The reason you want to get a few estimates is because you don’t want to be overcharged, sure, but you also want to interview and research a few different companies. There are several factors to consider, but price is the big one for most, so let’s talk about it.
A solar electric, grid-tied, no battery system will pay for itself over time. If you agree to a high purchase price, finance it with a high interest rate and fees, and high payments … what you save on ever increasing electric rates will eventually dwarf what you paid for solar. No matter what you pay for solar, renting electricity from your power company, forever, will still cost more. That being said, the better deal you get, the sooner it pays for itself, the better off you will be financially.
Pricing varies from around $2.75/Watt and all the way up to $6-$7/Watt. That probably didn’t help you much. Some of you have no idea how many Watts of solar you need. Some of you have no idea what a Watt is. To answer one, we need some information from you (call us), the other is easily Googleable and we won’t explain in this post.
There are variables that affect price. For example, two (or more) story roofs cost more than single story. Metal and tile roofs cost more than shingle. This is how the industry prices it, by Watt. Should we be offered the privilege of designing a system for you, we will use much more layman-friendly math.
So, a 6 kW system, or 6000 W system, will run $16,500 (6000 X $2.75) on the low end and $42,000 (6000 X $7) on the high end. 6 kW is considered a pretty small system in Florida, and we are just using it as an example in this post. We wrote the book on how to buy solar, literally, and here is an excerpt so you understand the equipment required in a complete solar system.
Components of a Solar Electric System
These are the parts and equipment required in order to produce electricity using the Sun’s energy. Without getting overly technical we will try to explain each component, so you know what it does. Some of this will be important to know later so you understand how it all fits together, the regulatory bodies, and the hoops that need to be jumped through. Like financing, we handle most of this for you, but there will be some instances where you, as the customer, will have to be involved. (Beware any solar design that does not include all of these components.)
The Sun
Arguably the most important component and seemingly elementary but there are aspects of the Sun that bear mentioning for those who have not thought it out. The Sun does not always shine. We don’t say this to depress anyone, but there are cloudy days, and some where it outright storms, and your system will not produce, or produce significantly less. Here in Florida, the nice days typically outnumber the bad ones, but your electricity production will be affected.
Your system should be designed to meet your needs on a yearly basis. Some days may produce less than others, but over the whole year it will even out. This is why it is important to have your system sized by a professional who insists on looking at the previous twelve months of energy usage. If you are new in your home and do not have a full twelve months of energy usage, there are programs that will estimate based on what data is available, but a margin of error will have to be accepted.
Also, shade. Please don’t let anyone design a system for you that places your panels in the shade or facing north. They do not function well in the shade or on north facing roof planes. This seems rudimentary to some of you, you may think we are being ludicrous for mentioning it, yet we have seen this many times, after the fact, when it was too late to do anything about it. Sun, it’s important.
Solar Panels
Solar panels are minerals under glass. When the light from the sun reaches these minerals, they activate and create electricity. Panels come in many different sizes and power ratings. The amount of electricity a panel produces is measured in Watts. Every year the technology seems to improve and today, a panel the same size as a panel that used to produce 250 watts, can produce 400 or more. The size and rating become important when determining how much of your south, east, and west facing unshaded roof will need to be covered in panels to produce the needed amount of electricity.
A competent solar system designer will measure your roof and determine how many panels will fit on the available unshaded roof planes. They will try to hit the goal considering many factors. They may be able to get a higher amount of output by using a higher number of smaller, easier to fit, panels. They may need to use the most powerful panels available and every bit of roof space. Ideally, their design will be aesthetically pleasing, produce the correct amount of power, and leave some roof space for expansion should it become necessary in the future. Like most things, quality will vary, and higher quality comes with a higher expense.
Most of the established solar contractors, us included, only work with top-tier manufacturers that stand behind their products. Not doing that is an expensive lesson that newer or smaller solar contractors will soon learn if their business survives. There is very little difference in quality and manufacturer warranty between top-tier manufacturers. Their prices fluctuate and that is usually the dominant deciding factor on which brand to choose. After price, the issue is availability, and this can occasionally trump price. Supply chain issues are a thing, and some manufacturers are sometimes six months to a year out on delivery.
Inverters
Inverters convert Direct Current (DC), which is what is produced by solar panels, to Alternating Current (AC), which is what your power company provides, and all your lights and appliances need. The difference is irrelevant to laymen and gets technical very quickly. If you want a deeper dive on the subject than is provided here, you can search the internet and scroll passed all the results regarding the legendary British rock band. On inverters for solar there are three options.
String Inverters – These are strung (hence the name) panel to panel and then to an inverter where the Direct Current (DC) produced by the panels is converted to Alternating Current (AC) which can then be used in the home. This is the least expensive way to make this conversion with solar electric panels.
The downside to string inverters is that if something happens to one panel, it affects the production of the entire string. Also, if one panel has a problem, there is no way to identify which panel is faulty except by checking each panel individually. Experience has taught us that the money saved initially can be easily spent on more labor-intensive service calls later.
Microinverters – These are a little pricier, but as you are redirecting the money you are already spending on electricity to pay for this, we think it is worth it to splurge. The conversion from DC to AC happens in an inverter on the bottom of each panel. If one panel stops producing, the rest of the system produces normally. It is also easy to identify which panel needs repair or replacement. The entire system is monitored by the customer, the solar contractor, and the manufacturer.
Power Optimizers – This method tries to combine both technologies above at a price tag somewhere between the two. These power optimizers “condition” the DC energy through a device under each panel then send it to combiner box like a string inverter uses to do the actual inversion to AC. This allows for the rest of the system to continue functioning if a panel(s) has an issue, and also makes it easier to locate the problem.
Pro-Tip: In the conversion process from DC to AC there is some power loss no matter how you do it. A panel array that produces 11.7 kW DC will drop, or derate, to about 10 kW AC after line loss and going through the inverter(s). This becomes significant in the next Pro-Tip when Tier 2 insurance is discussed. Tier 2 insurance is required for the AC output, not what the array produces before the power produced is inverted.
Your Electrical Panel
If you have newer construction, you probably already have a 200 Amp panel. The amperage your panel is rated for becomes an issue depending on how much your solar system produces. If you have an older home, you may have a 100 Amp, or 150 Amp main panel. If so, adding the amperage a solar system produces may exceed your main panel’s capabilities. If your main panel will present a problem, this will be determined by the technician during the pre-site. Upgrading your panel will be an additional investment requiring an additional permit and a licensed electrical contractor.
The Electric Meter
After your system passes final inspection by your local building department, your power company needs to be notified and brought into the arrangement. This process is called interconnection, and an Interconnection Agreement will be filled out by your contractor with the information your power company requires, you will need to sign it, then it is sent to your power company. Once your power company has reviewed this information and inspected the completed solar installation, they will come install a Bidirectional Meter.
This is how your power company is going to track how much electricity your solar system is producing. When you are consuming energy your meter will turn the normal direction, when your solar system is producing, the meter will spin in the opposite direction and count credits.
Pro-Tip: Systems that produce over 10kW AC require an additional umbrella insurance policy called Tier 2 insurance. This is a Personal Liability Policy (PLP) that provides at least one million dollars in coverage and protects your power company from any liability should there be an injury or death caused by your solar system above and beyond what your homeowner’s insurance covers. This is a highly contested rule and even those insisting on it have trouble verbalizing an eventuality where a properly installed solar system hurt or injured anyone. Nonetheless, it is currently a rule. The good news is that $1 Million in PLP to satisfy your utility company only runs around $14/month. Obviously, this can fluctuate from provider to provider and is only accurate at the time of this writing.
Rapid Shut Down
This is a switch that immediately deenergizes your entire system. We hope you never need to use it. It is in place, mainly, in case your home ever catches fire and firefighters, or other first responders, need to get on your roof. Water, electricity, you get it. First responders know to look for this switch before they put their lives at further risk than merely getting on the roof of a burning building.
Batteries
We know we said earlier that we were going to be talking mainly about grid-tied systems, and we feel we have, but since we are discussing components, the owner of our company pointed out that batteries could be part of even a grid-tied system. Let’s explain what he is talking about. Some people, in addition to not having an electric bill, would like the additional benefit of having electricity even when the grid goes down. This can be accomplished with a battery and a sub-panel. Due to the volatile nature of energy in general in the world today, this might not be a bad idea.
Batteries store energy for use when the grid is down and so is the sun. The technology has advanced significantly over the last few years. Only recently have we been able to realistically recommend them as, finally, the capability of batteries has increased, and the prices decreased to a point where it makes sense. Keep in mind that while a solar electric system may pay for itself and then offer a return and is therefore an investment, adding batteries to a system will be an added expense that buys you a very desirable, sometimes life-saving, benefit.
Okay, excerpt over (for now), but that was the equipment. Please understand that quality on every component varies. Some have better features than others. Some manufacturers have better reputations and warranties. As quality and reputation varies, so does price.
Next, I want to talk about the labor portion. Labor does not just mean the techs on the roof. It also means the efforts of the marketing and sales team, office staff who handle all the paperwork, permitting experts who deal with the municipalities and power companies, engineers who design systems to code, field managers who coordinate the teams, and more.
This next part is another excerpt that goes over the process and describes some of the professionals required to accomplish each step.
The Solution
Okay, so we told you all that, so we could tell you this. In a perfect world, this is how it should go from beginning to end.
1. You decide you would like to go solar.
However you got there, great, we are glad you are here. Preferably a salesman talked you into it by presenting the benefits to you in a legal, moral, and ethical manner. Maybe one filled your head full of pretty misinformation. Maybe you saw a commercial and have decided this is the only way to save the planet. Good or bad information, you are at a point where you want to go solar and that’s good. If you got here in one of the many wrong ways, step 2 should sort you out.
2. Manage your expectations or have a reputable expert manage them for you.
You will not retire by putting so many panels on your roof that you earn passive millions by selling power back to your power company. Solar may reduce carbon emissions, but what kind of moral, ecological, and environmental damage was caused in manufacturing the components? Without batteries, you will not have power during a power outage. Shaded panels do not produce as much as those in the sunlight. The government will not pay you to go solar. The list of misrepresentations about solar electric goes on and it’s depressing, so we’ll stop here.
Salespeople are supposed to be experts in the industry they represent. Our salespeople are instructed to be educators first. A properly educated prospect will want to buy. Lying to a prospect to get them to buy is a recipe for a grumpy customer, bad reviews, and unemployment. Solar is good enough without the lies. Financial math makes solar make sense, or not make sense.
You make the initial contact to your solar contractor, not the other way around. Contact them after you have researched them extensively. Check their reviews, check their BBB rating, check their articles of incorporation, verify their license and insurance. How long have they been in business? Search the names of the owners of the company. What have they been in the news for? Do this for three different companies, at least, pick the best ones and call them.
3. Verify your research.
When you call them, do they ask you for a full twelve months of electric consumption? Do they insist on coming out to your property before giving you a final quote? Do they look at the rest of your home to make sure it is as efficient as possible before sizing your solar electric system? Are they using a lot of “save the world” propaganda buzzwords to manipulate you? Are they promoting a one size fits all or a good, better, best? Are they placing panels in the shade or north facing roof sections? Are they promising you a check from the government for going green? If you read along this far, by now, all of these dropped balls should be red flags.
4. Make a buying decision based on all the pertinent information.
If it saves you more than it costs you, it makes sense to buy. Try not to let other factors muddy your thinking. The most important consideration is do you go solar immediately, or do you tighten up your home’s efficiency first then revisit sizing your home for solar electric in six to twelve months, after your efficiency upgrades have lowered your consumption.
5. You’ve picked a winner, now trust them through the process.
Part of what you are paying for, in addition to material and labor, is the expertise to handle all the complicated stuff for you. There will be the previously described frustrations, delays, and frustrating delays. Your contractor is as frustrated as you are, maybe more. We did say perfect world though, right? Here’s the perfect world scenario:
1. You sign all the paperwork.
2. Financing is arranged and agreed to. (Check, Cash, CC, PACE, Traditional Lender.)
3. Interconnection paperwork is started.
4. If Tier 2 insurance is needed, now is the time to start shopping.
5. Super-smart solar technician pre-sites and verifies that initial design is viable.
6. Super-smart solar technician makes any changes needed (if any).
If needed changes are significant and affect price, then your sales representative needs to amend your contract and return to explain the changes and get the amended contract signed.
If, or when, no changes are needed, super-smart solar technician submits his drawings to engineering.
7. If your main panel requires an upgrade a licensed electrician needs to be hired.
Electricians will have to pull a permit too, so prepare for possible delays.
Delays are typically in the building department. Some are just faster than others.
You can hire your own electrician or your contractor can arrange one.
The electrician and panel will be an additional expense to your solar electric contract.
8. Engineer drawings are requested.
9. Engineer drawings are completed.
10. Permits are requested.
11. Permits are granted.
12. Install Day! (Typically takes a day, bigger systems can take multiple days.)
13. Building Department Inspects and signs off that install was done properly.
Pro-Tip: Building Departments … pfffft! Amirite? Most of them are great, but when they are not great, they have the power to be awful. We work hard to cater to them and keep them on our side, but probably every contractor has caught an inspector on a bad day and that inspector has wrought havoc on a project. Each municipality seems to have its own rules. We have passed a thousand times doing it one way then failed an inspection because this particular inspector liked it done a different way. We once failed an inspection because a ladder was not placed for an inspector. The pro-tip here is to not let a failed inspection stress you out. It’s usually something minor and easily remedied.
14. Permit is closed out.
15. Finance company releases funds or remainder of cash payment is made to contractor.
16. Permission To Operate (PTO) is requested from your power company.
17. Interconnect is connected.
18. System goes live.
19. You, the manufacturer, and contractor arrange for system monitoring.
20. From the day you signed the paperwork, four to six weeks have passed. (In a perfect world.)
Pro-Tip: As your job progresses through these steps, the tasks will be handed off from expert to expert within the company you chose. At least one person in that company should be assigned to keeping you up to date on the progress. Please don’t lose faith in your contractor due to delays. For our part, the majority of delays we deal with are related to third parties or weather.
Excerpt completed. After all that, hopefully you have come to the conclusion this post is trying to guide you to. There are about six pieces of equipment, about twenty to thirty steps, and ten experts involved in a basic grid-tied solar installation. We’ve been doing this since 1999 and our competitors, some big, some small, are dropping like flies all around us. We charge in the $3/Watt and $3.25/Watt range for a solar installation. There are companies who sell solar for less, we can too, just tell us which component, part of the process, or expert you want us to scrimp on, shortcut, or leave out.
We are a “for profit” company and we know what it takes to do this. Not just to barely squeak out an income and beat every competitor’s prices, but to fairly compensate our experts, keep the lights on, and stay in business for years after the install to service our customers. We are the kind of company we would want to do business with. We cost a smidge more than some, and we are worth it.
As solar sales organizations, finance companies, and contractors around us are going out of business, being put out of business, or are in the process of litigation … we see that as a market correction. We, and other reputable solar businesses in the area, are here for the customers they orphan. If you read our previous posts, you will see many that warned about what is going on in the industry today.
We hope this at least marginally answers the question “How much does solar cost?” and drives home the folly of shopping solar strictly on price. If you’d like a quote, we charge nothing for quotes, we will need your name, address, phone, email address, and the last twelve months of kWh consumption. Give us a call and we can walk you through it.
