Understanding Solar Quotes: A Comprehensive Guide

Use this guide to navigate solar proposals with ease. We demystify solar quotes, financials, and equipment options so you can make the right choice.
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    A Comprehensive Guide on How to Make an Informed Decision When Comparing Different Solar Proposals

    Solar is a smart choice, but choosing the right company to partner with can be difficult. How can you compare different proposals when they have so many facts and figures? At Power Northwest, we recognize the importance of empowering consumers with knowledge. In this article, we delve into the intricacies of solar quotes, system specifications, and additional offerings, providing you with the tools you need to make an informed decision.

    What’s Included in Your Solar Quotes?

    At a minimum, you want to see what type of equipment is being proposed. Be sure to look for:

    • Panel manufacturer
    • Panel wattage
    • Inverter type and quantity
    • System size (kW)
      • Both DC (capacity of the panels) and AC (capacity of the inverters)
    • Annual System production (kWh)

    The below financial information should be included as well:

    • System cost before and after any discounts
    • Fees or interest costs of any financing options 
    • State incentives that are being included 
    • The out-of-pocket cost after incentives
    • The Federal Tax Credit
    • The net system cost

    Many companies include potential savings in the cost figures.  Those should be pulled out to see the true cost of the system.  The out-of-pocket cost is what you need to pay to get the system installed.  The net system cost is the cost you pay after the federal tax credit is included.  Remove any utility savings so that you know exactly what you need to pay.

    System Financing

    Assuming you’re paying cash, make sure you ask for the system cost.  That’s your baseline.  If you decide to finance your system, compare that to the cash price to evaluate the cost of capital.  Some companies charge outrageous financing fees and try to bury them in the system cost.  Be sure to understand what the financing is costing you. 

    Check out our article on the 10 Questions to Ask Your Solar Installer to understand more things to look out for.

    Cost per kW vs cost per kWh

    A common metric in the solar industry is the cost per kW of your system.  The size of your system, measured in kW, is the wattage of each panel (in this case, let’s say 400W) times the quantity of panels (20) for a total measure of the system capacity (8,000W or 8kW in this example).  If you take the total cost of the system and divide it by your system size (kW) you get your cost per kW ($/kW).  So, if our hypothetical 8 kW system costs $25K, the cost per kW is $3.13 (25,000 divided by 8,000).

    However, not all kilowatts (system size or capacity) are the same.  See our article on System Capacity vs Energy Production for more information.  For example, you could have a high-performing 400W panel with a very low annual degradation.  Pair that with an Enphase microinverter and you have an overall great system.  But you could have a low-quality, poor degradation panel paired with a string inverter with a high inverter ratio (see our article on Inverter Sizing). That may cover your electric bill at first, but it’s inefficient and could be a bad long-term investment.

    Production Estimates and cost per kWh metric:

    The best metric to look at is the cost per kWh (notice the “h” for hour).  This is how much the system produces over time compared to the cost of installing the system.  With this metric, we’re taking into consideration factors such as panel and inverter quality, inverter ratio, site-specific conditions, etc.  

    However, be wary of contractors that don’t guarantee or back up the quoted production estimates.  Many contractors will show inflated production levels that don’t factor in site-specific conditions or real-life scenarios like shading, soiling, or voltage drop. 

    A trustworthy installer will guarantee their 1st-year production levels.  Make sure you check the contract to see if there’s some sort of assurance that the figure is accurate.  Then take the cost of the system and divide it by that number, giving you $/kWh, as we talked about earlier with our $3.13/watt system.  That should give you a good metric to work with when comparing quotes. 

    Tip: In the long run, you really want to see what the 30-year production output will be and find out what the $/kWh is over the life of the system and then compare that to what the utility is charging you.

    Solar Production Estimate

    Equipment Options

    There are three big pieces of equipment that you should ask about; panels, inverters, and racking.  Panels have various metrics, but the big ones are; wattage, efficiency, degradation, and warranty.  The wattage of each panel is important. However, what’s more important is the total system wattage, meaning what all those panels produce when grouped.  Panels come in various physical sizes, oftentimes higher-wattage panels are bigger and don’t always fit well on a roof, so the total system size is truly what counts.

    Aptos DNA 108 Bifacial Black Solar Panel
    Image: Aptos DNA 108 Bifacial Black Solar Panel

    Panel Efficiency

    Panel efficiency is important when roof space is limited.  If you’ve maxed out a roof design and you’re only able to cover a portion of the total consumption, going with a higher efficiency panel might be able to get you there.  You’ll pay a premium for that extra efficiency, though.  So, if you have the space on your roof, there’s no shame in going with a lower efficiency at a better price. 

    Another fun metric to look at is watts per square foot.  It’s a measure of the panel efficiency as a whole, not just on the photovoltaic cell level.  This takes into account the manufacturing characteristics of the panel’s frame and cell layout.

    Degradation

    Degradation is arguably the most important characteristic of solar panels.  It’s so important, that panel makers will guarantee certain levels of production.  They call it the power warranty.  This is like guaranteeing the miles per gallon of a car.  Essentially, the moment you put solar cells in the sun they start to degrade.  Fortunately, technology has come a very long way and the degradation rate is amazingly slow. 

    For example, to be considered Tier 1, the degradation rate must be less than 0.05% every year and after 25 years the panel must be able to output 80% of the power that it could on day one.  There are some manufacturers who have really pushed the limits, guaranteeing their power output to 85% or even 86% after 25 years.  A couple of manufacturers in fact have been able to guarantee 92% power output after 25 years.  

    Keep degradation in mind when sizing your solar system.  This is a reason that some customers opt for a bit larger systems, knowing that over time their system will produce a little less each year.

    Panel Warranties

    In addition to a power warranty, panel makers offer a 25-year manufacturer warranty.  This is the guarantee that the nuts and bolts aspect of the panel will continue to function as it should.  Some less expensive panels will offer a 25/12, essentially, a 25 year production warranty and then a 12-year manufacturer warranty. 

    One other thing to look for is how the warranty handles labor costs.  Top-tier panel manufacturers will pay an installer to come out and replace a defective panel.  Less expensive panels will have a warranty that covers the cost of the replacement panels, but you’re on the hook for the installation.

    Inverters

    Inverters come in various shapes and sizes.  The two main types are String inverters and Microinverters.  There are a few 2:1 micro inverters out there which are cheaper.  For a better understanding of inverters, see our article on Inverter Sizing.  Our choice inverters are the Enphase 1:1 microinverters and the Tesla String inverter (good for non-shaded applications where you’re looking to save some money). 

    Our selections are based on years of experience working with various products.  Enphase is by far the best inverter on the market, but they are expensive.  Tesla’s inverter is very affordable but isn’t ideal if there’s any onsite shading.

    Enphase IQ8-60-M-US Microinverter
    Image: Enphase IQ8-60-M-US Microinverter

    Racking

    Racking is what attaches your panels to the roof.  You want a racking system that comes with a long warranty, will keep all penetrations waterproof, and is black as opposed to silver or mill (that is as long as you care about aesthetics).  Some installers use silver rail because it’s cheaper, but it also looks cheap.  You should also specify that you want “hidden end clamps”.  These are specifically designed clamps that allow your array to have the rails tucked underneath as opposed to running out past the ends of the panels.

    Above all, make sure that your solar proposal includes which materials they plan on using for your project.  Some installers leave material items nebulous on purpose so that come the time of installation, they can purchase the cheapest equipment possible. 

    solar panel system waterproofing using flashings

    Warranties

    Be sure to check and understand all of the warranties from the manufacturer as well as from the contractor.  You want to know who’s paying to replace one of those panels if it’s defective.  The manufacturer or the installer?  And for how many years? 

    Timeline

    The sooner you can get your solar system installed the better.  Every day that the sun is shining is cash that should be going into your pocket.  While no installer can guarantee permit approval times, they do have control over how quickly a site visit can be scheduled, how long it takes them to apply for permits, and how quickly they can get you installed once permits are approved.  It’s great to ask these questions and see what your installer says.

    Available Additions and Add-ons

    We understand that one size does not fit all. Our range of additions and add-ons includes batteries, EV chargers, meter or MSP electrical upgrades, structural reinforcement, re-roofing for solar preparation, consumption metering, and critter guards. These options allow homeowners to customize their solar systems for optimal efficiency and functionality.

    Be sure to select a proposal that includes the various adders that you’d like to include and be sure to get line item pricing for each adder so that you can easily see who has the most competitive figures.

    Summary on how to make an “Apples-to-Apples” Comparison

    • System Size (kW): Consider both DC and AC system sizes.
    • Cash vs. Financing Options: Clarify pricing differences between cash and financing proposals
    • Price per Watt ($/W): Evaluate the cost-effectiveness of the system.
    • Production Estimates (kWh): Look for guarantees and consider $/kWh as a metric.
    • Equipment Options: Evaluate panel, inverter, and racking selections.  Look for Tier 1 panels with low degradation, Enphase microinverters, and high-end racking that will provide secure, waterproof connections in a black finish.
    • Warranties: Check if the manufacturer offers a labor warranty.
    • Installation Timeline: While no installer can guarantee permit approval times, inquire about the post-approval installation timeline to gauge scheduling commitments.
    • Adders: Understand what’s included (or not) in the system price and get line item pricing on adders such as electrical upgrades, EV Chargers, re-roofing, etc.

    As you can see, reviewing solar proposals can be complicated.  If you want, you can always ask us questions about how to compare different system designs to make sure that you’re selecting the very best proposal.  We also suggest reaching out to Solar Oregon, a non-profit that provides a non-biased approach to solar and can help you make an informed decision.

    Finding Contractors: Practical Tips

    • Utilize search tools like Google Search looking below the sponsored links for results that pop up organically.
    • Read customer reviews: sort by Lowest and Most Recent
    • Select a contractor that has core values that align with your beliefs
    • Consider Environmental Impact: Choose a company with a warehouse near your home to reduce carbon emissions from truck rolls. Utilize search queries like “best solar company near me.”

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