own, so this kind of sales tactic calls into question the quality of the company.
In contrast, high quality local solar installers tend to get a lot of business through referrals, and don’t need to use tactics like this to get all the business they need.
Sometimes, you’ll be asked to sign a contract before a company representative has done an onsite inspection of your home. This is fine only if the contract allows you to back out penalty-free if your costs go up because of hidden issues. For instance, you might have some rot in your roof that requires repairs before solar can be installed, or your electrical panel needs an upgrade. If extra expenses like this make you rethink the project, make sure the contract doesn’t penalize you for backing out.
3. Understand your energy requirements
If you’ve never examined your electric bill up close, now is the time. At first glance, they can be intimidatingly complicated: it can even seem like the company is trying to make your bill hard to understand on purpose. But I promise that if you take a little time to read it over, it’ll all make sense.
In your utility bill, there are three key pieces of information you’ll need to know:
- Whether you pay a fixed rate for electricity, or if you instead have a time-of-use plan. If you have a TOU plan, that can have an effect on the ideal direction to face your solar array.
- How much you pay for a kilowatt-hour of electricity. The more expensive your electricity is, the valuable the solar electricity you generate will be.
- How much electricity you used in the past year. This will determine how many solar panels you’ll want to have in your array.
Your bill is probably 3-6 pages long, including the pages that define all the terms used in the bill. If you’re having trouble making sense of it this article, which includes examples of my own bill, might help. Your utility company’s website will often have a helpful explanation too.
Another thing to know is how your electricity usage might change from year to year. Was the past year unusually hot or cold? If so, that will affect your heating or cooling usage, so you might want to average your electricity usage over the past few years to get a more accurate picture.
Or maybe you plan to renovate your house, add a pool heater, or buy an electric car? Things like that can change your electricity bill enough that you may want to plan for the option of expanding the size of your solar array in the future.
4. Make your requirements clear to the installer
Every good solar installer wants to design a system that leaves you as a happy customer. To do that, they have to know what’s important to you. Will your solar panels face the street, and so will curb appeal be a factor? If so, you may want to pay a little more to get better-looking solar panels. Or maybe it’s important to you to buy American. Or maybe you’re expecting your PV system to keep the lights on during a blackout, in which case you should be talking about a battery system.
Another consideration is how much of your electric bill you expect to eliminate. Many solar homeowners aim to generate 100% of their electricity from solar, but there’s nothing wrong with targeting less than that. Even if you generate only 50% of your electricity needs from solar, you’ll still be making a financial and environmental impact. (Be aware that even if you plan to meet 100% of your electricity needs from solar, you’ll still receive a bill from your utility company.)
Whatever it is that you’re hoping to gain by going solar, make sure to have that conversation with your solar installer so they can design a system that works for you.
5. Discuss the equipment selection. Ensure it’s spelled out in the contract.
A home solar panel system isn’t just about the panels, but also the racking, inverters, and any electrical upgrades that your home requires. Depending on the compensation scheme for excess electricity that your utility company offers, you may also need one or even two new utility meters.
Each of these items should be clearly spelled out in your contract, including the specific manufacturer and model number of each component. If they aren’t, ask. If they refuse, find a different contractor.
Most people focus on the solar panels, which is understandable because they’re the most visible part of your system. But in reality, the inverter is perhaps the most critical piece of the whole system, and will often have a bigger impact on performance than the panels.
Another underappreciated system component is the racking system, and especially the footings that attach the racks to your roof. If the footings aren’t installed correctly per the manufacturer’s guidelines, your roof could experience costly leaks that wipe out any savings you’ve achieved by installing solar.
So, ask about the racking system and how the footings will be attached so that the system remains waterproof. If you want, you can even look up the installation manual online (example) to find out what a proper installation looks like.
6. Compare the different equipment choices between proposals
While some solar installers will be able to install any equipment that’s available, most companies have a list of manufacturers they like working with.
Because of this, if you get proposals from three different solar installers, you might end up with three completely different sets of equipment to consider. How do you decide what’s best?
As mentioned above, solar panels get all the attention, but they’re often not the most important component. Take some time to learn about inverters, and especially microinverters and power optimizer systems, which are now installed in a majority of residential systems.
When it comes to mounting the system onto your roof clay tile, metal roofs, and flat roofs all present different challenges and require different equipment. Waterproofing the installation is one of the most important aspects of the project, so don’t be afraid to ask each installer for details on how they will do this.
When it comes to power generation, the inverter choice matters a lot if your roof has shading on it part of the time. If not, then you can focus on your solar panel options, such as deciding between monocrystalline and polycrystalline and other panel technology choices.
For each proposal, ask the company why they recommend the equipment they do, and don’t be afraid to push back on any choice that you’re not comfortable with.
7. Figure out where the difference in costs are
Once you have a line item breakdown, you’ll be able to compare the different proposals and see where some companies may have higher costs than others. Is one company charging more for similar equipment? Is their labor cost higher? Do they recommend using different inverters? You won’t be able to do this analysis if the costs aren’t broken out.
Of course, lower costs are not necessarily better. A company might cut costs where you don’t want to - for example, by doing a quick and sloppy job of running dangling wires outside your house, while another company takes the extra step of running conduit inside a wall cavity where it can’t be seen.
Everybody likes to save money, but don’t automatically go with the cheapest contractor.
8. Save money in the right place
Interestingly, if you want to cut costs on your solar system, the best place to do that is often the solar panels. A high end panel might cost twice as much as a cheap one, but the performance-per-dollar almost certainly won’t be twice as good.
Unless you are very limited in the amount of roof space you have, it’s often a good tradeoff to save money by going with a lower efficiency panel and sacrificing a little more roof space. Solar panels have no moving parts, so even cheap panels have low failure rates. That said, some premium panels such as the LG NeON 2 series have excellent warranties that include labor, so if you place a premium on worry-free ownership, the cost premium might be worth it to you.
9. Understand the warranty terms
Every piece of equipment will have its own warranty: the solar panels, inverters, and racking system will have their own coverages.
With solar panels, there is one warranty that covers product failures, and another warranty that guarantees the power production of the panel (if the panel is still working). The product warranty will protect you against defects, while the power production guarantee gives you a floor on the power loss that’s expected to occur over time. Our article on solar panel lifespans goes into this in detail.
Inverter warranties are often 10 years for string inverters, and 25 years for microinverters. This is an important consideration: while microinverters cost more upfront, you can also expect them to last longer. This means that if you go with a cheaper string inverter, you’ll save money at first, but you should plan for the cost of a replacement after a decade or so.
The solar installer will also warranty the work they perform. This means that if there’s a failure due to poor installation, such as a leaking roof, this should be covered by the installer warranty. The duration of warranties offered by solar installers varies a lot around country, ranging from only a few years to as many as 25. Be sure to ask the installer what their labor warranty covers.
If component failures happen after the installer’s warranty, ask about the process for making a manufacturer warranty claim and having the component replaced. Ask what the labor costs will be if a failure happens outside of the warranty period. (Although labor rates will have risen if you’re dealing with a failure 20 years from now!)
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. Most manufacturer warranties don’t include labor, but a notable few do: these include SunPower, LG, and Panasonic.
10. Review the power production estimate
Your proposal will include an estimated annual power production in kilowatt hours. How does that estimate compare to the average annual usage you calculated earlier?
Installers will often include a warranty that guarantees that your actual power production closely matches the estimate they gave. If it falls below a threshold, the warranty will kick in. Not every installer includes such a guarantee, so check the contract.
Keep in mind that a power production estimate is calculated from many variables, including the orientation of your system (its direction and vertical angle), the types of panels, the amount of shade, your local climate, and the weather in a particular year.
The weather can differ a lot from one year to the next. For example, if you happen to have an unusually rainy summer one year, your power output that year might be low. That’s a not a reason to complain to your installer - it’s just a normal part of owning a solar system.
11. Net metering and alternatives
Unless you’re planning to add solar panels to a cabin in the woods, your system will be connected to the electric grid. This means that you’ll buy electricity from your utility when you need it, and sell extra solar electricity that you aren’t using into the grid.
How much you are paid for that extra solar electricity depends on whether your state and utility offer net metering, or a different compensation scheme such as net billing or a feed-in tariff. Some states mandate that the major utilities offer net metering, while others don’t. Find out what your state requires, but also know that these mandates sometimes have caps, and your utility may have exceeded that cap. Ask your installer to explain whether you can have net metering or a different billing arrangement with your utility.
12. Utility work
Related to net metering is the type of electric meter that will be installed by the utility company. Ordinary meters can’t track the solar electricity that you sell into the grid, so you will either get a smart meter that can track two-way electricity flow, or a second meter that only tracks power you send into the grid. Which type gets installed is up to your utility.
If you’re in one of the few states where you can earn Solar Renewable Energy Certificates (SRECs) for the electricity you generate, you will need a special ”revenue grade” meter that is designed to accurately track and communicate your solar electricity production. See the Incentives section below to learn more.
Whatever the case, there’s not much that you as the homeowner needs to do, except possibly to be home for the installation.
Some utilities charge a fee for this meter installation. This should be mentioned in the contract.
In addition to replacing the meter, you may have one or more inspectors come to visit your home during the process. For example, in many cases an inspection from a structural engineer is required to make sure that your roof can support the additional weight of solar panels and racking. You might also have an electrical inspection from the city, or a final inspection by the utility company before they will let you turn on the system.
Which of these is required depends on your local codes, so make sure that the installer explains this so that you can plan to be home to let the inspectors in.
14. Review the system design
Your proposal should include a diagram of exactly where on the roof your solar panels will go, where the inverter will be, and how the wiring from the roof will be run down to your electrical panel.
This last detail is often overlooked. If it’s done unprofessionally, you can end up with sloppy wiring that is visible outside the house. There might be cases where you want the wiring to be hidden, such as when it would otherwise be visible on the front of the house. If so, let the installer know. They may be able to run the wiring through the attic and down a wall cavity.
15. Contractor’s insurance
The installer’s contract should state that the company is covered by liability insurance and workers compensation insurance. Liability insurance protects you if any damage occurs to your house as a result of work done by the contractor, while worker‘s compensation insurance protects you if workers are injured while working on your property. Hiring any type of contractor, including a solar installer, that does not have these types of insurance is risky and could be very costly to you.
16. Payment terms and schedule
Whether you are paying cash or arranged financing through the contractor, be sure that you understand the payment terms. The contract will spell out when full payment is due or, if you are financing, the payment schedule.
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.
Solar panels require minimal maintenance. If you are getting a lease or PPA, check the contract to see how system failures are monitored and handled, because you don’t want to experience weeks or months of system downtime. Also, under a PPA, see if regular cleaning is part of their service.
Some state or local incentives are applied for by the contractor. For example, in New York state, the NY-Sun incentive is applied for by the contractor, but is used to reduce the net cost you pay. Check our solar calculator to find out about incentives, and then follow up with your installer to find out how they work.
A few states have significant incentives in the form of Solar Renewable Energy Credits (SRECs), which are bought and sold on an open market. If you are in one of these states, find out from the solar installer what the latest status is, what the requirements are, and what the best way for you sell your credits are.
20. Review your timeline
Once you’ve gotten to the bottom of the proposal and asked all of your questions, you should have a pretty good idea of what the overall timeline of your project is, but it’s always a good idea to take another couple minutes to just jot it all down so that you have a clear picture of what the steps are, including inspections, installation, utility connection, and the all-clear from the utility company to switch your system on.