Six Top Considerations Before Signing a Solar Panel Contract

May 13, 2022
700x253 - Solar Panels Blog

As solar technology has become increasingly affordable and efficient, a growing number of home owners have opted to make the switch to a solar energy system. In addition to generating a clean, renewable source of energy for your home, solar panels can provide you with significant financial benefits. A solar array can greatly reduce your monthly electric bills, enable you to hedge against the rising price of electricity and increase the resale value of your home. Installing one in your home can be especially beneficial in California, where the climate is often suitable and electricity rates are among the most expensive in the U.S.

But for most homeowners, going solar usually involves a contract, which will vary quite a bit depending on how you plan to pay for or finance the system, materials used, the system size and the solar company you hire. And just like any other industry, it’s not unheard of to encounter misleading claims and less than scrupulous providers when it comes to solar installation and a long-term, legally binding agreement. To protect your investment, be sure to familiarize yourself with these top missteps and false assertions about which consumer watchdogs have raised the alarm when it comes to purchasing a solar panel system for your home:

A common misconception: Purchasing a solar system means you’ll no longer be billed by your electric company.

Be wary of salespeople that promise you that you’ll never have to pay another energy bill once you have your system installed. Generally speaking, they’re just peddling a myth. This is because most people with solar power will still remain connected to the grid for some of their electrical needs. Solar panels don’t produce electricity at night and are less effective on overcast days. While electricity can be stored in batteries for use at night or during a blackout, batteries for solar are expensive and cumbersome.

If you make the switch to solar, you’ll still be billed by your utility provider unless you go completely off-grid. However, your electric bill will likely be greatly reduced. In some cases, it may drop to as low as $20, or perhaps even lower. But ultimately, your electricity savings each month will be largely dependent on factors like where you live, your home, the size of the system and your household’s energy consumption.

Billing practices referred to as “net metering” in states such as California provide financial advantages for grid-tied systems. Essentially, this program allows solar customers to receive credit for surplus energy their home generates and then provides to the grid. These credits can then be used toward any charges you incur during those times when your household uses more power than your solar panels produce. Note that net metering laws are subject to change, which could potentially impact the savings you receive from your utility provider.

It's possible that your home is not a good candidate for solar power.

It's important to understand that not all homes and climates are suitable for solar panels. A home needs to capture enough sunlight to produce an adequate amount of electricity to make your investment

worthwhile. Your roof itself is a primary consideration if you’re looking into having rooftop panels installed. Even in a sunny climate, rooftop solar panels might not be efficient if your roof gets too much shading from trees, or if it is oriented in a less-than-ideal direction. North facing roofs are generally a good reason to reconsider having rooftop solar panels installed — you’ll spend more money to get a complex system built that works despite a lack of direct sun exposure, and your solar panels may produce less energy. Also, if your roof needs work, you should address this before having solar installed. Otherwise, you’ll have to spend thousands of dollars to have your panels removed and then reinstalled. For free-standing systems, you’ll need a large enough space on your property to accommodate the solar panel system.

An assumption you shouldn’t make: That the installer won’t switch materials after the project begins.

Ensure that the components the solar company presents to you when pitching their services are actually the products that will be used to build your solar array. Solar Medix, which serves New Jersey and New York, warns that the provider may make changes in products if the contract stipulates that they are entitled to do so. For this reason, it’s essential to scrutinize the section of your contract that specifies the brand of products to be used. In particular, you should hone in on whether the contract has a provision that allows for the solar company to make a change in materials during the installation process.

A frequent mistake: Signing with the first installer without shopping around and getting three separate bids.

It’s critical to do a fair amount of research before you sign on with a solar company. First, you’ll want to ensure that the business is trustworthy and delivers high-quality work. Comparing quotes from different providers will also give you a better sense about what constitutes a fair price for the project. Despite illegal practices like bid rigging that can occur in any industry , it’s generally the case that comparison shopping tends to result in greater transparency among providers and increased competition that can help you avoid overpaying.

Be sure to compare materials and warranties, and check various reviews online. It’s also a good idea to ask the solar company you plan to hire for three references from customers who have had the system for a minimum of one year. You might also ask friends or neighbors for a name they would recommend.  When comparing bids, don’t hesitate to ask questions, such as: how long have you been in business, how many systems have you installed, will you subcontract with another company to install the system?  For guidance in this area, consult Solar Reviews” “Questions to ask a solar company before you sign a contract.” The California Solar Consumer Protection Guide also cautions that the he best option for you is not necessarily the cheapest one, as this could be an indication that workmanship may suffer, or sub-par materials might be used.

Failing to check credentials can be disastrous.

It’s illegal for solar providers and their installers to conduct business in California and in most states without a license. This is in part because work done on a solar energy system without licensing and permits can cause electrical issues, roof leaks, structural problems, and even fires. If your property is in California, you should ask the provider for proof of a license, and verify that that licensing is valid and active at, or you can call 800.321.2752. In addition, the California Solar Consumer Protection Guide points to certification by the North American Board of Certified Energy Practitioners (NABCEP) as a positive indicator of high standards.

Warranties and insurance policies should be reviewed carefully.

Warranty coverage is crucial when you’re dealing with a system that is expected to last about 25 years. Get a full understanding of what is covered and for how long when it comes to the panels and inverter. Also check if there is a warranty that applies to labor for any repairs and maintenance, and who you should contact for this. You’ll also want to know who to contact to replace the components after the warranty period expires, and of course, how much this will cost you.

Also make sure that you get clarity on any insurance policy that might come with the system, and whether you’ll need to purchase additional home owner’s insurance. Especially if you live in a disaster-prone area, you’ll want to know the ramifications if your system breaks down due to something like a fire or earthquake.

Ensure that everything agreed to is stated in writing and don’t succumb to any pressure to rush through the process of reviewing the contract.

Whatever terms and conditions that a solar provider and you agree to, ensure that they are detailed in your contract. Any promises the solar company made with you verbally should be explicitly stated in the documents you sign. As Solar Medix warns, if you point out a discrepancy between what was verbally stated and what the contract spells out, the provider should make the change in the contract. If your request to amend the contract is denied, it’s best to walk away. For that matter, don’t hesitate to refuse to do business with anyone who doesn’t give you all the time you need to read the contract in its entirety. Finally, be aware that you have at least three business days in the state of California to cancel your contract for any reason. For a fuller understanding of your rights as a consumer as well as important considerations before making the switch to solar, you can access the California Solar Consumer Protection Guide here.

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