Solar buyers beware!July 27, 2021
Even through a pandemic, SEEDS continued to receive solar inquiries. Residents and nonprofits continue to look for ways to reduce their energy bills and their carbon footprint. Some want a solar PV assessment, others have questions about solar technology and pricing. Jack Barnett, one of our solar advocates, noticed that some quotes that people are getting from solar installers seem a little “off the wall”, and some advertisements are outright scams. We decided to interview Jack to get his guidance on finding a reliable company to do your solar PV installation and getting a fair quote for the project.
The solar photovoltaic (PV) market is still evolving and some solar companies may not have your best interest at heart. Here are some insights and recommendations that we’ve compiled to help you evaluate a quote or offer from a solar company. And as always, please feel free to email us with your solar questions at firstname.lastname@example.org. That’s what SEEDS is all about!
Even in a state like Pennsylvania, where there aren’t as many or as lucrative solar PV incentives as in some other neighboring states, the solar installation business has still become quite competitive. Often larger national or regional companies will pay big sales commissions to marketing firms to find them sales leads and/or hire inexperienced salespeople to make calls or visit homeowners that respond to their ads. Sometimes the inaccurate quotes come from just inexperience, but other times it’s outright misrepresentation. SEEDS is a big proponent of solar PV technology, but only when it makes economic or environmental sense. However, a person or a company that works on commission may have other priorities.
So buyers beware! Spend some time becoming familiar with solar technology and economics before signing that contract. Here are some hard truths about solar that not every solar salesperson will acknowledge.
How to choose a solar installer
One key to finding a reputable and honest solar company is to look for NABCEP-certified installers. The certification should not only be for the owner or lead installer, but their sales people too. Look at the distance they will be traveling from their office(s) to your site—repairs and maintenance on solar arrays are less common than for most household appliances (no moving parts!), but when you need it, hours of travel will add to the delay and cost of that work. Look for locally-owned, long-term businesses that do other contracting work (roofing, electrical, HVAC, etc.) as well as solar. Check their reputation and reviews and get local references! Local solar installers care more about the work they do, their reputation, and your ratings. In fact, studies show over and over again that local solar installers consistently get higher ratings than the nation’s largest, and most recognized solar installers.
Costs & financing
National solar companies are vertically integrated and most have their own brands of (or rebranded) equipment, and only let their direct-trained installers or employees sell their services and products. They will also offer financing packages to pay for the solar PV installation. But you should always compare the price you’d pay in cash, since financing the purchase will always add to the overall cost. Larger installers rarely have the lowest rates, so if financing is the only option for you, your best bet is to go with the Clean Energy Credit Union or your local bank which probably has good rates on home improvement loans. Smaller companies, on the other hand, will select the brands of equipment they use based on prior experience (good or bad) and/or best availability and pricing currently offered.
Solar prices vary a lot. Always divide the bottomline price by the total number of watts of capacity (NOT the number of panels). The price per watt for residential solar projects in our area currently is likely between $2.50 and $3.00. More complicated roofs or ground-mounted arrays (due to the cost of the support structure, trenching, etc.) will be more expensive, as is USA-made equipment. Get multiple proposals to understand what would be a fair price, and be sure you’re comparing “apples to apples”. Items that are sometimes not included in the quote are sales taxes, utility interconnection application and fees, town permit filing and inspection fees, but these can increase the total cost of the project.
Our experience as SEEDS energy efficiency and solar assessment volunteers is that salespeople too often deliver a proposal that makes no financial sense. And it might be fine if you’re interested in a solar PV installation for reasons other than economics. Some financially irrational or outright ridiculous recommendations we’ve heard of include putting solar PV on an entirely shaded roof. If the array doesn’t produce a significant portion (more than 1/3) of your household’s annual electricity consumption, that’s a red-flag. As is a salesperson that gives you a proposal and requires you to sign it today, or creates a proposal without visiting your home, or better yet without getting up on and measuring your roof. The solar industry has developed software tools that will generate proposals using solely aerial photography. Roof age, obstructions, area sizing and tree heights are notoriously hard to estimate from software. It reduces their effort and costs when dealing with lots of poor sales leads, but it also reduces the quality of their proposals and leaves homeowners’ questions unanswered, and their proposal unreliable.
Source: Eco Alternative Energy
Electricity prices in Pennsylvania are relatively low (compared to NY or NJ especially), which makes the benefit of avoiding electricity purchases low as well. And without state incentives, the Return on Investment (ROI)/payback period for residential solar arrays is often 15 years or more (for businesses and nonprofits it can be even worse). But with the panels guaranteed for 25 or 30 years by most manufacturers (and the electronics for 15 years, typically), any payback interval that is less than 25 years is probably worth the investment. But you want your installer (as well as manufacturer) to be around for that long as well, just in case you need to use that warranty or need spare parts.
Another factor to consider is the value of your home altogether. Studies show that solar on a home increases its resale value. So you can still go solar even if you plan to sell your house before it’s fully repaid the cost.
Source: SunPower – Homes with solar panels sell 4.1% more.
Through the end of 2022, a federal Investment Tax Credit (ITC) is available for 26% of the cost of solar installations, which includes equipment and professional services, but not do-it-yourself labor. Tax credit means you get that amount of money directly off your tax bill, rather than a deduction that reduces the income you pay taxes on. You can’t get the credit in cash, but if you have a smaller tax liability then you can carry the credit forward into future years. To apply this tax credit, use IRS Form 5695 with your Form 1040.
If the solar proposal includes the sale of Solar Renewable Energy Certificates (SRECs) in their financial analysis, check what price they are predicting for those. As of June 1st, 2021, Pennsylvania utilities have no additional requirements to purchase SRECs, and therefore market prices are expected to rapidly fall to below $5 per SREC, i.e., you get one SREC for every 1000 kWh generated by your array. This is significantly less than what is offered in NJ where SREC prices are historically more than $100 each. You will typically sell SRECs via a broker who charges a commission, so the money you actually get will be even less. If you’re buying your solar system to reduce pollution or carbon emissions, then know that selling your SRECs means that you’re not actually going to do that. Instead you’re giving someone else permission to pollute, in exchange for that money.
If you are able to fit (and afford) a solar array that produces more electricity than your home uses in any year, there are a few specifics you should know about. In Pennsylvania, you do get a check from your utility each May for that excess, BUT the price they pay you for each kWh is not the full price you would have paid to your utility (only the generation portion of your bill, and not the distribution fees, which are often 30+% of an electricity bill). And you will always pay the fixed monthly fee for the connection to the grid. The term “net zero” is a better term than “off-the-grid.”
If you have a third-party electricity provider (rather than the default distribution utility) via the Pennsylvania Power Switch program or similar, then most likely you will need to switch back to the default utility as soon as your solar PV system is installed. Otherwise, any excess kWh generated, such as those generated during summer months, won’t be carried forward to the next month, expiring completely. This is because distribution utilities are required by Pennsylvania law to credit you for the excess electricity put into the grid. This is called “net-metering.” This is not the case with third party suppliers, although some still may provide the service, fully or partly. Also, beware of possible penalties you may have to pay if you break a contract by switching to a default distribution utility!
Finally, a solar PV system by itself will not provide your home with electricity when the utility grid is down, such as during storms or when a pole is down. You have to add batteries to be able to have backup capability. Sizing batteries for outages is a whole different discussion, and batteries are much, much more expensive than a generator that consumes fossil fuels. But unlike a generator, the solar PV system (designed and installed properly) can recharge the battery (when sun shines) even during the grid outage (known as “islanding”). This makes your home more resilient during crises and less dependent on the grid.
SEEDS offers free energy efficiency and solar assessments to its members, as well as for area businesses and nonprofits. Contact us to set up an assessment of your home, or contact us with any questions for one of our solar PV enthusiasts and volunteers by emailing email@example.com. Become a SEEDS member and support sustainable energy and living in NEPA!
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