Direct Solar Install
Okay so summer is basically here, you’re at home worried about COVID and you have to run your AC. The bills keep getting higher. You’re on facebook a lot and you see solar ads popping into your feed like crazy. Should you click and set up a discussion? Who am I to say not to click on any marketing advertisement, but I thought I would take this opportunity to explain how most solar companies work.
First some solar companies only do solar sales. They hand off the “sale” to a licensed contractor. These companies likely have a business license and one would hope their sales persons are registered with the California State Licensing Board (CSLB) with their Home Improvement Salesperson (HIS) license. These companies “sell” you a system then hand off that system for a fee to a licensed contractor who actually installs the solar system. These solar sales company folks will come into your home or in today’s environment have a conference call with you and want to collect some information on your electric bill (your usage history) and see if they can build a preliminary system design for you to produce as much power as you have historically used over the last 12 months. They will also guide you thru your options for paying for the solar panels being put on your roof. But beware - the option they push might not always be the best option for you. It may be the option that makes them the most money. Enter the “sales commission” - all salesman have a price point by which they “sell” solar to any customer. They get a “cut” of the sale that they then hand off to the licensed installation contractor. The deep secret in solar pricing is called “Price Per Watt.” It really shouldn’t be a secret because it’s simple:
The number of panels times the number of watts (in DC) of those panels times the “Price Per Watt” equals your system cost of your solar system.
So let’s say you need 20 panels. They are 325 watts DC rated. The salesperson your are talking to says the total price is $22,750 for that system installed. You’re excited because you know you are getting a 26% tax credit that totals almost $6000 on that system if you buy it outright. The salesperson designed it to meet about 110% of your historical electricity usage over the past 12 months. You’re think this is a great deal. But is it? So do the math real quick...$22,750 (which is what you are paying) divided by 20 (number of panels) and 325 (rated panel wattage) comes out to a price of $3.50 per watt of power installed. Is that a good value? The answer of course is “that depends”, but assuming you aren’t getting solar panels found on the International Space Station, you are probably paying more than you need to be. What is not told to you is that your Salesperson likely has a price point of anywhere between $3.00 to $3.25 per watt. So anything sold above that number is his or her commission. In this case that is around $3,250! Are you willing to pay that much more even if you like the person you’re talking to? Why not just do a direct installation with a licensed C46 Solar Contractor and avoid all the sales gimmicks? Your answer is likely yes; so how does that work?
First, same data collection phase. You’ll need to know how much historical usage you have over the last 12 months. If you haven’t lived in the home for 12 months, not to worry, a “square foot” build can be accomplished based upon your homes square footage. Next, it really is what you would expect from any contractor, you would be quoted for a system based upon your needs, but without the “sales” markup as there isn’t a salesperson. From there you’ll sign a contract and depending upon the financing process you’ll either give a down payment, pay nothing out of pocket, or probably have to work with a separate finance company to get qualified.
The main point of this blog post is there are other options than going with companies that have a big sales arm and drive fancy cars to appointments. Remember those people and vehicles are a lot of overhead and cost that is transferred to you the customer. Here are some quick thoughts to consider as you work thru “going solar”:
1. Pick a licensed solar contractor - a company that has a C-46 CSLB license. Ask to work directly with the contractor not the sales team. This will save you any sales commission.
2. Ask for that contractor’s portfolio - have him or her show his work and give you a list of references.
3. Talk thru all your options - Power Purchase Agreement, Financed Purchase, or Cash Purchase - SAFETY TIP - Cash is king - you’ll get the best price for any system with a cash price. All solar companies that bring financing to the table do so with a cost of a hefty dealer fee - that fee gets passed on to you the customer.
4. All solar panels, inverters, and batteries are not created equal. Make sure you understand the pluses and minuses of the stuff going on your roof. Some panels are of higher quality than other panels. Your contractor can work with you on what is best for you and why. This is an investment you only get to do once. So make sure you understand not only what is on your roof in year one, but also how that system is expected to perform in year 25.
5. If you are a SCE, SDG&E, or PG&E customer and the contractor doesn’t go over the CPUC Homeowner Solar Guide (there is a separate blog post about the CPUC Homeowner Solar Guide) with you....pick another contractor. It’s required before signing any contract. You’ll need to initial the first four pages of the document and sign on the last page.
6. Once you have signed the CPUC Homeowner Solar Guide and signed a contract with your contractor, the contractor will need to come out and do a physical site inspection of your home or business. There may be a change order after this visit. Don’t be surprised. The most likely changes to your contract would be caused by a need to upgrade your main electrical panel or if your roof is in poor condition. You can’t inspect your roof or main panel from a Google overhead satellite shot. The good news is because you went direct to a contractor and you need what is called “adders” in the industry, your contractor can arrange roofers or electricians (if needed) AT COST without any mark up.
That’s about it. Of course DesertClean Energy would love to work with you for an opportunity to conduct a direct installation. Feel free to email Desiree at desiree@desertcleanenergy.com to set up your initial discussion and see where it goes. #powerthatpaysforitself #thebigdealsolar #directsolarinstall