Five Easy Ways to Compare Home Solar Proposals

Home solar systems are pretty simple: put some solar panels on your roof, wire them up, get connected by your utility, and enjoy cheap electricity for 25+ years. But the technology and options can be confusing – especially as solar salespeople strive to point out differences in their products and services. I’ve watched customer’s eyes glaze over as I talk about the differences between poly and mono crystalline cells, string and micro-inverters, degradation rates and warranties. This only makes comparing solar proposals more difficult.

Solar panels are a commodity sold on a $/watt basis. Many of the solar panels get their cells from the same sources in Asia – just as different brands of gasoline are manufactured in the same refineries. As a result, two homes with the same total wattage of solar panels on the roof with the same exposure will have virtually identical annual energy production.

Listen up to this week’s Energy Show on Renewable Energy World as we talk about a simple way to compare solar proposals and quotes on a dollar per watt basis. We also discuss important home solar contract terms, inverter choices, monitoring, and the ways to pick a good installer.

Ten Rooftop Solar Mistakes

Everyone makes mistakes – and I’ve certainly made my share of them. On this week’s Energy Show on Renewable Energy World we will discuss in detail some of the most common homeowner and installer mistakes that I’ve seen over the past 15+ years – as well as the actions we can take to do things right the first time.

The vast majority of solar installers are honest and ethical; they truly believe in their products and company. Nevertheless, there are some companies (and unfortunately rogue employees) who take advantage of customers. Here are a few of the solar mistakes I have observed during the sales and installation process:

  1. Poor installation practices – missed rafters, inadequate safety procedures, etc.
  2. Employees who are not properly trained or incentivized – compensation per kw, poor quality control, etc.
  3. Oversizing the system – panels in the shade, orphan panels, stuffing the roof, etc.
  4. Overestimating system output or dollar savings – easy to do by fudging inputs for design and proposal software
  5. Financial or contractual monkey business – poor explanations of actual contract terms, escalation rates, warranty obligations, etc.

Since solar is still relatively new, what customers learn about solar technology, installation processes and savings comes from the solar salesperson. With a little bit of education and caution, homeowners can avoid these common solar mistakes:

  1. Comparing solar estimates based on total costs — not the more accurate $/watt basis
  2. Lack of understanding of solar financing options and terms – escalation rates, buyouts, warranties, etc.
  3. Getting pressured into buying immediately – the “drop close,” special pricing, artificial incentive deadlines, etc.
  4. Hiring an inexperienced or improperly licensed contractor — usually not from a referral
  5. Installing a system that is undersized for current or near future needs – adding on to a system at a later date is usually expensive

A Gathering of Solar Pioneers

Scientists at Bell Labs made the first solar cell in 1954. A dozen years later entrepreneurs started installing solar panels on rooftops. Now we have over one million homes and businesses powered by solar panels. We owe much of this success to the thousands of men and women who pioneered the solar industry. They are the ones who had visions of solar panels on every sunny rooftop.

Jeff Spies, now with Quick Mount PV, had the idea to get these solar pioneers together. “In October 2015, a group of dedicated solar professionals gathered in southern Humboldt County for the first-ever Solar Pioneers Party,” said Jeff. “These incredible people assembled to celebrate the birth of the solar industry and recognize the contributions of those intrepid backwoods solar engineers and mad scientists that made solar home power possible.”

The second Solar Pioneers gathering is coming up in the middle of October. And it’s not just a gathering of solar old-timers, or an opportunity to test that solar powered defibrillator. The strategies, tactics and sheer force of will that got our industry off the ground is in just as much need today. So please join me on this week’s Energy Show on Renewable Energy World as my special guest, Jeff Spies, talks about the next Solar Pioneers Gathering.

The Real Cost of Electricity

Electricity is a commodity – indistinguishable regardless of the source (all kwh are the same), available from different suppliers and easily transferable. But like many commodities, the cost of electricity varies depending on the location to which it is delivered.

The cost range for electricity in northern California is fascinating. Utilities pay as low as $0.04/kwh for electricity they generate in centralized solar plants. Many companies are installing rooftop solar systems for the equivalent of $0.06/kwh (less for commercial installations). And the average charge to consumers is $0.20/kwh. Why such a big range between wholesale generation costs and retail selling price? First, there are a lot of costs involved from generation to retail sales. And second, some electricity business models are much more expensive than others.

Conventional utilities provide three electricity services: generation, transmission and distribution. Here is how utilities break down their rate components to get to a retail rate of $0.20/kwh:
– $0.10/kwh for electricity generation (usually at a central power plant)
– $0.02/kwh for transmission at high voltages over long distances (those tall electric towers)
– $0.08/kwh for local distribution (that local network of substations, transformers and utility poles)

But why is the cost of electricity so high when generation costs are $0.04/kwh, and rooftop costs are $0.06/kwh? Mainly because monopoly utilities are not under any competitive pressures. A simple comparison between Investor Owned Utilities (IOU) and Municipally Owned Utilities (MOU) illustrates this point. My local IOU charges an average of $0.218/kwh to homeowners; just 5 miles away the local MOU charges an average of $0.115/kwh. IOUs have much higher cost structures; spend hundreds of millions of dollars lobbying regulatory agencies, legislators and the public about why they need high rates; and get a guaranteed profit of 10%.

I can’t think of a single reason why we cannot transition to a more consumer friendly and less expensive way to generate electricity. Please Listen Up to the Energy Show on Renewable Energy World for more about the artificially high price of electricity, and the future of cost-effective and reliable power generation.

Electric Utilities Don’t Want Solar on your Roof

Rooftop solar is the cheapest way to generate electricity for your home or business. That’s good for you — but not for your local utility. They lose revenue (selling fewer kwh) and profits (fewer assets on which they generate their guaranteed 10% profit). As a result of this competitive threat, utilities have implemented an organized, national campaign to slow down, and in some cases prevent, more rooftop solar installations.

In almost all other cases of new technology displacing old technology, customers were free to choose the products and services that would benefit them the most. But in this case utilities are a monopoly. In effect, their anti-competitive behavior is sanctioned, and partially constrained only by state public utilities commissions. Utilities and their front groups (such as the Edison Electric Institute) have organized on a national basis, and are spending hundreds of millions of dollars to convince the public, legislators and regulators that rooftop solar is not in the best interests of the pubic and ratepayers.

Their first argument, that rooftop solar is too expensive, has been proven to be false. Just about any homeowner with a sunny roof can generate their own power for less than the utility charges. Their second argument, that the grid can’t handle all the power flowing backwards from rooftops, has never been close to a problem anywhere in the developed world. Moreover, this potential limitation can easily be addressed with new feeder equipment installed at local substations (on which utilities will get their 10% guaranteed profit). Their third argument, that solar shifts costs from ratepayers, has been disproved time and again (most recently in the Brookings Institute Net Metering Meta Study).

Bottom line…it’s all about the bottom line. Should customers get the benefit of cheaper electricity with rooftop solar, or should utilities be allowed to maintain their highly profitable monopoly while charging customers ever more for electricity? A quick comparison between Investor Owned Utilities (IOU) and Municipally Owned Utilities (MOU) shows just how expensive the IOU model is for ratepayers. For more about the specific efforts of utilities to limit customer choice, constrain rooftop solar, and profit at your expense, Listen Up to the Energy Show on Renewable Energy World.

What Could Go Wrong with your Home Solar System?

Just because you have a worry free warranty on your rooftop solar system doesn’t mean things can’t go wrong. Murphy’s Law — “anything that can go wrong will go wrong” — still applies. On this week’s Energy Show we will discuss the few real world things that can happen that may affect your rooftop solar system performance.

The good news is that as long as your solar panels, inverters and rooftop mounting systems are installed properly there is almost nothing to worry about. Almost all solar panels sold in the U.S. have 25 year warranties, inverters have 12-25 year warranties, and most installers guarantee their workmanship. So besides keeping your panels clean and checking to see that the inverter is operating properly (hint: look for the green LED), you can look forward to 25+ years of clean energy generation.

Nevertheless, I have seen four general types of problems that are not covered by equipment or installer warranties: damage from rooftop pests (squirrels, rats), damage to the glass of the panels (painting, improper cleaning, tree branches), solar panel defects from non-standard or bankrupt solar companies, and overly optimistic savings estimates. For more about the maintenance and operation of your home solar system, Listen Up to this week’s Energy Show on Renewable Energy World.