How do you choose a solar company?
With so many solar companies vying for your business, it can feel like a nearly impossible task.
Salespeople can be both helpful and persuasive in this process, but sometimes they may intentionally or unintentionally leave out crucial key details.
Read on for five important factors you should consider as you comparison shop — some of which you might not hear elsewhere.
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.
There are environmental benefits to upgrading to solar power no matter what, but financial benefits vary based on your energy usage.
For some households, it just doesn’t make financial sense to go solar.
Therefore, 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.
Again, there are benefits to going solar regardless, but if money is a factor, your current energy usage and bills are extremely relevant to this decision.
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 specifically contribute the most 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.
But typically, consumers are more in tune with their energy use after installation, perhaps, in part, thanks to monitoring systems.
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," he explains. "We estimate that consumers use 15 percent more electricity during daylight hours after they have installed solar panels."
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:
Then there are actions that require a minimal investment of time or money:
For more detailed information, including the potential savings of each of these energy efficiency improvements, download our home energy guide.
Solar companies are eager to show you potential savings with solar, and, generally, they’re not wrong. There are lots of savings to be had over the life of your panels, and the federal solar tax credit can contribute to those savings.
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.
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.
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.
The IRS has released attractive energy incentives for individuals through January 1, 2024, including a 26 percent tax credit for solar systems installed before January 1, 2023. After that, the available credit is 22 percent of the cost of the system.
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.”
The bottom line on the solar tax credit is this: The federal incentive is a great opportunity to recoup some of your home improvement costs, but be careful not to overestimate the amount and commit to a solar system you can’t actually afford.
Companies should be upfront about this and encourage you to consult a tax professional to make precise calculations rather than guaranteeing a dollar amount.
Consider the equipment, design proposals, and installation procedures of a solar company before you sign a contract.
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:
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.
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.
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.
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.
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."
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.
Solar continues to be a growing industry, evidenced by careers in PV installation. Solar photovoltaic installer jobs have a 52 percent predicted growth rate between now and 2030 (compared to the 8 percent average growth rate of all careers).
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 warranties, time in business, and online reputation as you determine if a company really is the best.
Solar installers generally have multiple warranties. If you don’t know what exactly is covered under each warranty, you may be rightly concerned about protecting your investment.
Your solar panel warranty consists of two parts: equipment and workmanship. For most companies, the equipment warranty offered by the manufacturer is generally good for 10–12 years or more, while the workmanship guarantee lasts up to 25 years.
While most solar panels will go decades without any issues, it is 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.
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.
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.
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.
September 29th, 2022
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