Whenever an industry experiences significant growth, the “tricksters” come “out of the woodwork.” Savvy buyers must do their research. Here’s helpful advice if you are considering the purchase of a solar power system.
Get It In Writing
Ensure that your expectations are realistic, and get a written estimate of the anticipated solar electricity production, from your contractor. Thanks to estimating software, this is a reasonable request and will be honored by legitimate salespeople.
What Will It Look Like
You should be able to get a month by month average of your solar electricity production. Unusual weather can cause some variations but today’s excellent software has a high accuracy rate.
The contractor should also provide an image of your particular roof layout and where he believes the panels should be located. He needs to include a clear written explanation on these specific assumptions:
- Brands and models of the solar panels and inverter(s) that will be used
- Number of solar panels and the azimuth angle or direction that each bank of panels will face
- Identification of any trees that must be trimmed or removed to achieve the performance in the estimate
- The approximate tilt angle of the solar panels
- A statement that the estimate is based upon average solar irradiance and weather data for your specific location
Although this written information is not a guaranteed protection against misrepresentation, it greatly increases the odds that your system will be capable of producing what your contractor promises.
It’s important to differentiate between this type of written estimate and an automatically generated online estimate. These more generic approaches to an estimate have trouble being accurate because several factors are not accounted for. Human interaction is always valuable, and the online estimate is only a starting point.
Manufacturer Is In Business as Long as Warranty
Research the manufacturer you are considering. Warranties that exceed the amount of time the manufacturer has been in business should be a “red flag.”
When home solar production started trending up, China built too many factories and mass-produced solar panels. Many of these manufacturers later went out of business. There are also other examples of US-based startups that also lost money and went out of business.
At American Solar, we sell and install solar panels manufactured by SolarWorld USA and LG Corporation—which have been in business since the 1970s and 1947 respectively. SolarWorld traces its roots to the US space program, and LG is one of the world’s largest manufacturers of appliances and consumer electronics.
Purchasing Is Always Better Than Leasing
Owning a solar power system makes a lot more financial sense than leasing or purchasing power produced by a third party’s solar panels installed on your roof, for several reasons.
Your long term savings will be more significant if you own your solar panels. Solar panel leases and power purchase agreements are designed to immediately lower the total cost you pay for electricity. While this can be very appealing for homeowners on tight budgets, these agreements typically have 20-year terms and escalator clauses that increase the lease payments or power purchase rates by a fixed amount (about 3%) every year.
When you purchase a solar power system, your monthly payments may be slightly higher initially than the value of the electricity your solar panels will produce. But at some point, your solar panels will be paid for. At that point, you will have enormous savings from solar panels that should produce power for 40 to 50 years or more.
A solar lease or power purchase agreement could also make selling your home more difficult. First, the potential buyers may be rejected by the solar power leasing company because of minimum credit score or debt-to-income ratio requirements. Second, potential buyers may not want to assume a lease or power purchase agreement that contains an escalator clause.
But I lease my car. Isn’t it the same concept?
When you lease a car, one big reason for doing so is that you are free to walk away from the vehicle at the end of a typical three or four-year lease term. And the lease payment is the same fixed amount every month. With a solar lease, you are locked in for 20 years, and the lease payment goes up every year.
You’ve probably heard that a solar power system improves your home’s resale value. And it’s true. Any potential homebuyer will be attracted to the fact that electric bills are lower with solar panels. In fact, the statistics show that your home is likely to sell twice as fast thanks to your solar system.
But here’s some cautionary advice.
For maximum resale value, pay attention to the curb appeal. You want a clean and attractive solar power system installation. When they are visible from the street, be sure to:
- Ask for all-black panels, which are much more attractive than panels with plain aluminum frames and the “checkerboard” pattern.
- Ask for either a rectangle array or, on a hip roof, a symmetrical pyramid arrangement of the rectangular solar panels that follows the roof contours.
Ensure you get a hard copy or emailed PDF file from your solar contractor that shows the proposed layout of solar panels on your roof.
Contractor and Staff Are Local
Since profit margins for home systems are low, be sure to work with a contractor that is located within 30-40 miles of your home. You don’t want to run into any problems with requesting quick service calls. You might be surprised to learn that many Florida installers are doing jobs 100 – 200 miles away from their closest office—which ultimately makes you an inconvenience.
Do Business With a Licensed Contractor
This one should be obvious. Even so, we do periodically encounter unlicensed installation of solar systems. As with any home improvement that requires a building permit, an unlicensed contractor cannot legally install your solar power system.
An unlicensed company may try to convince you to do business with them by suggesting that you can save money by not pulling a building permit. In some cases, they may suggest that YOU pull the permit as the property owner. Finally, they might say you’re getting a better price because they have lower overhead expenses.
Please don’t fall for it. If you hire an unlicensed contractor:
- You won’t qualify for a utility net metering agreement, which allows you to feed excess power generated by your solar power system back to the utility for credit on your utility electric bill.
- Your homeowner’s insurance won’t cover any unexpected damages, and it’s unlikely that the unlicensed contractor would have liability insurance. In the unfortunate event that damage occurs during or after work is completed, the costs fall on you.
- Any work scope that requires a license, is void and has no binding effect under Florida law. This means that manufacturer warranties for products installed by an unlicensed contractor would be void as well.
- You will be financially liable for any injuries suffered by workers on your property because unlicensed contractors can’t purchase workman’s compensation.
Beware of 3rd Party Advice on Solar Tax Credits
Expenditures that qualify for the solar tax credit include:
- Solar equipment
- Mounting racks and fastening systems
- Labor costs for on-site preparation and installation
- Electrical equipment and conduit and wiring to connect the system to your home’s electrical service
On the other hand, a roof replacement made solely to change the style or because of a roof’s age and condition does NOT qualify for the solar tax credit.
Always seek the advice of your own tax professional.
Be cautious of companies that have a drafted letter claiming eligibility for 30% tax credit.
Here are 3 areas where the tax credit may be applicable:
- If it is necessary to modify a limited part of the roof to accept the panels
- When protective roof materials are required in racking systems such as for carports, parking lot light posts, and car charging stations.
- When solar power-producing roof panels, mats, and shingles are part of the structure versus attached to it.
At American Solar…
We have over 30 years of helping families find the custom solutions that make sense for their lifestyle. Let our expert team take the complexity out of this process and partner with you for your best results.