Friday, February 17, 2023

Tips for getting a home solar system in California

I recently signed a contract to get solar for our home
and I learned many things during my hunt for the best system. 
Here are my tips! 
(I will update this post as I learn more during the design and installation process.)

Here are some of the first things to consider before contacting any solar companies

  • Is your roof recent and in excellent condition? You don't want to put solar on an old roof.
  • Can you self finance or pay outright? The best and fastest payback is if you have no loan or a low interest loan.
  • You can definitely get financing from the installer, and it's worth looking at, if you can't self finance.
  • Will you stay in the house long enough for the investment in solar to pay off?
  • In my experience, if the system is not financed and is purchased outright, it will payoff in about 4 or 5 years. If it's financed, it might be twice that long.
  • It’s possible that the system adds some value to your home, but I wouldn’t count on that.
  • Besides outright purchase or financing options, the last option is a lease or PPA (power purchase agreement). These are the least attractive... but it is possible they work. They should just be approached very carefully. Note that you don't own the system with these, and that can make for problems, especially if you want to sell your home.
  • Imagine your electrical bill is $200 per month. In that case, every extra $200 you pay for a solar system is an extra month it will take until you break even on the purchase. And a solar system that is $1400 more expensive is an extra year!
After that, there are technical details and contract details. Those are very important, but I think the stuff above needs to be figured out first.

First steps

I'd suggest putting your info in and seeing what quotes you get, it does provide a solid starting point. But be aware the stuff responses you get are "proposals" or "quotes" and the next step is getting an actual "contract" from them... and the details on those contracts can really matter. I would narrow down the field from the energysage proposals but I wouldn't select one until considering the actual contracts. And after getting the first energysage proposals, I'd also directly contact 2 or three reputable local companies to compare, as many of the best companies are not available through energysage.

But energysage is a quick and easy start, consider just doing that right away. You will learn a lot from those responses.

After you receive the initial quotes

Request that all the companies re-quote based on the same “size” system. (eg: 8000W or whatever size you decide is best). It is impossible to compare quotes that are different sizes.

Consider whether you need string inverters, power optimizers or microinverters. This choice will likely eliminate some of the proposals.

The quality of the equipment matters somewhat. But really solar is a FINANCIAL choice: how do you get the cheapest electricity? As long as the equipment is reliable and doesn’t perform too much worse as it ages, things are good. The best equipment will degrade less as it ages, but you still don’t want to pay too much for that extra performance.

Price per Watt

The key way to compare proposals/quotes and contracts is by “price per Watt”. You take the total cost of the system (before any tax incentives) and divide by the total size of the system in Watts.

Check typical Cost/Watt for your zip code

Note that after putting in your zip code, you can select how many entries to show at a time. You can also do a “Secondary Search” for specific contractors. I prefer to sort the results by “Date” so I can see the most recent pricing.

The pricing does seem to have a giant range, but this may be because of different types of contracts and different system sizes.

Pay attention to panel degradation rate.

One of the big differences between different solar panels is their degradation rate. For instance panel “A” may have a degradation rate of 0.25% per year, meaning that it should still have 92% of its performance after 25 years, and Panel “B” may only have 86% of its performance after the same amount of time.

A slightly cheaper panel may be a worse choice if it degrades faster.

Pay attention to the warranty, especially the labor.

Does the warranty cover labor and will that company be around and available to honor the warranty? For instance, note that microinverters are installed under the solar panels, and they are more likely to fail than the panels. So the panel will need to be removed to replace the microinverter. Make sure the warranty covers degradation too.

That said, how many companies are really around to honor 25 year old warranties? A warranty from a small company that goes out of business isn’t worth much.

Don't only compare proposals or quotes, compare the contracts!

The proposals are almost meaningless, as no one signs them. All the important details are in the contract. For instance, if you want consumption monitoring, or particular racking equipment, make sure it is listed in the actual contract. Remember, no matter what the salesman or the proposal or quote says, they won’t be required to do anything that isn’t listed in the contract.

System resizing after the site visit or measuring

There is a strong chance the system design will change after the solar company comes to do detailed measurements of your roof. This typically happens after the contract has been signed. So what happens if the system needs to be made smaller or larger by a couple panels? Does the contract specify how the system is repriced? I have not yet seen this situation described in any contracts. However, I would suggest you ask the company how this happens before you sign the initial contract. I would want an answer like; “If the system is only changing by the number of panels, we reprice the system based on the same price per Watt as the original system.” And be ready to change vendors if a change like this is needed and the vendor does not keep to the same price per Watt.

Pay attention to roof and solar system maintenance requirements.

Some vendor’s contracts specify that you MUST use them to do repairs. For instance, you may own the system, but if you need some roof repairs in 15 years they may require that you use them to do the repairs to maintain the warranty. Some vendors may just require that you use them for anything that requires touching the panels.

Here is an example of a bad clause hidden in a contract that requires you to use that company for future work at whatever they wish to charge you: …”IF THE CLIENT CHOOSES ANOTHER ROOFING CONTRACTOR THE CLIENT WILL INCUR COSTS ASSOCIATED WITH THE REMOVAL AND REINSTALL AND WILL SCHEDULE A SOLAR SYSTEM REMOVAL AND RE­INSTALLATION WITH <company name>.”

Pay attention to the payment schedule.

In California, the contractor is forbidden by law from accepting payments (besides the max $1000 deposit) that are for work that is not yet completed or materials that have not been delivered to the customer. They may not ask you to pay for panels that are not on your property. For instance, a plan that requires payment of 90% of the total “prior to the start of construction” is clearly in violation of the California law.

Note this even applies to financed installations!

The California law:
“Except for a downpayment, the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered. The prohibition prescribed by this paragraph extends to advance payment in whole or in part from any lender or financier for the performance or sale of home improvement goods or services.”

These are examples from actual contracts I was offered:

Example “illegal” payment schedule:
  1. Down payment: $1000
  2. Due at permits: 30% (illegal if getting to this stage did not cost this much)
  3. Due prior to start of construction: 60% (clearly illegal!)
  4. Due at building inspection: remainder (final payment should be after Permission to Operate)

Example “better” payment schedule:
  1. Down payment: $500
  2. Completion of Design and Engineering: 30% (illegal if getting to this stage did not cost this much)
  3. Delivery of Materials: 50%
  4. After city final inspection is approved: Remainder (approx 20% - final payment should be after Permission to Operate)

Example “good” payment schedule:
  1. Down payment: $1000
  2. Deliver of Materials to customer: 70%
  3. Approval to Operate from <power company name>: 30%

Pay attention to performance clauses.

What happens if you need to delay the installation or even cancel? Some contracts require you to pay all the companies profit even if they never install the system! Here is a real example of a ugly cancellation clause: “Customer may terminate its performance of this Agreement for convenience, provided that Customer immediately pays <company name> for all costs incurred through the date of termination, measured as a percentage of the Work's completion, plus any demobilization costs and a fee in the amount of 20% of the Agreement Price for <company name>’s lost overhead and profit.”

Consumption Monitoring

(This discussion is for Enphase brand systems, I’m not sure if it applies to others.) Typically the equipment that comes with your solar panels will allow you to monitor your solar panel’s production or output. However, you won’t be able to tell whether you are still using power from your utility (or sending power to them) until you get your bill at the end of the month. If you want to monitor, in real time, whether you are using power from the utility you will need “consumption monitoring”. With Enphase, consumption monitoring requires the addition of two current transformers (CTs) to your electrical service panel. These CTs are relatively inexpensive (about $52), but may not easily fit your service panel. Some solar companies may install these for free if they fit, and others may charge for the installation. If you want this feature, it is worth discussing the cost before signing your contract.


Most solar installers get the equipment (solar panels, inverters, etc.) from a distributor. That distributor drop ships the equipment to your home on the morning of the installation. You will likely receive a "Preliminary Lien Notice" from the distributor. What this means, is that if the installer doesn't pay the the distributor, they will demand payment from you and will put a lien on your house until you do so. This protects the distributor, no matter what, and can really hurt the homeowner! The only way to avoid this is for the homeowner to pay the distributor directly with a separate check. This provides proof that you have paid the distributor. I suggesting making sure this is explicitly allowed in the payment schedule in the contract. More detail here.
Also, make sure the contract specifies that you will receive an "Unconditional Waiver and Release" form from your contractor when you provide the final payment as a cashiers check.  Do not make your final payment without obtaining this release from your contractor.

No comments:

Post a Comment