Top 10 things to ask your sales rep
What is the Cost per Watt
-Most solar systems cost’s scale linearly, so in the industry we use the term “cost per watt” to express this. At a 3 dollar cost per watt, a 10kw system would cost $30,000 if you increase your cost per watt to 4 dollars, the price moves to $40,000 dollars. Sales reps will hide this behind monthly cost by extending the loan terms to 25+ year plus at times. At the end of the day, the final cost per watt is the most important factor in your ROI on your system.
Are there any dealer fees associated with this transaction
-In order to provide rates in the 3-4% range in todays high rate environment, the lending organization will tack on “dealer fees” to the back end of the deal. These dealer fees can be 30%+ in most cases. They are sneakily buying down the interest rate, while still charging you. The best way to maximize ROI is to prevent dealer fees.
Is this a loan or a PPA/lease
-Make sure you are 100% sure of the type of financing you are getting. Loans are pretty simple to understand, but you need terms that are less than 20 years to ensure you are only paying for your system during the highest output life of the panels. Typical panels have a 25 year warranty. PPA/Leases are more complicated financial instruments.
Is it a PPA/lease
-What is the annual escalator, most PPA companies charge a .9-2.9% “escalator” which means your bill will increase by that percentage annually. Since this is compounded, you can find yourself actually paying more for solar after 5 years than you would have if you didnt go solar, even if you did save money for those first 5 years. Make sure you opt for 0 or very small escalators to prevent this issue, it will cost you a little bit up front, but will be significantly better in the future
What happens if I sell my house?
-There have been many issues of people unable to sell their property, or forced to accept a lower valuation on their house due to unfriendly solar terms. Make sure you have a plan, in writing, that you can fall back on to ensure future homebuyers can easily assume the loan, pay it off early with no penalty, or assume the PPA of the solar system on the roof.
What is your “Redline”
-Typically a solar sales person is given a “redline” that is similar to the Cost of goods sold , this ranges from 2.50-3.50 per watt on average. The solar rep can then mark up the cost of the sale to whatever they want, usually in the 4.50-5.00 per watt range, and keep the difference, a 1.00-1.50 per watt profit. On a 10kw system this can be up to $15,000 net commission. A reasonable commission is in the 4-10% range, similar to cars and real estate sales.
What “Adders” or fees am I paying
-Solar reps have a tendency to bury hidden cost in the contract, make sure you carefully read and ask the rep for any hidden cost. They tend to include major up-charges for small modifications. Always ask an electrician for pricing before agreeing to high prices for basic work.
How long is your quote good for:
-Solar contractors, just like all contractors, should be providing quotes for you to look into and discuss. If they use high-pressure tactics to try to get you to sign immediately instead of doing diligent homework, it’s because they know they have something to hide. Honest solar companies will provide a quote, typically good for 7 days, that you can read through and understand before making a decision.
Can I have an itemized list of all the cost:
Permitting, installation, and administrative cost tend to make up a fraction of the overall cost. Dishonest companies will be unwilling to provide this information as it will expose their “hidden cost.” Make sure you get this itemized list to ensure you’re getting a fair deal.
Just remember, solar is like any other home construction projects, get multiple quotes, get itemized list for the cost, and do your homework. We can help pair you with one of our trusted TrueSun Partners if you are looking to do solar, who will be vetted by our team of experts and will provide all of this information.