As with anything in life, doing your homework before any undertaking, ensures you are in a much better position to achieve the outcomes you desire.
This is very much the case with a new rooftop solar installation. There are quite a number of considerations and some forward planning required to ensure you get the right system for your home.
In this article we’re going to look at comparing solar quotes. Getting quotes is a few steps into your solar journey. Before you get to this point, it is assumed (and advised) that you have already gained some understanding about your existing electricity usage and demands.
It is also advised that you have a reasonable grip on solar basics. Armed with a bit of solar language and lingo, you’re far better placed to engage with solar professionals.
It’s probably okay to go into a solar quote completely unaware, however, you are putting more reliance on the hopes that you’ll select a retailer with a strong work ethic.
How do you know that what they’re selling is what you need? How do you know they’re reliable professionals promoting quality solar products?
While the solar industry is regulated, regulation cannot weed out all the cowboys, fly by night operators and shonky sales people. They exist in solar as they do in every industry.
Ultimately, the onus is on you. While the standard catchcry is buyer beware, a more positive alternative is buyer be prepared.
In the following paragraphs we’ll highlight the key things to look for in a solar quote and, for that matter, the companies who are quoting.
We’ll touch on system specs, warranties, loans, and ongoing service. Importantly, we’ll provide some good tips about selecting a retailer.
There is a lot that goes into a solar quote. Don’t panic if it seems overwhelming. Embracing a new technology is always a little daunting. This is where an experienced operator with a genuine customer focus is worth their weight in gold. They will guide you through the process well.
As there is generally a lot to consider about a solar quote, a short article such as this can never give an exhaustive “all there is to know” instruction guide. However, by the end of this read, you should feel well enough armed to engage in first step solar negotiations.
Firstly, we’ll quickly revise the most important thing you need to understand before you pick up the phone. You need to understand your electricity usage and what it may become in 5, 10 and up to 15 years following installation.
Let’s go solar.
Understanding Your Electricity Usage
When it’s time to discuss your electricity usage with a solar professional, you can use this initial chat as a way to gauge their thoroughness. A good operator will really grill you (in the nicest possible way) about the amount of electricity you use now, and expect to use in the future.
This is where your electricity bills are going to be essential. Your bills contain the exact amount of electricity you have been using. It’s very important to save as many bills as you can prior to seeking quotes. It’s also critical that you check the comparison bar chart.
Your bill will show how much electricity you use in kilowatt hours (kWh). It will show this billing period, the period before that, as well as the same period last year.
It’s advisable that you have bills from every season, as bills will often vary significantly season to season.
With this information, you’re on your way. However, it’s vital you discuss any proposed, expected, or potential changes to your home life going forward.
Do you plan on purchasing an electric car? Thinking of installing a huge in-ground pool? Perhaps you don’t have a clothes dryer now, but it’s high on the wish list.
Another big consideration for young couples is the potential for a growing family. It might be two of you now, but in 10 years’ time there may well be 6 of you living in the house. Kids tend to eat electricity.
Essentially, you should buy a solar system that meets your current demands as well as covers your future needs.
There is an exception to the rule, however. There may indeed be only two of you and plans for a tribe of young ones and that Olympic-sized pool won’t be part of the equation for quite some time. In this case, you may not wish to outlay the amount required to cover these future needs now.
A good solar retailer will show you what kind of system is needed to meet your demands now, while suggesting one that is easily expandable. This means a larger electricity demand can be covered in the future.
When you’re discussing future electricity demands, a good retailer will be able to help. For example, let’s say you intend to purchase a clothes dryer, a ducted air conditioning system and an in-ground pool.
A good retailer will be able to provide you with indicative costs of running such items. Having understood your lifestyle through appropriate questioning, they will be able to work with you to forecast your approximate usage. It’s also a good idea to call retailers of these products to get an estimate of electricity costs. This is great to have on hand when comparing results with your solar retailer.
All electrical products have a label, sticker or plate that indicates how much electricity they use. You may find it helpful to get a good understanding of this yourself. Check some of your appliances, you may be surprised to find out which are responsible for your hefty electricity bills.
Laptop computers draw a very small amount. Clothes dryers, water heaters and air conditioners draw a lot of electricity. In fact, heating and cooling are responsible for the lion’s share of your electricity bill.
What’s The Difference In Cost Between Grid Power And Solar Power
This is a difficult question to answer concisely. There are many variables to consider before you can arrive at an accurate figure. Firstly, it will depend on your electricity charges from your current retailer.
Secondly, it will depend on the size of the solar system you install – how much of your usage does your system cover? Thirdly, it will depend on the percentage of solar power you use, and how much you feed back to the grid.
There are other considerations such as maintenance costs on your solar system, and grid electricity price rises.
The approximate price differential is calculated over the estimated life span of your solar system. Usually this is 25 to 30 years. Your retailer will almost certainly show you a cost differential of grid versus solar power.
Yes, that all sounds a little bit chewy. So let’s provide an example in round figures to illustrate.
Grid Power
You purchase electricity from the grid at 30 cents per kilowatt hour. Over a year you use 15,000 kilowatt hours of electricity. Your annual electricity bill is therefore $4,500. Over 25 years, excluding inevitable price hikes and usage increases, you spend $112,000.
Yep. That number’s correct. Over 25 years you spend over $100,000 on electricity. Scary isn’t it.
Solar Power
You purchased a 6.6 kW solar system that covers 80% of your electricity usage. The system cost you $7,000. Over the 25-year life of the system you spend $2,000 on cleaning and maintenance. Total spend on the system is $9,000.
As the solar system covers 80% of your usage, you are now only paying your electricity retailer for 3000 kWh per year at 30 cents per kilowatt. Your cost to the retailer is only $900. Over 25 years, you pay $22,500.
- Without the solar system, you pay $112,000 for electricity over 25 years
- With the solar system you pay only $31,500 for electricity over 25 years. With a quality solar system you have saved $80,000. That’s a lot!
These are round figures only. This example doesn’t include the benefit you may receive for feed in tariffs. This will ensure even greater saving benefits.
In short, retail electricity from the grid can cost between 25 and 35 cents per kWh. With a solar system installed, you can pay as little as 4 to 6 cents per kWh over the 25 year life of your system.
Assessing A Solar Retailer
Undoubtedly one of the biggest factors to watch for is thoroughness. Did the retailer take the time to understand your electricity demands relative to your lifestyle now, and going forward?
An experienced professional recognises that many clients have a limited understanding of solar language and jargon. Their approach should be inclusive. A retailer sprouting jargon and lingo rapid-fire is a bit of a red flag.
Beware of deals that are too good to be true. It can be tough with solar, because many retailers will focus on the potential savings, and these savings can indeed sound too good to be true. That said, in many cases they can be very much legit. As you read earlier, savings over 25 years can often be quite substantial.
In this case, comparison and common sense are required. We need to be on the lookout for big differences in quoted savings figures between respective quotes.
A sensible approach is to choose solar quotations from companies that have a well established track record. Substantial positive review numbers are a great way to assess their track record. You will find larger companies with a greater public profile are a safer bet for those customers feeling unsure about the solar process.
This doesn’t mean you should disregard small players or newer companies. While better for the more confident consumer, many of these smaller operators deliver outstanding products and service for less. They simply don’t have the overheads of larger organisations, and therefore can afford to undercut the bigger players. Take quotes from a variety of organisation types and sizes.
Be aware that ongoing service is an important consideration. The servicing of warranties, and general professional back-up, is far more challenging should the company you choose no longer exist several years post installation.
Warranties are a big selling feature of solar systems. They’re a little tricky, so we’ll address them separately later.
Brand Versus System Specifications
Retailers may be promoting a particular brand. Just be a little bit cautious should they focus heavily on a brand at the exclusion of all others. While brand is a consideration, technical specification far outweighs the brand of a product.
It is true that there are leading brands. It is also true that there can be significant differences in quality between brands. Interestingly, that which accounts for leading brands can vary significantly from country to country. When you are discussing solar brands, make sure you assess which is leading, or otherwise, in an Australian context.
A common theme you might hear would be to steer clear of Chinese brands or Chinese manufactured components. Such advice is completely misguided. While there are ‘cheap’ products to come out of China, there are also quality products.
Again, your focus should be on system specifications as opposed to specific brands. Solar companies will often push a brand based on commercial relationships they have with wholesalers or manufacturers. They push it because selling these brands offer them the best margins. Again, be cautious of a heavy brand focus from retailers.
A good solar professional will often include several options that include equipment for their specifications, not their brands. They will also deliver a comprehensive list of pros and cons on their selection.
Just keep in mind, you should be focused on the quality of the product, and it’s specifications relative to your circumstances. So how do you know? Let’s have a look at the specifications to look out for.
What Are The Key Desirable Specifications For A Solar System?
Warranty
A good warranty is a huge selling point. Expect plenty of warranty focus from your retailer. Again, we’ll look at the details of warranty separately. Keep in mind, a good warranty is an indication of quality.
Output
The fundamental performance criteria of a solar panel is the amount of electricity they produce. Usually you will be given a conversion rate that will be stated as a percentage. Any panel that converts 18% to 23% of the collected sun to electricity is a great conversion. This is highly efficient.
Between 15% and 18% is good and pretty standard. Once you hit below this point, you are getting into the cheaper panel models. As a guide, you should be expecting a quoted output of 24kWh to 28kWh per day from a 6.6 kW system.
Quality / Price
A quality 6.6 kW system including installation will retail from $5,500, to $7,000. A high end high efficiency model of the same size may cost as much as $11,000 or more, depending on inclusions.
While there are always specials, be very cautious of anything lower than the 5 grand price point for 6.6 kW. Quality is vital in a solar system, and you should never compromise on quality. Price is a reasonable indicator, particularly with reputable dealers.
Degradation
Over the life of your system the output of the panels will slowly decrease. You will be looking for panels that have the least degradation over the life of the system. Indeed, the figures stated will be under warranty. These warranties, however, can be a little dubious.
Often retailers will wriggle out of these warranties by blaming other factors for degradation. Insisting on quality is your best protection against premature panel degradation.
High End versus Standard Systems
There are circumstances where high efficiency is genuinely recommended. If you find this is the case with you, just make sure to ask why, and request comparative figures.
For the most part, a good retailer will present an option that is tailored to you and your needs, not just the best money can buy. Just selections and options are explained with reasons and figures.
Heat Resistance
Australia is hot. Certain parts of it are ridiculously hot. The problem is that solar panel efficiency is compromised by heat.
If you live in a hot environment, expect your retailer to recommend panels that have a strong resistance to heat. They’re definitely more expensive.
If you live in Alice Springs, for example, you might expect a high heat resistance recommendation. If you live in Southern Victoria, you’d question the need for such an expense, should it be recommended. Although, you’ll make sure you do ask about the heat resistance in some respects, summer has been fairly hot recently.
Maintenance Costs
Make sure you request an indicative price for maintenance over the life of your system. Some retailers will offer an opt in service contract. In many circumstances, maintenance requirements are pretty light-on for a quality system. Regular servicing may well be overkill and unnecessary.
Scheduled routine maintenance contracts will add an ongoing cost to your system that will impact your savings. If you’re going in belts and braces and wish for regular maintenance, be sure to read the contract carefully. Can you opt out without cost?
Backup Service
Being able to deal with one organisation is far easier than dealing with 3 or more. When there is any problem with your system, can it be addressed through the company from which you purchased?
Here’s an example: you may have purchased a system from a retailer that farms out installation to various contractors. They may indeed have subcontractors.
You could find yourself in a situation where you call the retailer for an issue, and they suggest it is an installation problem. They then point you toward the installer. The installer may in turn suggest that it is a product issue, and point you toward the manufacturer.
This can become a nightmare. Being able to deal directly with the retailer regardless of the issue delivers convenience and peace of mind.
Long Term Savings
Ultimately, it is savings over the long term that will be the deal clincher for most solar customers.
Much of the projection is reasonably speculative. However, good operators will offer a conservative appraisal that is indeed accurate. They will also give you a concise breakdown of how these savings are realistic and achievable.
Look out for lofty unsubstantiated claims delivered with dismissive confidence. Expect and demand a detailed analysis for the system options they are presenting.
It is possible and absolutely recommended that you do your own calculations. The equations are reasonably simple. There are many tools online to be able to calculate potential savings with solar. The good ones talk you through the process offering easy to follow formats.
Look for major discrepancies between your results and the results of the quotes. Should there be significant differences, ensure you question the quote and establish why.
Loan Options
Such are the potential savings on a solar investment, many solar customers will choose to borrow the upfront outlay so they can start the savings now.
It is vital that you include the repayments and interest in your solar savings calculations. A loan will impact your savings. And by how much is a significant variable.
There are many solar companies that offer finance. Usually, this is the most expensive option. For those with equity in their home, drawing against it is usually the cheapest option by far.
A personal loan from your bank might be an option for you, but this will also be a more expensive option.
A loan for a standard system that costs around $6,000, particularly if attached to your home loan, will have a negligible impact on your savings. In fact you may well end up in front if you were to otherwise wait to save the outlay.
The finance options presented by your solar provider are typically a good option but be sure to ask what other alternatives there are to make sure you have chosen the best route. If your chosen provider doesn’t give any financing options, there are a number of banks that offer low interest green loans. Reputable solar companies typically provide something better or comparable however.
Warranties
You’ll find that pretty much all solar retailers make a big deal about warranties. Understanding them can be a little tricky. The main reason for this is that a typical solar system will have 4 different warranties. Understanding each one is important.
1. Panel Performance Warranty
Panel Performance is probably the most hyped, yet the most controversial and useless part of a warranty. They’re improving, but still very much a grey area.
As stated earlier, panels will lose efficiency over time. Most panel manufacturers will state that panels will lose 10% efficiency in the first 10 years and 10 more over the next 15 to 20.
This means that if you have a dramatic loss of efficiency before that, the manufacturer must act to rectify. The problem with this is that frequently manufacturers can cite performance degradation to something covered under the product warranty, which is usually a substantially shorter period.
For example, after 12 years you find you have 20% loss of efficiency. Technically, you’re warranted for rectification. However, the assessor notices a small example of water ingress into several of your panels. They then say efficiency loss is due to a factor covered by the product warranty. The problem is your product warranty has expired.
While performance warranties are improving, it is better to cover your backside with the best available product warranty.
2. Product (Panel) Warranties
Panel warranties vary from 5 to 15+ years (some even more). Generally speaking, you will pay more for the longer warranty but it’s worth it.
The panel product warranty is a pretty standard warranty from the manufacturer, covering you against defects as a result of the manufacturing process. 10 years is strongly recommended. It also suggests that the manufacturer stands by the quality of their product.
You must take care not to confuse the performance warranty (25 years), with the product warranty (10 years). Sales people will often bang on about a 25 year warranty without clarifying that they are talking about the performance warranty.
This is where going with a long established, well-reviewed brand can matter. Such companies are likely to be stayers, and still in business after many years which speaks volumes about warranty claims. Make sure you also check the average turnaround time on claims.
It’s important to understand if your warranty demands that you have serviced your solar system at regular specified intervals. Such a clause can be a bit of a hassle, but doesn’t need to be a deal breaker.
3. Inverter Warranty
The Inverter is the most critical, hardest working, and technical component of your system. Generally speaking, if anything is going to fail, it will be this.
Standard warranties will be 5 years. However, there are many manufacturers that offer a warranty extension of up to 10 years. Of course, there is a cost for this, but it might prove a frugal option in the long run. Check the price and factor it into your long term savings plan.
It’s always a good idea to check if the manufacturer has a full replacement warranty. One failure may lead to more. You want that inverter replaced, not continually repaired.
Again, going with a well established brand will be worthwhile. You should also avoid any product that doesn’t have a repair option within Australia. As with the panels, make sure you check the turnaround time on claims.
4. Installation Warranty
This is pretty critical. Not all installers are created equal. For example, a dodgy operator might secure a panel without an internal anchor. The wind blows, your panel flies down the street smashing into the neighbours new Maserati.
A less than cautious installer installs your inverter in a location subject to weather. When it fails and you make a claim to the manufacturer, they deny the claim as the unit has been installed incorrectly.
Installation warranties are pretty light on, covering one to two years. Look for installers that offer up to 10 years. These professionals generally cross all the T’s and dot all the I’s. Of course, expect to pay more. But a 10 year warranty provides great consistency across all the warranties for your system.
It’s critical that you ask about the warranties on the materials they use. For example, isolation switches for string systems are notorious for failing. Make sure you understand every aspect of the installation that is covered and for how long.
It can be helpful to get a ballpark on turnaround times. When a problem arises, ask how long you might expect to wait for a service callout.
Warranties are a hive of fine print. Read it all and compare them. If you don’t understand something make sure you seek clarification. It’s handy to ask your retailer about their installers. Are they in-house? Contracted? Subcontracted? These things make a difference to a claim response, and should be understood before signing up.
Conclusion
Understand performance criteria. Understand warranties. Understand your electricity needs. Most of all, identify the level of customer focus delivered by those who quote you. Research your retailer. Assess their history and read the reviews.
Importantly, collect all the information you can about potential savings. Do your own calculations so you have figures with which you can compare the projections of the professionals.
As we said earlier, the onus is on you to ensure you get a product that suits your needs. Nothing will beat a high level of preparedness.
The potential savings of a solar system can exceed $100,000 over its lifespan in many cases, so making sure you choose the right supplier is an important decision.
Well researched, switched-on solar shoppers typically save a small fortune on electricity over the long term. When you understand how to compare your quotes, you’re a significant step closer to realising the solar savings you’ve heard so many people rave about.
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