Things to Watch Out For When Buying Solar Panels
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”Abraham Lincoln
So, at this point, I think you know my thoughts on solar power. I LOVE IT. But I want to help homeowners make educated decisions about powering their homes with the sun. A little planning and preparation can go a long way towards saving you time and frustration down the road. In this post, I am going to play devil’s advocate and discuss what to watch out for in a solar salesperson and a solar company. If I had friends or family considering solar and I was out of the industry, this is what I would want them to read to avoid getting ripped off.
In Most Cases, it Pays to Buy the System Versus Lease or Enter a Power Purchase Agreement
On paper, it can sometimes sound beneficial to the homeowner to lease a system rather than purchase it because a salesperson will discuss the benefits of no money down and lower monthly costs when switching from traditional energy bills. What they may forget to mention is that with current solar financing, you can often still get solar panels on your roof for NO MONEY DOWN when buying the equipment and eventually owning it outright. When you purchase the system, the homeowner receives the government tax credits; when you lease the system, the company receives those same tax credits. That means that often, the price to finance and own outright can be lower than leasing the equipment and having to pay for it over the next 30 years (while still never owning it outright).
Another downside to leasing is that if you need repairs to the roof, they lock you into having the company you’re leasing from being the sole provider who can remove the panels so the repair can get done. That means you limit your options, and repairs can be delayed as the company really has no incentive to hurry and help you fix a problem that could be slowly or quickly deteriorating your roof. In the worst-case scenarios, this can lead to taking legal action to fix problems that would be quickly remedied if you simply owned the panels outright.
The final problem with leasing is that it often comes with escalator rates versus fixed rates of financing. One of the biggest reasons to even consider switching to solar is to lock in a rate to a more favorable one than you can expect to receive in the future. Protecting yourself from inflation and better managing your monthly costs is important, and solar panels allow you to do just that when purchasing. Leasing contracts frequently include step ups that will hit you down the road, preventing you from realizing major savings in 10 to 20 years that you might otherwise benefit from when owning the power plant on your roof.
Unless you don’t plan to stick around in your home for over 2-3 years and are primarily concerned with your savings today, leasing and power purchase agreements are not your best bet. The payback period for investing in rooftop solar is typically between 5-8 years and after that, you are the beneficiary of significant savings every single month for the life of your system, which can be 30+ years.
What Equipment Will Be Used When Designing Your System?
Just looking at the price of a solar panel proposal is really only looking at half the equation when considering a pricey investment in energy production. It’s important to look at the panels placed on your roof, the brand that makes them, the energy they expect to produce and the reliability they carry. In addition, another important factor is whether you will have a String Inverter System or a Microinverter System. Now, this might sound complicated, but let me break it down so it’s easier to understand. To begin with, the function of a solar inverter is to convert energy from direct current (DC) energy into Alternating Current (AC) energy so that it can power your home. When sunlight hits your panels, it creates DC energy, and so an inverter is necessary to transform that into usable AC energy to power your appliances and needs. Here are the pros and cons of both systems:
String Inverter System
1. Lower chance of wiring issues because there are fewer connections, and thus, any issues are easier to troubleshoot and fix.
2. The cost of these systems is cheaper because it takes fewer hours to install, saving on labor, and the components themselves are cheaper as well.
1. Efficiency is affected in equal measure among the panels when dealing with shade. That means if shade affects one panel, they are all affected the same. So, if one panel has shade, which drops the expected production of that panel by 30%, all the panels connected to that string will have 70% expected production, even if there is no shade on the rest of the panels.
2. Adding additional panels in the future is more difficult and more costly. If you decide to expand the system for any reason down the road, it will require an additional inverter, time and, of course, cost.
3. Shorter lifespan and shorter warranty. String inverters rarely carry the 25-year warranty microinverters do. Often, it’s less than 15 years, meaning that once that warranty expires, any issues will have the homeowner footing the bill.
4. You can’t monitor the performance of individual panels, only the whole system. Homeowners who can monitor panel performance on a panel-by-panel basis have the advantage of addressing any issues that might affect the efficiency of one panel and taking action to correct it.
1. Under less than optimal conditions, a microinverter system will deliver more power than a string inverter system. As the saying goes, “a chain is only as strong as its weakest link.” That applies to string inverter systems, while on a microinverter system, that weak link won’t affect the production of the other panels.
2. Ability to rapidly shut down the system for first responders and service the power lines. New electrical codes require the ability to rapidly shut down a system to protect others from the high voltage when working on power lines.
3. Challenging rooftops with shaded areas or chimneys will do better with microinverters because panels not facing southern exposure can still produce significant energy while not dragging down the production of other panels. And, of course, as I stated before, issues of shading in certain areas of the roof won’t drag down total energy production either.
4. Longer lifespan with longer warranties available for microinverters. These warranties are often 25 years versus the much shorter string inverter warranties.
5. Ability to track individual panel performance and the total system performance.
6. Easier to expand the system down the road. If you decide you want to expand the system because of a need for additional energy needs in the future, it is easier and less expensive to do with a microinverter system.
1. Microinverters cost more because they do more and offer more benefits to the homeowner.
2. Servicing and replacing issues are often more expensive and complex. That said, with the longer warranty, the homeowner shouldn’t be on the hook either way.
3. There is more hardware on the roof. Though it will be neatly hidden and not affect the aesthetics of the panels, it is there, nonetheless.
If you haven’t picked up by now, I recommend investing in microinverter systems because they are future-proof and can provide more value for the homeowner. Even though it might be costlier than a simple string inverter, I believe the benefits far outweigh any negatives associated with them. If you’re picking between two systems, do yourself a favor and pick the microinverter system and save yourself issues down the road.
What Material is Your Roof Made Of?
While solar is great for almost any roof, the one roofing type I hesitate to recommend is outdated wooden shingles. While these are attractive on vacation cottages near the beach, they are not well suited for solar because of fire hazards. Solar panels get hot and generate power, which isn’t usually an issue on its own, but when combined with the metal in the mounting equipment and panels themselves, they are more likely to attract lightning. While a wooden roof won’t be a serious conductor of electricity during a lightning storm, the addition of metal on a highly combustible surface can cause issues. If you have a wooden roof and are considering solar, I would caution you to think twice or consider replacing your roof with non-wooden shingles. With today’s roofing advancements, plenty of non-wooden options look like wood while still containing advanced properties of better roofing materials.
Find a Company with Multiple Options
I believe it’s a disservice to homeowners to work with a company that only has one option for panels. That is because while you might work with the most stand-up and trustworthy sales rep, it’s hard to be objective when your commission depends on selling only one product. With one product, you don’t have options to offer that might better serve your customer, making it hard to be transparent about any downsides a product might have.
Get Multiple Quotes
When working with family and friends, I always encourage them to get multiple bids from my competitors. Why would I risk losing a commission by letting them talk to the competition? Well, for one, I work with a company that has the lowest price in the industry while carrying the top brands and the best equipment. I know that if they have seen what others charge for a similar system, they can feel confident when I present my solution for their solar needs. It lets them know I stand behind my product and also provides them with peace of mind that they are getting good value.
I would encourage any homeowner to seek 2-3 bids for a solar system before signing a contract. That will allow them to learn more about the process along the way, get multiple answers to their questions and see the differences in the equipment and what it delivers. That said, solar is a competitive industry and seeking over 2-3 bids might have you feeling inundated with pushy sales agents that won’t leave you alone. I have found that letting homeowners make their own decisions rather than trying the hard sell leaves us both feeling better about the process. That is not always the case in solar sales, especially with new reps who haven’t experienced trying to force a sale and putting in hours of work only to have someone back out because they didn’t feel like they made the choice themselves. People hate feeling sold, and if you can present a product in a fair and transparent way, people are usually smart enough to come to the right conclusion on their own.
Know the Market Value of What You Want
This book was created to give homeowners a leg up when deciding if solar is right for their home. When you receive a proposal from a solar consultant, here is a quick equation to help you figure out the price per watt they are charging.
1 KW = 1,000 WATTS
TOTAL PRICE OF PROPOSAL \ KW SIZE OF SYSTEM = PRICE PER KILOWATT
10 KILOWATT SYSTEM = 10,000 WATTS
$25,000 COST OF 10 KW SYSTEM = $2,500 KILOWATT
$2,500 \ 1,000 = $2.50 PRICE PER WATT
In the previous chapter, The True Costs of Solar Energy, I explained how to figure out the price per watt you currently pay each month. And by running the PRICE PER WATT of proposals you receive, you can better understand what they are proposing, even across systems of different sizes. Entering each conversation knowing the monthly price per watt you pay and then calculating what they are selling protects you from entering a contract that isn’t in your favor. This will also help you determine the payback period for solar panels, but don’t forget to adjust for the monthly and yearly increased costs associated with your current electric bill and factor that when comparing a fixed cost of financing a solar panel system.
Avoid Rubber Components on Mounting Brackets
Just like a brand-new tire left in a warehouse will deteriorate after a few years, the same is true on your roof. The elements are tough on tires, and they are tough on the rubber that many solar panel mounting brackets are made from. I always recommend trying to find an installer that will ensure the least amount of rubber on your roof and opts for using metal mounting brackets, even though they cost more money. The lifespan for metal mounting brackets is much longer than rubber mounting brackets and will save you headaches and costs down the line.
Every industry suffers from a few bad apples that can give everyone a bad name, and solar is no different. Unfortunately, there are many companies and sales agents that take shortcuts and offer bad advice to sell more products and make more money. While I can’t protect you from dealing with them, this chapter helps you monitor your bottom line and ensures that factors you may not have considered don’t cause you issues in the future.
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Jon Nelsen | Solar Consultant