I agree with all of this. We upgraded our HVAC systems (two) to high efficiency ones. All our exterior walls and windows have been upgraded in the past 5 - 10 years. But we have a lot of stuff that runs on electrons, including two cars. Our solar panels and batteries were expensive, and I don’t expect them to pay for themselves in 10 years. Maybe not in my lifetime. But they are taking some pressure off the grid and I feel good about it. They have also saved us the expense of a back up generator. (we do lose power several times each winter for various lengths of time.)
I have SCE but yeah. I switched to a TOU plan a three months ago so it may be less this coming winter. I have an electric all house heat pump (which also gives me AC for the two weeks a year that it’s nice to have here). I replaced my natural gas furnace with the heat pump which overall saved money.
Ah, @Reply ,it doesn’t sound like you live in CA!
PG&E has the state PUC firmly under its corporate thumb and is now trying to ram legislation through that would invalidate existing NEM agreements because we solar users just aren’t sending them enough money. Don’t get me started–
My house is about 2000 sq ft, just outside Sacto, built in 1988 and well-insulated. I live alone, don’t have a pool or hot tub, and I keep the thermostat at 80 deg in summer. If you have a family and /or want those extra creature comforts, you can really rack up the kwh on the meter if you’re buying power from PG&E
Nah, not an accountant, but I do try to do research. And I owe you for straightening me out on watts/kw/kwh when I was researching generator vs battery backup!
The bottom line IMO for @Loach and anyone else considering solar is to consult with someone like @Reply who understands the complexity of the systems as applied to your individual situation.
I have gotten a couple of quotes. I have the problem of an unfortunately located city tree in front of my neighbor’s house which means more panels.
A very reputable local company claims that it would be a seven year payback for me but it makes two big assumptions. The first is that I would be able to write off 30% of the cost in Year 1 which isn’t true since I am retired and don’t make very much taxable income. (And now that write off is going away). They also assume that the utility rates will go up every year according to a schedule that is based on past data but kind of pulled out of their ass.
Am I missing anything @Reply ?
I am surprised to see how often hot tubs are being mentioned. Maybe I need to get one too 
I am curious whether the installation industry has more or less matured now in terms of trustworthiness? Back in summer 2020 a young lady cold called at my front door asking if I wanted to talk about solar. Since I was bored, I invited her in and she gave me her pitch. It was a brand new company, and she didn’t even have a business card. I went along with it and even arranged to have their team come to take measurements and give an estimate. The team came in an unmarked van and without company work clothes. It all seemed very fly by night and I declined their estimate (prices seemed fair though). As I said, I wasn’t very serious at that time.
Five years later, this company has a fleet of branded trucks (I see them often), many technicians, and has done lots of projects in the area. They are doing well. So it seems they are the real thing. I will eventually get solar, and will include this company in my shortlist.
Flattered, but I’ve also been out of the game for a little bit!
Someone local and reputable would be better. I’d start with a home energy auditor (as in an independent person not associated with a particular solar company… usually they work for or with a local environmental group, possibly the county or state, etc.) to see if solar is the best/foremost option. If it is, then do some basic online estimates and then get a few local quotes (at least 3 or 4) and go from there.
I’m happy to answer whatever I can, but a site visit is always better. Plus they have more local & recent pricing and equipment knowledge than I do.
Maybe get one or two more quotes, if there are enough other companies in your area? They can vary a lot, sometimes by like factors of 2x or 3x difference in price.
If you want something more detailed, then instead of a simplified summary like “7 year payback”, you can break it down into a few closely-related but ultimately separate concerns:
- What is the total, all-in installed price per watt I’m getting from this company? If you live in the continental US, it should be around $3/watt, give or take, before tax breaks. Maybe $3.5/W at the high end, but it shouldn’t be much more than that. This is the number that is under the most direct control of the seller, and the thing that varies the most between them (i.e., when you get a quote, shop based on this metric and not the others). Many will try to obscure or abstract this number based on payback years or other things, but either ask them directly for this number or else do the math yourself. It’s simply:
\frac{\text{total out-the-door price (dollars)}}{\text{system size (watts, not kilowatts or kWh)}} = \text{price per watt (\$/W)}
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Your energy payback and production estimates (how much power your panels will put out, how much of your usage they’ll offset) is necessarily a loose estimate based on many factors, like area climate, local shading, monthly fluctuations in both production and usage, etc. I wouldn’t necessarily put too much weight on this because A) it’s a loose estimate even in the best cases and 2) it shouldn’t vary too much between installers anyway.
If you want a better estimate, see Sunroof and PVWatts (below) to run your own. But the best estimates are usually from a site visit, and are usually done either from your rooftop (with an app and/or handheld measurement devices) or from a drone that circles your house (takes dozens of pictures that a computer and design technical will use to analyze shading). Some lazier installers won’t bother with a site visit until later in the sales process, and that’s not necessarily a dealbreaker… the tech for doing it remotely (based on aerial imagery) is getting better and better all the time.
Ultimately this estimate is a function of both system equipment layout (what kind of system they’re installing, especially whether it has microinverters, where they decide to put your modules) and many other variables, but it shouldn’t vary too much between installers. As in, they should mostly converge on a similar design at any similar system size for any particular house. If one particular installer is way off, it’s most likely a math error on their part, or ask them to explain why their estimate is so different.
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The tree may or may not be a big deal. It depends on A) how much shade it actually casts, and when and B) whether your system has microinverters, power optimizers, or neither. In brief, shading can be decently estimated by app/drone/site visit, and micros or optimizers help limit the impacts of shade. In an older-style solar system with a central string inverter, shading one module (one single solar panel) will cause the whole system production to plummet. That is no longer the case with microinverters or power optimizers — only the directly shaded modules will see production drop, while the rest of the system mostly carries on as usual. I believe they’re mostly standard now, but you can double-check with your installers.
Ultimately, it all just comes down to math. The usual best answer to “there’s a tree that shades some part of my roof” is to just add more a few more modules where there isn’t as much shade. Modules are so cheap and so powerful now (their power production per area has quadrupled over the last few decades, while price per watt has plummeted… both thanks to advanced Chinese manufacturing and heavy CCP subsidies).
Unless your roof space is severely limited, having a bit of shade isn’t a dealbreaker anymore… just add more modules. Even if you have to put the module on a less-than-optimal side of the roof (facing away from the sun), it can still be a net positive, just because they put out soooooo much power for soooo cheap now. (And if you’re wondering why solar costs overall are still somewhat high, it’s because of labor and “balance-of-system” costs for the rest of the equipment, not the modules themselves… detailed explanation here: Solar Installed System Cost Analysis | Solar Market Research & Analysis | NREL)
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Combining all of the above, along with financial projections, is how you end up with an overall “7 years payback”. Hopefully the above complexity illustrates why that number is usually just an educated guess. The utility price increases aren’t bullshit, by the way… it’s a real thing. Barring the sudden mass-market availability of more nuclear power or cold fusion, I’d expect energy prices to increase over time.
(And in case you’re wondering why home solar doesn’t make energy cheaper… it’s complicated, but solar is basically difficult for the grid to handle because it produces way too much power at some parts of the day and way too little at other times of the day AND a sudden inversion between those few extremes over a few minutes around sunset. All of those require specialized and expensive equipment and additional power sources, often fossil fuels, to properly handle.)
The TLDR for pricing is to just compare installers by their installed price per watt, aiming for something around $3/W or lower if possible.
For anyone else wondering about the buying process for a standalone system (as opposed to buying a home with solar already on it), I might suggest something like this:
Why bother with research?
I hate this about the industry: There’s very heavy information asymmetry, meaning the solar vendor usually knows a LOT more about the product/service/pricing than the buyer, which can lead to everything from bad deals to outright scams. It’s like buying computers or cars (all are complex systems with rapidly changing designs and electronics that’s hard to keep up with), but without the benefit of trustworthy brands or resellers, and with rather limited competition. Doing your research beforehand is critical… don’t just go with the first offer or two.
Even within the same ZIP code, different companies — maybe even different sales agents within a company — can offer radically different quotes, preying on those who don’t know any better.
Just a few months ago, I stopped a family member who nearly overpaid by 2.5x for a system… they had casually mentioned it over dinner and was about to sign a contract when I was like, wait, how much are they charging you for that?! That particular company had good local reviews, and a neighbor loved them, but this was an outright ripoff. It wasn’t a lease either, just an overpriced sale.
The national typical cost for home solar should be between $2-$3/watt (not watt-hour or kWh) installed, before any tax breaks. That means a 10 kW system (about 25-30 modules) should cost about $30k, give or take. If it’s a bit over, fine, market conditions and local prices vary. But if it’s much higher than that, you’re probably getting ripped off (special circumstances notwithstanding, like you live in Hawaii). Either negotiate them down based on your research & competitive quotes, or just work with another, more honest company.
Installation companies are largely resellers + a few system designers who do layouts and quotes + marketing + a labor pool for the install crew. They don’t manufacture anything of their own, they just order commodity off-the-shelf parts (which you can also buy and install yourself, if you prefer DIY).
That means they will see price fluctuations between different manufacturers, suppliers, seasons, governments/administrations, etc. and a price floor they have to maintain order to stay afloat (probably $2-$2.5/W installed), but no real upper limit. They can (and will) charge however much they want, especially if they sense that you don’t know much and are easy prey. One naive buyer could pay for 3 or 4 other customers… don’t be that person.
First step: Get an independent online estimate
You can start with some online estimates, like:
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Google’s Project Sunroof, a very easy to use estimator that uses computerized analysis of aerial imagery (photogrammetry) to forecast the solar availability of your exact rooftop. Google doesn’t directly sell solar, but it will (optionally) provide you with local quotes too, if you want.
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The nonprofit & government-affiliated PVWatts will give you a MUCH more detailed estimate, but only of production and not pricing. It’s good for validating a local installer’s estimate of your energy output for the purposes of more realistically estimating how much of your usage you will offset through the year. But it’s harder to use and has a lot of jargon that you’ll have to look up (click the HELP button or maybe watch some YouTube tutorials: https://www.youtube.com/results?search_query=how+to+use+pvwatts). Note that this site will go up and down depending on politics (Trump killed it for a few weeks/months, but thankfully it’s back… for now.) It is run by the National Renewable Energy Lab (NREL), a Department of Energy-funded research facility and our country’s primary source of national solar analysis.
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Home Solar Calculator: Get Panels Needed, Cost and Savings seems to be another decent one. There are many more online. I built a good one many years ago (used to be the top result on Google), but that company got bought and the calc seems completely broken now. Oh well. Project Sunroof is better anyway.
Get a site visit if you can
Armed with that basic information, you will then be better equipped to evaluate competing quotes from local installers.
Some (not all) will offer free site visits. You should take advantage of one or more of these to get a boots-on-the-roof estimate if you can, because they can be better at estimating horizontal shading from small obstacles (like single tall trees or power/telephone poles that don’t always show up in aerials).
You can DIY some of this estimation process, if you want to..
There are a variety of apps (especially on iPhone/iPad, but also a few on Android) that can do a pretty decent rooftop solar estimation. There are also drone-based ones (if you have a decent drone). There are also old-school analog tools (like a Solar Pathfinder) if you prefer pencil & paper.
Not going to dive too deeply into the DIY stuff right now because it’s relatively uncommon, but if anyone is interested, I can write more about that later.
More powerful modules aren’t always better
The modules are commodities and it doesn’t really matter what particular kind an installer uses. They will change every few months or years.
450-500+ W is high end, but not necessarily the best value. 300-400W modules or lower are fine too. You do not need super high efficiency modules unless your roof is really small. Look at the overall price per watt, not the watts per square foot (which is what higher-efficiency modules get you). If you’re not roof-limited, then get less efficient modules over a bigger area of your roof, because that will be more cost efficient.
Ask about your inverter
Ask for the specific kind of your inverter you’re getting. This matters both because they have finite lifespans (20-25 years at best) and because their design will significantly impact how shade-tolerant your system is.
String/central inverters are cheapest, but they have a big drawback: Shading one single module will mean all the rest in that same string (usually 5-10 other modules) will also be severely impacted. On the other hand, these inverters are the easiest to replace at their end of life.
Microinverters are best for optimizing per-module production, and they can isolate the impacts of shading so that the rest of your system isn’t affected.
Power optimizers are balance between the above two, striking a balance between optimizing production, limiting shading impacts, and price. Usually they’re a little cheaper than microinverters and nearly as good.
Microinverters and power optimizers together are known as “module-level electronics” (MLEs). A “module” is industry lingo for a single solar panel. MLEs increase the performance of your system during its lifetime, but will be harder to replace at their end-of-life, because you have to remove the modules to access them and then reinstall them afterward.
Some modules have MLEs built-in to the module itself; I’d be careful about those because they’re specialized and can be harder to repair/replace later. But, another way to think about it is that after 25 years, you can replace the modules and microinverters together. Modules typically last a long, long time compared to inverters, but also, the tech for them is only getting better every year, so it might not be a bad idea to upgrade in a few decades anyway. But realistically, who can plan that far ahead…
It all comes down to price per watt
Installers will often try to mask the actual cost (or value, rather) of a system by using vague abstractions like “payback years”. Don’t fall for that, and ask for (and compare) price per watt, installed. That is the number that ultimately matters.
Thank you so much for the excellent detailed answer. I got quotes from two local companies that have been around for a while who both did site visits and from Tesla who I think used satellite images. Tesla used fewer panels and was cheaper so I asked for clarification because I thought that they missed something and they agreed and required to be in line with the other guys. All of the quotes had back up batteries which of course is needed. Incidentally, we pretty much never have long power outages here and rarely even have short ones.
To be clear, I don’t think assuming utility rates going up is bullshit. I just pointed out that their payback projection makes a specific assumption about how much they will go up which is a projection rather than a fact.
Anyway, my financial planner doesn’t think that it’s a good choice for me as a purely financial decision. I’ll probably revisit in a year just for the hell of it.
I wouldn’t mind adding some kind of battery capacity to my system, but I can’t say I feel like it’s actually worth the money to me. Longest power outage in my 12 years here was 8ish hours, scheduled well in advance as they replaced poles on my street. Otherwise, the trend is just a couple of hours per year. Hard for me to turn over the cash to mitigate that.
I had an 6-ish hour scheduled outage to replace the poll behind my house a few months ago. The power was out for over a day in 1994 after the Northridge quake. It took so long because they were reasonably concentrating on the affected areas first.
As I recall, you are under the older plan where batteries aren’t necessary. Under the current plan, battery storage is the only way to make it viable. They aren’t meant primarily for backup. It’s meant to be used when the rates are more expensive.
Our rates are the same 24/7. So our batteries are just for backup.
My response was specific to the local area where @Pork_Rind and I live.
Ah, yeah. You’re absolutely correct. I forget that as a grandfathered NEM 1.0 customer that I have the best of both worlds.
I came very close to adding the batteries, We lost power for 5 days for Hurricane Irene, 11 days for Sandy and then in 2020 as we were selling the house, we lost power for another 5 days after a windshear. I hate JCP&L, we didn’t live in the middle of nowhere but on Main St. But I stuck it out with my little 4k Generator I bought after Irene.
In my new home, I asked the neighbors and they out less than a day for Sandy and didn’t recall losing power for Irene. Last time they lost power was around 2002 when the North East went black for 3 days.
Yikes.
Our mountain home would lose power for a couple of hours maybe twice a year. We have nice oil lamps, and we would probably be playing chess. That’s fine by lamp light. Kinda like it.
We dumped our landline service, it would go out for a week at a time in the winter. I put a cell phone antenna on the roof with a repeater inside. Works fine.