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Here’s why you should get multiple solar quotes (and check the math)

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We recently got a question from a solar-curious person in South Carolina. We’ll call her ‘Katherine’ (names have been changed to protect the innocent… and the guilty). She had gotten two very different quotes from two solar companies, and each promised their system could eliminate 80% of her bill.

The differences between the quotes she received and the promises made to her are why you should always get multiple quotes for solar from companies in your area. Sometimes big national companies offer slick service and sales tactics, but higher prices, while the local solar company will tell it like it is and give you a better deal.

It pays to know your options.

Here’s how we walked her through the differences, and showed her that one company’s promise wasn’t all it was cracked up to be :

How do you compare solar quotes and judge the better one?

Dear Solar Power Rocks,

I have been interested in Solar Power for more than 20 years but I am just now able to consider investing in it for my home. I am retired and live in South Carolina. My utility company, Santee Cooper is offering a rebate of up to $9,600 on a home solar system, and that will make the system affordable for me.

The first solar quote

I recently was given a quote by a solar company based in Arizona. The salesman is very likable, lives in Charleston, very low pressure and very passionate about solar energy.

The price quoted for a 6.08kW (19 LG Electron panels) roof system was $25,000 (before Santee Cooper rebate). The salesman said that I would save 80% of my $245 monthly bill. The system is manufactured in the US and has a lifetime warranty of 25 years. Since I have been talked out of going solar at several home shows because of my age and the high cost, I thought I would investigate further and get more quotes (SPR note: This was a smart move!).

The second solar quote

I have received one more quote so far which has now totally confused me. A local company that I used to put in solar attic fans said to save 80% of my monthly $245 electric bill I would need a 16.82-kW solar system (58 Hanwha Q peak G4.1 290W panels), which would produce 22,304 kWh per year.

The price quoted was $49,950 (before Santee Cooper rebate). Nearly twice the price of the first quote, for a system three times the size.

Questions about my solar quotes

Both companies are saying I can save 80% of my utility bill, but they can’t both be correct. How do I figure out which is the true quote, and which is the better price?

The first quote is for $1,315 per panel, while the second quote is for $861 per panel. Why such a big difference?

Sincerely,
Katherine

Wondering Woman

The Solar Power Rocks answer: How to judge the best solar quote

In order to figure out how much of your electricity bill you can eliminate with solar, you have to do some reverse engineering. A little quick math can tell you how many kilowatt-hours (kWh) you use in an average month, and some more quick calculations can tell you how much energy the solar panels in the quoted systems will produce.

Decipher your electricity bill

Start with that number for your average bill, $245. Santee Cooper charges around $.12/kWh for electricity, and has a monthly fixed charge of $19.50. Take $19.50 from $245, and you’re left with $225.50. Divide that by $.12, and you get just about 1,880 kWh per month.

So that’s your average usage. Oftentimes your utility will actually provide your trailing 12-months’ worth of usage on your bill, to make it easier.

Now that we know the number, we can see if the quoted systems can eliminate 80% of it.

How much energy the solar panels will make.

Start with the size of the systems: 6.08-kW and 16.82-kW.

Then look at how much electricity can be produced in an average year for each kW of panels. Here’s a map that shows that number:

Average annual kWh per kW of solar for the USA

From that map, you can see that South Carolina is in the “1600” section, with parts of the coast in the “1700” section. We’ll use 1600 to keep our estimates conservative. Multiply that number by the number of kW in the system sizes, and you get 9,728 kWh (6.08 * 1600) and 26,912 kWh (16.82 * 1600).

But that isn’t the end of the calculation. That map represents ideal production, but in the real world, wiring and your solar inverter cause some of the energy to be lost before it can be used or sent to the grid. About 21% of the energy will disappear, so we multiply the above numbers by 79% (.79) to get a better estimate of actual production.

We end up with 7,685 kWh (9,728 * .79) and 21,260 kWh (26,912 * .79). Incidentally, that 21,260 kWh comes in a little lower than the 22,304 the company quoted you, but keep in mind: our estimates are conservative, and we’re not evaluating your roof, or your exact location; justa the general area around you.

How much of your electricity bill you can eliminate with solar

So your $245 bill represents charges for 1,880 kWh monthly, plus a $19.50 fixed charge. Let’s see how the two quotes compare in meeteing those needs.

The first solar quote

The first system, producing 7,685 kWh per year, averages out to 640 kWh per month (7,685/12). You can see right now that’s not anywhere near 80%. Multiplying those 640 kWh by the $.12/kWh price means you’d save an average of $76.80 per month, or 31% ($76.80/$245).

The first company’s quote was way off. Are you sure the salesman understood just how big your electric bill is before telling you his system could eliminate 80% of it?

The second solar quote

The second system, producing 21,260 kWh per year, averages out to 1,772 kWh per month (21,260/12). That’s much close to the 1,880 kWh usage we calculated for your home. Multiplying those 1,772 kWh by the $.12/kWh price means you’d save an average of $212.64 per month, or 87% ($212.64/$245).

That’s much closer to what the company told you. That accuracy in the quote is definitely a point in the local company’s favor. Being honest up front is essential for a salesperson.

But which system is the better deal?

The number one way to judge the cost of a solar quote is by a simple measure: dollars per watt.

All else being equal, including equipment, warranties, and workmanship guarantees; it all comes down to how much you pay for each watt of generating power.

Looking at Katherine’s two quotes, and we see $25,000 for 6.08-kW, or $49,950 for 16.82-kW. A kW is one thousand watts, so the math works like this:

Quote 1: $25,000 / 6,080 = $4.11/watt

Quote 2: $49,950 / 16,820 = $2.97/watt

It makes sense that a larger system would be cheaper, but how much cheaper? And what’s a good baseline?

One way to check is to look at Solar Reviews $/watt page, which is a good guide to how much people have paid for similarly-sized solar systems in the past. Looking there, you can see that $4.11/watt for a 6-kW system is quite high, and $2.97/watt for nearly 17-kW is actually a pretty good deal.

The bottom line: get multiple quotes, and do your reading

Going solar can be exciting, confusing, and terrifying all at once. The best tool you have is knowledge, and the good news is there are many places around the web that are happy to share that knowledge with you, if you know how to ask the right questions.

But there is a knowledge you can only gain by taking the plunge: get quotes for solar on your home today, and compare quotes to each other and to information publicly available on the web.

And hey, if you need a hand, reach out to us! We’ll walk your through it. Once you’ve armed yourself with knowledge, you’ll be ready to negotiate with your solar installer, and get the best deal out there!

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