Top 5 Things to look for in a solar contract
There are a ton of solar companies. 100s just in Southern California. With all these companies you will get most of the same equipment but the contract is what separates the greats from the losers. This article is to dive into the main items to look for in the contract. The best tip I can give is always read the contract before signing. You want to make sure that what they are saying is actually in the contract.
These 5 tips are from years of experience and being involved with multiple companies. I have seen great contracts and not so great contracts. I won't sell for a company that has a bad contract. I wouldn't feel right selling to a home owner something I don't believe in. I am huge on honesty and transparency so if I wouldn't sign something I wouldn't expect the home owners I sit with do sign it either. So let's get into it.
1. Roof, Home and System Warranty
Your home is an asset. You want to protect it the same as any other asset that you acquire. The best way to protect that is by warranties offered by the solar company. If they want to put their panels on your roof, you need some guarantees that protect you.
First, is your roof. Solar panels require mounts which means holes will be drilled into your roof. You need to make sure that the solar company or construction company installing the panels gives you at least a 5 year roof warranty. That will protect you from any leaks or damage to the roof due to their installing of the panels.
Second, is your home. This kind of goes with your roof warranty which will give your home protection from a leak in the roof. So say that you do get a leak in the roof and the water creates a hole in your ceiling. And from that hole the water leaks all over your TV and ruins it. Is that company going to replace that TV and repair your ceiling or are they just going to patch the whole in your roof?
Third, is the system warranty. Most manufactures of solar panels will give you a 25 year manufacture warranty. Some inverter companies will only give you 10 years. Also, check to see if you are getting a solar company warranty or a manufacturer warranty. Big difference between the two.
2.Production Guarantee
This gives you protection that the system will produce what the company is saying that it will produce. You don't want to pay for a 5kw system if it is only producing 3kw. That's a waste of money and your time. The production guarantee says that they will guarantee a certain percentage of the production that they estimated. That could be 80%-100%. Big difference between those numbers.
What this basically means is if you are told you will produce 12,00kWh then the company will guarantee a certain amount of that. So if you only produce 8,000kWh, then the company will either write you a check or give you credit to your account. So find out how much of a guarantee that they are giving you.
3. Moving Options
What happens if you move before your lease is up? That is a good question and it will depend on the solar company. Most of them are simple, you just transfer your solar lease to the next home owner. That's the most popular option. Other options are the new home owners buy the system for what it's worth and then don't have any payments to any solar financing company. Some companies will let you take the system with you to the next house, but I wouldn't do that. Newer panels will be out, the system size you have might change depending on how big or small your next house is, etc.
If you paid cash for the system, studies show that depending on how soon you move after you installed it, you should get 90%+ of your investment back. Unlike kitchen remodels, you only get roughly 60% of your investment back. So thats huge! That way you can pay cash for the system, sell your house for more than anyone on your street, all while getting your investment back. Win Win.
4. Understanding and knowing what you're paying for
Make sure you know what you are buying. That means all of the above as well as system size and production. If you know that you use 12,000kWh a year and they are selling you a system that will only produce 9,000kWh, you won't be producing enough to cover what you use. If they tell you that you won't have a utility bill, kick them out. You will owe that utility for that 3,000kWh that you used over your production. So make sure the numbers add up.
Is the value that they are selling you at make sense. If they cost more but offer less that what other companies offer, if that a smart purchase? Most likely not. So make sure you're getting the most bang for your buck. Also, is it a lease, loan or PPA. Those those payments will vary. A lease you will have on flat payment every month for the term. PPA will vary because you are paying for what you produce. So you will have high months in the summer and low in the winter. So make sure you know what you're paying for and how.
5. If it's not in the contract, it's not part of the deal
If the consultant says one thing but can't prove it in the contract, don't sign it. Verbal agreements don't hold up in court. If they tell you all about their warranties and guarantees but can't show you where it says that, don't sign it.
My main goal is here to prevent you from signing and contract that will not serve you in the long run. Don't get tied down to a bad deal that you can't get out of. Hope your searching goes well and you find the best deal for your home.
Thanks for taking the time to read this. If you found this helpful, please share with people you care about. If you're not looking into solar, pass it onto someone who is. If you have any questions, please contact me. You can also schedule a consultation with me and I will design your system and see if we can make it work for your home.