Confused About Solar?
Sometimes when I read online reviews of solar manufacturers and solar installers, it becomes obvious that some people do not understand the process of having residential solar installed or who’s responsible for what after the fact. I get it and know why – there’s lots of misinformation and confusing info out there!
Hopefully this blog post can bring some clarity to the journey of going solar as I talk about:
– Solar panel manufacturers and the quality of different panels
– Solar installation companies and the different business models (turnkeys, dealers, brokers)
– The different financing options available when going solar
Solar Panel Manufacturers
It seems people get confused with solar manufacturers versus solar installation companies, so let’s start with manufacturers first.
Fabrication and Distribution
There are dozens of solar panel brands produced by solar manufacturers around the world. It’s easiest to compare these manufacturers to car manufacturers – Ford, Mercedes, BMW. When you want to buy a new Mustang, you don’t go straight to the Ford plant, you go to your local Ford dealer, right? Well, the same principle exists when you want to buy solar for your home.
Without getting too technical, solar panel manufacturers partner with solar cell makers to produce their panels in a certain location – i.e. United States, Philippines, Taiwan, South Korea, China – and the panels are then distributed all around the world.
Solar installation companies, big or small, then acquire the panels from the manufacturer and sell them to solar-going customers.
Solar panels are rated based on their efficiency levels. Some cheaper panels have relatively low efficiency. Sure, they cost less, but you’ll need more of them to produce the same amount of electricity a system using higher efficiency panels will generate. Lower efficiency means lower wattage output.
Other factors that vary between solar panel brands are quality and warranties – just like cars. Do the panels come with a 10-year warranty or a 20-year? How reflective is the glass? Do you want blue or black panels? These are things to keep in mind when considering solar panel brands.
In my opinion, the choice is clear when considering a piece of equipment that you’re going to own for the next 20+ years – go with the best.
There’s one solar manufacturer, SunPower, that is unique for a couple reasons: quality and leasing.
SunPower makes the best panels in the world, hands down. There’s no arguing it. They have patented technology in their panels that gives them the highest efficiency rating in the world. They also have the industry’s best warranty – a ridiculously awesome 25-year power and product warranty.
SunPower is the only manufacturer (to my knowledge) that also handles leasing and financing options themselves. In June of 2014, SunPower announced a partnership with Admirals Bank for a $200 million loan program, in addition to their lease program.
SunPower is also selective in who they let install their panels and ranks their authorized dealers as either Authorized, Premiere or Elite (Baker Electric Solar happens to be the first Elite Dealer in San Diego).
Solar Installation Companies
Arguably the more important factor in going solar is choosing the right solar company to install your system. You could be saving hundreds of dollars every month or paying for a solar system operating at 75% of what was promised, it all depends on hiring the right company.
I wrote a blog post talking about what to look for in a solar installation company. I’ll add on what I wrote in that post here.
Basically, there are a few nationwide solar installation companies (SolarCity, for example) and then hundreds of small regional companies. These companies all vary dramatically. Some will push leases and Power Purchase Agreements (PPAs). Some will only have a cash purchase option. Some do great work, some do sloppy, break-all-your-roof-tiles kind of work. You may get the perfect system that offsets your electricity bill the exact amount you wanted it to or you may get a poorly designed system that underproduces.
And with all the marketing ploys some companies use, it’s no wonder some customers get confused. Take Sunrun for example. They are national players and are in every state that has an amateur solar market. But what are they exactly? Are they a manufacturer? No. Are they a solar installation company? No. What then? They are a solar service provider, or more simply put, a broker.
Sunrun and competitor Sungevity are financing only companies and use a PPA business model. They form partnerships with local solar installers in the states they operate in. What brand of panels do they carry? Well, that depends on which local solar installer you get.
Another type of solar installation company, like Baker Electric Solar, is the ones that are licensed electrical contractors that handle a homeowner’s purchase, permitting and installation of a solar system. They are turnkey, one-stop shops that offer various products and financing options. They can vary in size, quality and service area.
How They Come Together
Solar companies that have a PPA/lease business model typically don’t talk solar panel brands with customers because they’d rather focus on how much money customers will save each month with no money down – which is true, customers do save money. Some customers could care less what the brand of panel is on their roof – whether they’re paying Ferrari prices for a KIA or not doesn’t matter as long as the payment is lower than their electric bill, and that’s fine.
But for the customers that want to lease, and do care what brand of panel goes on their roof or grounds, there’s another option – find a solar installation company that offers leases and several choices of top-quality panels. Remember, better quality panels can mean fewer panels needed. This fact is especially important for homes that do not have a lot of south-facing surface area on the roof. When you go with a solar installation company that offers leases and top-quality panels, you’ll have a lot more options.
If you plan on buying your solar, it’s hugely important that you consider the panel manufacturer and installer. You’ll want a strong warranty on the panel itself and you’ll want your contractor around to honor any workmanship and manufacturer warranties.
Finding the Right Solar Company
A good place to start is how you are going to get solar. Do you want to purchase, lease or finance your solar? Do you know the benefits of each?
From there, find a solar company that offers the option you want. What brands of panels do they carry? How many installs has the company done? How long have they been around? Do they just do residential installations or commercial solar as well?
Keep in mind that cost is not everything. Sure, one company can be hundreds, if not thousands, of dollars cheaper than another, but if they don’t design your system properly or do a sloppy install resulting in water damage from a leaky roof, you can potentially spend way more than the savings over the life of the system.
Cash Purchase, Financing, PPA, Lease, Pre-paid Lease
I’ve talked a lot about financing options, so I thought I’d give a brief description of each.
Cash Purchase – Exactly what it sounds like. You throw down the cash, up front, for your system. You get all the tax credits and can typically expect an ROI in about 6-8 years, giving you many years of free electricity.
Financing – Whether you go to your own bank or your solar company helps you through a partnership of their own, if you want to purchase your system but don’t have the cash, you can finance the purchase – with interest, of course.
PPA – Sometimes referred to as SPPA (solar power purchase agreement). PPAs are kinda confusing. They require a power provider (solar service provider) and a power purchaser (homeowner). Basically a solar services provider (like Sunrun) coordinates the financing, design and installation of a solar system on a host site (a homeowner’s roof). The homeowner then purchases the electricity the solar system on their roof generates at a rate even to or slightly below current electricity rates. The rate can be fixed but often includes an annual escalator. This is completely my opinion, but it seems that PPAs benefit the SSP and third parties way more than the customer.
Lease – Just like a car lease, homeowners can lease a solar energy system from a company. You pay a fixed monthly rate for 20 years, own the power your system generates, and enjoy a lowered or non-existent electricity bill. Service and replacement of equipment is provided to you at no cost for the length of the lease.
Pre-paid Lease – Just like a lease but you pay the entire lease payments up front (interest-free).
Hopefully that helps bring some clarity to going solar. If you have questions, leave a comment below! Wondering what panel brands we carry? Check them out here.