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5 Tips for Considering Solar Energy for Home Use

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You don't have to live in a California mansion and drive an electric car to benefit from what solar energy has to offer. It’s the versatility of solar energy that makes it a great choice for homeowners across the country. From an average-size system of 5-6 kW that will offset (or nearly eliminate) your monthly utility bill to a small off-grid system of 2 kW for a cabin requiring back-up power, solar energy offers myriad benefits.

It takes two key ingredients to turn solar into a success story for homeowners: highly-rated solar contractors who know what they are doing and educated homeowners who know what they want. So how is this achieved? By making sure that you don't fall into the following common traps:

Not having the right expectations

If your main motivation is to help the environment, then solar can be a great option, but if you are also installing solar panels to save money, then you need to understand the economics of your decision. For example, if the electricity you are buying from your local utility is relatively inexpensive, then you may not recoup your solar investment. Other factors that affect the profitability of solar panels are the amount of sunshine you receive, the cost per watt of panels and the available financial incentives, such as the 30% federal investment tax credit (ITC). To determine if solar energy makes financial sense for you, you need to compare the levelized cost of solar energy to the cost of electricity from your utility and see if you’ve reached grid parity. When solar electricity is cheaper than electricity from the utility, it makes financial sense to consider solar energy.

Jumping in before making sure that solar is right for you

While solar is great for many homeowners, it's not suitable for everyone. If you are considering a rooftop system and your home is surrounded by trees or in the shadow of a large building, solar panels will not work as they are intended to. If your roof is oddly configured, or very old, or facing north (in the northern hemisphere), rooftop solar may not be the right choice. In this case, you could consider a ground-mounted system if you have the land for it, or look into community solar, where you (and many others) benefit from a solar project built elsewhere.

Not finding more than one highly-rated installer

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Getting a second (or third) opinion will arm you with more information and help you get the best price. When considering which installer(s) to request quotes from, a good place to start can be consumer reviews, such as Google and Yelp. In addition to the individual ratings and reviews, consider the total number of reviews the company received and whether the reviews were actually for a solar installation job (there are general contractors, roofers, even plumbers who are getting into the solar business,  and some of them may have hundreds of positive reviews, but not for their solar business). You can also check out their Better Business Bureau rating. Sunmetrix Installer Reviews brings together both Google and Yelp reviews for solar installers into one place, making it easier for you to find the best installers. When you do receive your quotes, scrutinize the warranty information, especially workmanship warranty and the protection for your roof from any damages during the installation of your solar PV system. As much as possible, try to get quotes for similar systems, using the same type of equipment so that you can compare your quotes more easily.

Skipping your homework on price trends

Installation prices are going down, but stabilizing. The average cost per watt of installing solar panels in the United States is $3.09/watt, according to the National Renewable Energy Laboratory. However, there is a great deal of variability in this price across the United States. Depending on where you live, the cost per watt may be higher or lower than this average. Knowing what the average cost per watt is where you live can help you evaluate the quotes you receive from installers. However, it’s important to recognize that the cost is also going to vary depending on the type of equipment used: micro-inverters (as opposed to a central-inverter) and high-efficiency panels will be more expensive. You don't necessarily need the fanciest solar equipment, but make sure that the brands that are mentioned in your quotes are quality brands. The lowest priced offer may still be the best one, but just make sure that you understand the trade-offs between different offers you'll receive.

Focusing only on the monthly payment

As most homeowners cannot make an outright purchase for their solar system (a purchase that is comparable to a car), they find themselves with a choice between a solar lease or a solar loan. The key difference here is ownership: in the case of a lease, your solar panels are owned by a third party, which means that you cannot benefit from the ITC or other state incentives, whereas with a solar loan, the panels belong to you, enabling you to take full advantage of the available financial incentives. It’s also important to note that in the case of a lease, issues can arise if you decide to sell your home, as not every prospective buyer will be interested in taking over your lease, so be sure to consider the fine-print, including whether you can eventually own your system. Today, both leases and loans often come with a zero-down option, making them attractive options at first glance, but be sure to look into the details: is there an initial set-up fee, what is the escalation rate (the amount by which the month payments will increase over time) and what will be your return on investment. If you are trying to figure out whether the lease or loan is better for you, the Sunmetrix Buy or Lease Calculator can help you calculate your return on investment, because it’s not just about what you pay each month, but about maximizing the benefits of your investment over the lifetime of your panels, which is 20-25 years on average.

It's not too difficult to avoid these mistakes...especially when you find a trusted advisor who can work with you to navigate these challenges and help you make the best investment for your particular circumstances.

Simone Garneau is the co-founder of Sunmetrix, a consumer education website for residential solar energy. In addition to 200+ articles, Sunmetrix offers homeowners two main tools: Discover, a solar energy preview for your home, and GO, a solar energy test drive so that you can try before you buy.