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How to tell a good solar deal from a ripoff.

Money in a mousetrap

With falling costs and favorable laws and regulations in many states, the rooftop solar market has expanded wildly in the past decade or so. That kind of rapid expansion has proven tempting to scammers, and even good solar companies sometimes end up with salespeople who use underhanded tactics to make the sale.

Here’s how to be a good solar consumer, spot a good deal, and recognize warning signs if you’re getting the hard sell:

Be a good solar consumer

So you’ve got a quote or three for solar panels on your roof, and you’re struggling to figure out which (if any) is the best deal. And the internet is no help, because ironically, having all the world’s knowledge opinions at our fingertips has made it harder to do good research. It seems like you can always find two different sources saying opposite things!

That means you’ve got to find someone you can trust. We’d like to think that’s us, but if you need better assurances, go to Consumer Reports, or another trusted source.

If you’re ready to take the journey with good ol’ Solar Power Rocks, go grab our Ultimate Guide to Going Solar, and read on:

Step 1: Know your eligibility for solar incentives

Getting money off your solar purchase (or money back on your tax bill) is your government’s way of recognizing you for doing the right thing. States all over have enacted a number of different kinds of solar incentives to encourage homeowners to install panels on their roofs. Some incentives have worked better than others, and some have only been helpful to people who already have the money to install panels in the first place.

Still, if you qualify, there are some very good solar incentives out there, but many are only around for a limited time.

Solar incentives are disappearing

The kinds of incentives available

Here’s a quick rundown of the kinds of solar incentives available:

  • Rebates are money off your purchase. They’re usually taken directly off the purchase price, but some are also of the mail-in-and-wait variety.
  • Tax Credits take money off your bill at tax time, so they only work if you have income to be taxed.
  • Performance Payments are bonuses for producing solar energy. They’re awarded to you on a per-kWh basis, and can result in a great deal of additional income on top of electric bill savings.
  • Tax Exemptions are rewards that ensure you’re not taxed extra for buying solar panels. Many states exempt the purchase price of solar from sales tax, and most states also outlaw increased property taxes for homes with solar

Who gets the money?

Here’s what you need to know to be a smart solar customer (your installer should be able to answer these questions!):

  • If your state offers a solar rebate, does it reduce your upfront cost, or do you have to wait for a check?
  • Is the rebate guaranteed, or do you have to enter a lottery to get it?
  • If your state has a tax credit, how much of the cost is returned to you, and can you claim the credit over more than 1 year?
  • If your state offers performance payments, are they credited on your utility bill? Do you have to sell your SRECs yourself, or sell them to a broker? Or are the performance payments paid to you up front as a lump sum, in exchange for the rights to your SRECs?

Spot a good solar deal and recognize warning signs

warning sign

All right—now that you know all there is to know about how solar works and how it saves you money

A good solar company should be able to do many things right. The first of those things is explaining all the stuff we covered above. You should be working with a salesperson who knows the ins and outs of solar in your state, including how much electricity your panels will generate (annual average), how much you can expect to save from solar incentives, and how to go about making it all work.

Step 2: Know what you’re getting, and get it in writing

You should get a professional written proposal that details the equipment the company will install, the expected life (and warranty-life) of each, and how much each component will cost. The should tell you why they chose the equipment they chose and how the system will work together.

They should be able to give you a clear idea of the work involved in removing the solar panels for roof repair or replacement, and they shouldn’t push you to install panels over a roof that’s more than 15 years old (except in cases where roof lifespan is very long, such as with a metal roof)

The company should be licensed, insured, and employ NABCEP-certified installers.

Your quote should be written with a total price and a price per watt of panels, and you should compare that price with a place like Solar Reviews to check against others in your area.

Watch Out: Your quote should be for the price before any incentives, and you should make sure you’re eligible for any incentives before making your decision. If you don’t have income to tax, you’re probably not going to benefit from a solar tax credit.

Finally, they should show you a printed version of the estimated annual electricity production.

Know your solar financing options

Financing. You gotta calculate.

Now you know how to see what incentives you can get if you install, and how much money you’ll save through incentives and bill savings. But how are you going to pay for all this?

The bigger installation companies now offer a few kinds of financing, including secured and unsecured solar loans, leases or power purchase agreements (PPAs). Or you could always raid junior’s college fund, right?

Actually, paying cash isn’t all it’s cracked up to be. Solar panels are essentially like an investment with pretty well-defined future returns—kinda like starting a business that’s pretty sure to succeed. So you can feel good about taking a loan to buy the panels, because the very thing you’re buying pays itself back with electricity savings, plus you get to take a federal tax credit for 30% the full cost of the system.

No matter which way you’re leaning, make sure the company has clear terms for any financing written out on paper, then consult your money manager, lawyer, and/or accountant to make sure the terms are favorable to your specific situation.

Watch Out: PPAs and Leases can be a good deal if you have low income, but be careful—they often come with annual increases in payments that mean you’ll only save a little per year. Only go with a lease or PPA that has a production guarantee, and only choose one that saves you more than a penny or two per kWh.

Warranties and guarantees and maintenance, oh my!

Cleaning solar panels with a squeegee

One benefit of letting the company finance your installation is they often throw in free monitoring and maintenance.

Monitoring can tell you if there’s a problem with your system, and while maintenance is usually only as complicated as a hose and a squeegee, if anything does break, having a contract for free service is important.

Regardless of how you pay, your solar company should guarantee their work, and give you all the details about the warranties on the solar equipment they install. On top of the 25-year production warranty, these should include:

  • An installation warranty that covers against damage to your new system or your home by the installer
  • A solar equipment warranty that covers mechanical failure of the panels and wiring
  • An inverter warranty that covers the central inverter (or microinverters) that turn the DC electricity from the panels into AC electricity for your home and appliances.

Read more about warranties here.

Know your rights

Blind justice

Here’s the final point. If you’re signing a contract with a big solar company for long-term financing, maintenance, or anything else, be aware of your rights in the event that you have to make a claim against the company. Most solar contracts these days include a forced arbitration clause, which prevents you from suing the company if they really screw up.

Some consumer advocates argue that mandatory arbitration clauses are part and parcel of unethical, or even unlawful business practices. In one recent news story, the Campaign for accountability asked the Oregon Attorney General to investigate solar companies for violations of laws like the state’s Unlawful Trade Practices Act.

Other resources for homeowners

The Solar Energy Industries Association (SEIA) has produced a number of good documents to help you and your installer through the process. Check out their Consumer Protection page, and Residential Consumer Guide to Solar Power (PDF).

And again, there’s our Ultimate Guide to Going Solar!

Have you had a bad experience with a pushy solar salesperson? Let us know in the comments below:

Last modified: April 6, 2017

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richard
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richard

Wow, I got a new solar system 17 panels and a inverter on my roof a 5kw system. We spent over twenty-one thousand dollars for it. We were told our electric bill would almost be nothing since the system would produce electric and we could even sell the excess back to electric co. Well this had this system since june. Guess how much money we saved for the month of Nov 2017 at $10.20 our bill was $181.56 We were LIED to. WE would like to tell every body in FLORIDA, DO NOT BUY A SOLAR SYSTEM to save money… Read more »

Dan Paterson
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Dan Paterson

I learned how to get good tax rebates and to spot a good goal recognize signs

William Taylor
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William Taylor

I am 82 yrs.old so the solar system I had installed at my home was principally to demonstrate solar electricity production. But since I was to be paid for excess production I had a unit installed somewhat larger than recommended. I provided for all my electricity needs (electric furnanace) until I’d November. I was expecting a significant payment for excess production. My check at the end of 2016 was a whopping $19.50!

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