8 Things to Look For When Choosing a Solar Company

How do you choose a solar company?

With so many solar companies vying for your business, it can feel like a nearly impossible task to pick the right one.

Salespeople can be both helpful and persuasive in this process, but sometimes they may intentionally or unintentionally leave out crucial key details. And that doesn’t make it any easier to know which solar company to choose.

As you speak with solar sales reps and as you do your own solar company research, knowing what things to look out for is key — you don’t want to miss any important details that could cost you later in the solar process.

Read on for eight important things to look for when choosing a solar company — some of which you might not hear elsewhere:

1. Energy efficiency expertise
2. Realistic solar savings estimates
3. Solar company vertical integration
4. High-quality solar equipment
5. Solar energy storage options
6. Solar warranties
7. Solar monitoring and maintenance
8. Solar company reputation

 

It should go without saying that you’ll want to choose a solar company that’s an expert in solar energy. But it’s also important to consider a company’s expertise in energy efficiency practices beyond solar.
 
While solar panel installation packs a powerful punch in the name of cleaner, greener energy, it’s not the only piece of the puzzle. Solar companies should be aware of and encourage any habits and upgrades that can maximize energy efficiency and savings for the consumer, such as the following:

Energy-saving habits

A good solar installer will acknowledge that energy use habits — regardless if you have solar or not — are the biggest predictors of your energy bill. Heat and air conditioning are typically the highest contributors to a household’s energy use. 

This is why, in many regions, power bills tend to be larger in the middle of the summer or winter than in the milder seasons of spring and fall. 

Accordingly, prospective customers can experiment with when and how they use lighting, heating and A/C, and appliances to reduce their power bill whether or not they purchase solar power.

If customers do install solar, they should be just as mindful of energy usage after install, if not more so. Occasionally, we observe from interactions between customers and companies in our reviews that some customers disregard energy-saving habits after getting solar, thinking that they have unlimited free energy to work with. 

Michael Henderson, managing director of Solar Calculator, says he finds that consumer habits generally change after a solar installation.

"For example, consumers are more likely to use the washing machine and dishwasher during daylight hours knowing that their system is generating solar energy at that time," Henderson explains. "We estimate that consumers use 15 percent more electricity during daylight hours after they have installed solar panels."

But typically, consumers are more in tune with their energy use after installation, perhaps, in part, thanks to monitoring systems.

Supplemental home improvements

While solar panels are an important part of a move to energy efficiency and greener living, solar is just one piece of the bigger picture. The more efficient your home, the less overall energy you need. Making one change is good, but making many changes is even better. 

Solar salespeople should know this and encourage habits and improvements (beyond solar) to maximize your energy efficiency. 

Several other energy upgrades can work in tandem with solar, including the following:

• Upgrade siding
• Replace roof  
• Insulate attic and ductwork 
• Replace furnace filter
• Install a smart thermostat
• Replace windows and doors
• Switch to LED lighting
• Switch to smart outlets
• Replace water heater, faucets, and showerheads
• Upgrade to ENERGY STAR® appliances

Then there are actions that require a minimal investment of time or money:

• Unplug devices
• Turn off lights
• Air dry dishes
• Take shorter showers 
• Close and/or cover vents in less-frequented rooms 
• Seal holes around outlets and gaps under doors
• Use thicker blankets and curtains

 

Solar companies are eager to show you how much money you could save by going solar, and you will likely save a lot.

However, a solar installer shouldn’t be promising a certain amount of utility savings with solar until seeing an accurate record of your energy usage and costs over the course of a year. So make sure you get a personalized quote before getting caught up in a sales rep’s solar savings pitch.

But when you get a quote, be sure to factor in any applicable minimum utility charges, loan payment obligations, and your unique tax situation, all of which can impact the extent of your savings with solar.

Minimum utility charges

Even if you generate enough solar power to offset all of your usual energy costs, you may still have a utility bill. 

When you switch to solar, it’s not usually a perfect kilowatt for kilowatt swap, eliminating any need for power from a power company. Rather, you can expect to reduce your dependency on the grid. This, too, depends on the number of panels you install, but most solar customers tend to maintain a utility bill, even if it's reduced. 

Sadly, some customers overestimate the utilities savings they’ll have based on solar company promises. As you comparison shop, opt for a company with a performance guarantee that protects your investment with the savings promised in your signed agreement.

Additionally, if you use more overall electricity than you produce, you’ll be billed by your power company in the form of a true-up bill, which settles any differences at the end of the year.  

Solar loan payments

Don’t forget: if you’re financing your solar system, you’ll have a monthly loan payment in addition to — or, if you’re lucky, in place of — your utility bill. 

If you’re a newbie to solar financing, we’ll walk you through some of the options available. Each of these options has positive and negative aspects to consider.

• Solar-specific loan — Your installer may offer these loans directly or have a lending partnership with a third party. 
• Home equity loan or line of credit (HELOC) — You can put your home equity to work by using it to pay for all or part of your solar energy system. 
• Green energy loan — Most of these personal loans have fairly low interest rates. This option allows you to own the equipment and pay off the balance over time, often within 7–8 years. 
• PPA (Power Purchase Agreement) or lease — With a PPA, you are essentially renting the equipment and paying for the energy you use. Leasing options are similar in that you are renting the equipment, but instead of paying for what you use, you pay a set amount every month. Keep in mind that with both of these options, you do not own the equipment. And be aware that, while they are technically cheaper, these contracts can include an annual increase of your interest rate.
• PACE loan — The PACE (Property Assessed Clean Energy) financing program was created to make eco-friendly home improvements more accessible and affordable for low-income homeowners. Currently, PACE financing for solar panel systems is only available in California, Florida, and Missouri. This type of financing is tied to your property and is paid back through an increase in your property tax bill.

All of the financing options outlined above can be a great way to make going solar easier and more affordable. However, we advise caution regarding PACE loans, which are a valid financing option but are typically viewed as a predatory lending practice because they are secured by your property. Thus, if you’re unable to make payments, you could lose your home. 

In addition, some solar sales reps may advertise PACE as a federal government program, providing a false sense of security in pursuing it as a financing option. PACE is not a government program; it is a tax lien administered by private companies. If a solar company sales representative recommends a PACE loan or refers to it as a government program, this should raise a red flag.

While PACE loans typically have a bad reputation in the industry, there are some advantages of the PACE program including low, fixed interest rates and no money down. However, make sure you know all the details and have carefully assessed your own financial situation before pursuing this option.

Tax benefit considerations

The IRS has released attractive energy incentives for individuals as a part of the Inflation Reduction Act through 2032 including a 30 percent tax credit for solar systems installed from 2022 to 2032. 

However, one misconception is that this is a straightforward check written out to you by the government when you file your taxes (like the Covid-relief stimulus money). Rather, the credit applies to any taxes owed for that calendar year, so your take-home will vary depending on your financial situation. Your actual tax refund may or may not reflect the full amount.  

To illustrate this important distinction, Stevenson shares an example of how misunderstandings around the tax credit can be detrimental to solar customers. 

She received a phone call from a potential client in February 2022. The client thought she was getting a 25 percent credit on her tax return equal to an approximate $18,000 refund from a recent solar panel installation in Texas in late 2021. Her plan was to use this refund to pay down her debt. 

Stevenson explained to this client how solar panel credits work and that, if she were lucky, she might see a credit to reduce her tax to zero. The only refund she would then get (based on the information she shared) was the amount of withholding tax taken from her paychecks, not $18,000. 

Stevenson told the client to look at her W-2, and she might get her withholding back in box 2, if she could zero out her tax based on this solar panel credit. 

“I assured her she was not getting an $18,000 refund this year, and she should not count on that money to pay debt,” Stevenson explains. “I felt really bad for her, but I was not going to sugarcoat the truth.”

Companies should be upfront about the solar tax credit and how much money you can expect to recoup on your tax refund. If in doubt, it is always a good idea to consult a tax professional to make precise calculations rather than making assumptions about specific dollar amounts.

 

As you’ve been researching going solar, you’ve probably come across a lot of companies and they all look pretty similar on the surface — they install solar panels. But, there are different types of solar companies to be aware of.

One thing that we’ve noticed on BestCompany.com is that a lot of solar company profiles mention “vertical integration”, referring to a type of solar company. To us this indicates that companies are intentionally differentiating themselves this way and that customers are concerned about it too. 

But what does “vertical integration” even mean?

In the world of business, vertical integration refers to whether or not a company owns and operates its own supply chain.

In the solar industry, vertical integration is often referred to as whether a company is “full-service” or not. A full-service solar company will typically manage multiple, if not all, stages of the solar process in-house — from solar quote to design and installation. And that can have many benefits for you. 

Some benefits of choosing a vertically integrated or full-service solar company include the following:

• Quality control — A vertically integrated solar company controls many or all aspects of its supply chain, allowing it to maintain tighter control over the solar process. This can lead to better quality assurance because the company oversees every stage of the process instead of outsourcing work to subcontractors.
• Cost efficiency — A vertically integrated solar company can potentially lower costs because they’re able to streamline the solar process by optimizing its own processes and eliminating markup costs associated with multiple intermediaries or subcontractors. However, installing solar panels is an investment no matter which company you’re working with, so cost differences in working with a vertically integrated versus non-vertically-integrated solar company may be slight.
• Time efficiency — A vertically integrated solar company may offer a more time-efficient solar process because it is not outsourcing work. If a solar company isn’t vertically integrated and is working with subcontractors at different points of the solar process, communication can become more challenging, which can affect the length of the process overall. 
• Seamless customer experience — A vertically integrated solar company can provide a more consistent and coordinated customer experience because they are a one-stop-shop service, versus a non-vertically-integrated company that works with multiple subcontractors and can’t oversee all on-site work being done.
• Adaptability and flexibility — A vertically integrated company can typically adapt more quickly to any disruptions or delays in the supply chain, which can contribute to more time and money saved in the overall process. In addition, if there were any disruptions in the solar installation process, the company could adapt more quickly because it manages the equipment, installers, etc.

It’s important to note that whether or not a solar company is vertically integrated isn’t necessarily an indicator of quality. And companies that work with subcontractors and other third parties are typically able to service more areas than companies that are vertically integrated. But it is still something to look out for in your solar company search.

 

Consider the equipment, design proposals, and installation procedures of a solar company before you sign a contract.

Solar panels 

Monocrystalline solar panels are black in color and have the highest efficiency rate, requiring the least amount of space. Thus, they are a great option for people who do not have a large roof. However, they are the most expensive choice for solar panels.

Polycrystalline panels are known for their blue color and are a great choice for people who have plenty of space and do not want to pay the high price that comes with higher-efficiency monocrystalline panels.

Whichever solar panels you decide are best for your needs, discuss solar panel types with your prospective solar companies. Some companies only specialize in a particular type of solar panels. 

You will also want to ensure that the solar panels are high-quality and from reputable manufacturers. We recommend the following reliable brands: 

• LG
• Panasonic
• Q CELLS
• REC
• Silfab
• Solaria
• SunPower

According to durability tests, the efficiency-degradation rates for panels vary from 1 to 35 percent. This indicates that some solar panels hold up much better long-term compared to others, so comparative efficiency ratings are worth looking into. 

With the current technology, all solar panels will gradually decrease in efficiency over time.

Mounting hardware 

All that being said, most solar companies use only high-quality solar panels. 

It’s a good idea to confirm, but other details might be even more crucial, such as the mounting hardware that should last just as long as the solar panels themselves.  

Roofing 

Another often-underlooked part of solar installations is the roof on which panels are installed. Solar panels last approximately 25 years on average, so for most homeowners, it’s a good idea to at least consider roofing implications prior to installing solar. 

Panel placement

Solar panels can, in fact, absorb energy from indirect sunlight by capturing different parts of the light spectrum from the sun. Therefore, your panels can still produce energy with partial exposure to the sun, as long as nothing is blocking them. 

However, they work more efficiently in direct sunlight. Keep your roof position in mind as you work with a solar company to design your system in order to maximize sun exposure.

 

Some companies offer solar energy storage systems, also known as batteries. And some do not. If off-the-grid living is your goal with solar, you’ll need one.  

Power outages 

One misconception with solar is that you’re completely energy-independent. Many homeowners don’t realize that the majority of traditional solar panel systems require a grid connection to operate. So even with solar, you’ll still lose your power during an outage — unless you have a battery installed. 

When a utility power outage occurs, panels without solar and storage are unable to continue providing power to the home, as the solar panel system is connected to the grid through a solar inverter. Generated solar power can feed back through power lines, potentially endangering those working to restore utility power transmission. 

"Even on a sunny day, solar without battery storage can only provide power to a home during the daytime, and homeowners are left to rely on the power grid during the night," explains Ben Polito, president of Energy Storage Systems, Generac. "However, with the addition of integrated battery storage, solar panels can continue converting sunlight into electricity and the battery storage system can use this to continue powering a home." 

Battery costs 

Batteries produce a big return in the form of peace of mind, emergency preparedness, and independence from the grid. But cost-wise, the investment of an energy storage system takes longer to recoup than solar panels alone. 

If a company tells you a battery will save you money on your power bill, that’s unlikely to be true. One exception would be if you use an exorbitant amount of power at night. 

 

While most solar panels will go decades without any issues, it’s important to have a solid warranty in case something does happen. Get your company’s warranty details in writing before committing to a solar installer.

Solar companies typically offer a few types of warranties that cover different aspects of a solar system. When you’re trying to choose a solar company, look out for the following types of warranties:

• Product warranty — A product warranty covers solar equipment, such as solar panels and inverters, against defects and/or premature failure. These warranties typically last from 10 to 25 years.
• Performance warranty — A performance warranty guarantees a certain standard of energy production over a specified period of time. Most solar companies will guarantee a certain level of efficiency (for example, 80% to 90% of the initial power output) over a set number of years (typically between 10 to 25 years). If equipment underperforms and isn't functioning efficiently, the solar company will typically compensate for the difference in energy output.

Most solar companies offer product and performance warranties, and they are the most important warranties to look out for. But some solar companies may offer additional warranties (which many companies may include in product or performance warranties), such as the following:

• Installation or workmanship warranty — An installation or workmanship warranty covers the quality of the solar panel installation provided by the company. This type of warranty can last for 1 to 10 years, but that depends entirely on the solar company.
• Inverter warranty — A specific inverter warranty is typically included with your inverter and can last anywhere from 5 to 25 years, depending on the solar company you’re working with.
• Roof penetration warranty — A roof penetration warranty covers any damage to your roof caused by installing solar panels. This type of coverage isn’t specifically offered by many solar companies, but is something worth asking about, because it may be wrapped into another warranty or not covered at all.

Being aware of the types of warranties offered by solar companies is important because you’re making a big investment by going solar, and you’ll want to make sure that that investment is protected. 

When comparing warranties offered by various solar companies, it can be important to consider warranty length. You will likely want a longer warranty (most companies offer warranties up to 25 years; it’s uncommon to see warranties longer than 25 years) to ensure your solar investment is protected for a longer amount of time. In addition, a longer warranty can indicate a company’s confidence in the reliability of its products.

More than anything, solar warranties offer you peace of mind, which is something you deserve after pursuing and investing in going solar.

 

Choosing a solar company that will install the best solar panels is important. But it’s important to think beyond installation when choosing a solar company — which you’re already doing by considering the warranties offered by the solar companies you’re researching. Take it a step further by analyzing the solar monitoring services offered by different solar companies.

Solar monitoring can be crucial for the overall performance of your solar panels. It can track energy production, detect faults or issues in the system, provide insights into how you could maximize efficiency further, and more.

In most cases, solar monitoring systems include sensors that are attached to or around your solar panels. The sensors are able to detect temperature, panel voltage, energy production, etc., which is then transmitted as data to a monitoring system. Solar companies will have different monitoring systems, allowing you to see data in real time, and some solar companies even have mobile apps that you can download and access easily on your smartphone.

If a solar company doesn’t offer any type of solar monitoring this could be a red flag, so don’t be afraid to ask companies about the monitoring services they provide.

 

Solar continues to be a growing industry, evidenced by the growing number of careers in PV installation. Solar photovoltaic installer jobs have a 22 percent predicted growth rate between 2022 and 2032. 

It’s encouraging to see the growth potential of energy efficiency in business. Wind turbine service technicians and solar photovoltaic installers are two of the five occupations expected to have the fastest employment growth from 2020 to 2030.

But small business success can be volatile, and even solar companies go out of business. 

For an investment like solar, you want to identify the best of the best. Check a company’s time in business and its overall online reputation as you determine if a company really is the best.

Time in the industry

You should also consider how long the company has been in the industry. It's not that younger companies do not provide great service, but when you choose a younger company, there is a higher risk of the company not being in business for the lifetime of your solar system’s warranty. 

This could make things very difficult for you if the company you bought solar panels from goes out of business. This means your workmanship warranty becomes moot, and you'll have to pay for maintenance services out of pocket. 

While you can’t control everything, you can choose a solar installer that is registered, well-established, and has a solid track record of post-installation follow-up.

Reviews

Finding reviews from real people who have experienced what a company has to offer can help you find a great company as well as identify red flags to avoid. Reviews are also a great way to get a feel for a solar company’s team of installers and customer service reps — you’ll be working and in communication with your solar company for a long time beyond installation, so you want to make sure that a company has a good service reputation. 

And that happens to be our particular area of expertise. Best Company is the source for solar reviews.

Solar isn’t cheap. And it’s a long-term commitment. Even after the installation, you’ll be connected with your chosen company throughout the lifetime of your panels. 

If you follow our formula for what to look for in a company, you can be confident in navigating conversations with company representatives and, ultimately, deciding on the best solar company for you.