So, you’ve decided to make the switch over to solar energy.
We applaud you!
Not only are you doing something that’s good for you and your finances, you’re also doing something to help make the world a more sustainable place.
However, the process of converting to solar energy can be a bit intimidating.
That’s why we put together this comprehensive guide.
At the end of the Complete Solar Power Buyer’s Guide, you’ll have a better understanding of solar power so that you can go out and get your energy system converted.
Types of panels
Once you’ve decided to convert to solar power, your next step will be to decide which type is best for you.
So, which one should you go with?
We’ll go through the three most popular types to give you a better idea of which one is right for you.
Originally built in the 1950’s, monocrystalline solar panels are the panels that started it all. The way that monocrystalline solar panels are built is that each cell is cut from silicon into a cylindrical fashion.
The resulting cells look like wafers.
Several wafer-like cells come together to form a monocrystalline solar panel.
- Usually, companies build monocrystalline with high-quality silicon that allows these panels to have the highest efficiency rate among solar panels (up at a 21% efficiency rate).
- In addition to energy efficiency, monocrystalline are also space-efficient. Compared to the other types of panels, monocrystalline take up the least amount of space.
- They also tend to perform better in low-light conditions.
- Unfortunately, high-quality and high-performance tend to lead to higher costs. Thus, monocrystalline solar panels are the most expensive option on the market.
- Users often run into problems when their panels are covered in dirt, shade, or snow. When covered, you may find that entire circuits break down.
- These panels don’t perform the same in all weather conditions. Monocrystalline solar panels tend to perform better in warmer weather.
Originally introduced in 1981, polycrystalline solar panels differ from monocrystalline panels in several ways.
Although both polycrystalline and monocrystalline solar panels are created from silicon, their shapes differ.
Whereas monocrystalline panels are in the shape of wafers, manufactures pour the silicon into a square mold to create polycrystalline panels.
- The process that manufacturers use to create polycrystalline solar panels is simpler, which means that the associated costs are lower as well. With less waste created, the process is more efficient.
- While polycrystalline solar panels tend to perform slightly than monocrystalline panels in higher temperatures, this difference in performance is relatively insignificant for the average homeowner.
- With a lower level of silicon purity, polycrystalline solar panels tend to be less efficient than their monocrystalline counterparts. You can expect between 13%-16% efficiency rates with polycrystalline panels as opposed to up to 21% for monocrystalline.
- Polycrystalline solar panels are less space-efficient. To produce the same amount of energy as a monocrystalline system, you’ll need to cover more surface area.
- Not as aesthetically pleasing as monocrystalline or thin film systems.
#3 Thin Film
To form a thin-film solar panel strip, manufacturers lay one or several layers of photovoltaic material onto substrate.
Also known as thin-film photovoltaic cells (TFPV), these solar systems have reached an efficiency rate of around 7%-13%. However, experts expect its efficiency rate to increase in the coming years.
- Since production for thin film solar systems is simpler than other, thin film solar systems are easy and relatively cheap to mass produce.
- With their homogenous design, thin film solar systems are a bit more attractive than other options.
- The panels are lightweight.
- Issues like shade, obstructions, and low-light conditions don’t alter their performance very much.
- Can be made flexible.
- They’re generally less efficient than both monocrystalline and polycrystalline solutions.
- Although they’re reasonably priced, they tend to take up significant amounts of space. This may be ok for some commercial situations, but it makes it tougher to install them in residential areas.
- Need to purchase a lot of additional equipment.
- Thin film systems often last for less time than other options. Thus, manufacturers tend not to offer very long warranties.
Buying Vs. Leasing Solar Panels
Once you’ve determined the right type of solar panel for your situation, you’ll then be faced with the decision of whether to buy or lease your solar panels.
Both options have their ups and downs.
The primary difference is that when you purchase a solar power system yourself, you own that system forever. When you lease, a third-party retains ownership of the solar panel system and you simply make payments.
The decision that you make has several implications on cost, maintenance, terms, financial offsets, and savings/returns on your solar panel investment.
Let’s take a closer look at which may be right for you.
When Purchasing a System is Right for You
Deciding to purchase your system outright or finance it with a solar loan is the right choice for you if:
- You want to take full advantage of the financial benefits of having a solar system installed. Although some people are focused more on the environmental benefits, there are also several financial benefits that can be achieved through purchasing your system.
- You are someone who is eligible to take advantage of the various tax benefits (both state and federal).
- You are purchasing your solar power system for use in your business and can take advantage of the tax credits by claiming the solar system as a depreciable asset.
- You are interested in increasing the market value of your home.
However, you may not fall into any of these categories.
In that case, leasing may be for you.
When Leasing a System is Right for You
Purchasing and owning a solar power system isn’t necessarily right for everyone.
Sometimes, it’s better to lease the system rather than make the long-term financial commitment of buying it.
You may want to consider leasing your system if:
- Your primary goal is to maximize the environmental benefits of converting to solar power rather than the financial benefits.
- You are not interested in the responsibility of maintaining and repairing your solar system yourself.
- You are not eligible to receive any state or federal tax credits for investing in a solar panel system.
- You are not interested in waiting another year to install your solar system to receive your tax credits.
DIY vs Professional Solar Panel Installation
With the rise of the internet, there are now endless amounts of resources that show you how to do everything from installing a deck to replace the engine in your car.
That goes for solar panel installation as well.
There are plenty of people out there who have set out and installed their solar panels themselves with nothing more than some guides and videos.
However, that route isn’t for everyone.
Let’s take a look at the pros and cons of each.
DIY Solar Power
Pros of DIY Installation
While solar power installation can be complicated, there are some significant benefits. Here are a couple:
- Lower Costs: Hiring a professional solar power company to install your system can be quite expensive. However, solar kits can be less expensive if you’re technically inclined. When you install the system yourself, you don’t have to pay any installation fees. This could cut your costs by as much as a third.
- Ease of Access: Over the years, solar power has become more and more popular. As such, it’s much more available today than it once was. You now have several options to purchase your own system, both online and at in-person wholesalers. When you work with a professional installer, you may have to wait several weeks for them to come out. However, you can get started as soon as you purchase the supplies if you do it on your own.
Cons of DIY Installation
Although there are some big benefits to installing your solar system yourself, it isn’t all positive.
If you haven’t ever worked on a project like this before, you may run into some problems. Here are a couple of cons to DIY installation:
- It’s a Complex Process: While a DIY installation may sound like a fun project, there’s a reason why professionals exist. The process can be quite complex for someone who has never done this type of work before. Despite there being several guides available online, you will likely run into problems. If you’re unable to work around those problems, you may get stuck and have to call a professional anyway. Even worse, you may have to purchase a new system if you make a serious mistake.
- Limited Use: A lot of the times, solar power systems are designed to be used off of the traditional power grid. Most energy companies won’t allow someone to connect to their grid without proper permits and permissions. For the average homeowner, not having access to the traditional grid may cause problems.
A good way to look at DIY installation is that it’s great for those looking to solar power something on their property other than their home. You could set up your own solar power system for your garage, shed, or RV. These projects are already off of the grid and a little bit easier to manage for someone new to solar power.
For other projects, you may want to consider a professional.
Professional Solar Power
Pros of Professional Installation
If you decide that you aren’t interested in installing your system on your own, you may decide to go with a professional.
Here are some of the pros to hiring a professional:
- Stress-Free: Many of the top solar panel installation companies have been doing this for several years. When you hire a company who has been doing this for several years, you can trust in them that they’ll do good work and take care of all of the small details like permits and licensure. Furthermore, they can help you determine what system is best for your property.
- Better Materials and a Warranty: When you’re doing a DIY installation, you’re like trying to save money. Saving money might carry over into the types of materials that you buy. If you work with a professional installation company, you can be sure that they’re using high-quality materials that they get from distributors who might not even work with individuals. Also, you’ll have a warranty on your system in case anything goes wrong.
However, it isn’t all perfect. There are drawbacks to hiring a professional as well.
Cons to Professional Installation
Despite increased reliability, materials, and a warranty, there are some cons to hiring a professional solar panel installation company as well.
Here are some of them:
- More Paperwork and Regulations: If you hire a professional installation company, you’ll be required to fill out a lot of paperwork before they’re able to get started. You’ll need to provide information for permits, applications, and licensure. Although the company will help you with all of this, it can push back start times. Also, it may be pushed back even further if anything in your application process is denied.
- Higher Upfront Costs: When you hire a professional company, you’re going to pay more than you would if you did the project on your own. Your company will likely request that you pay a deposit before they will even start the project. For many people, they don’t have the cash on hand to cover the costs and may have to take out a loan.
Although paying for a professional installer may cost you a little bit more money, it’s usually a better option for most homeowners. With a quality installation, quality materials, and a warranty, it’s likely that you’ll save more money in the long run than you would if you performed the installation yourself.
Installation of Solar Power Systems
If you do decide that you’re going to go with a professional contractor for your solar installation, it’s important that you find someone who knows what they’re doing and will provide good value for your money.
While that may seem obvious, it can be more difficult to find a reliable contractor than you might think.
That’s why you should have a few things in mind when you set out to find your contractor.
Although you may come up with a few more on your own, we’ve found the following tips to be useful when searching for a quality solar contractor.
#1 Look for Expertise
There are a sea of fly-by-night installers out there who will tell you whatever you want to hear in order to take your money.
However, there are also plenty of hard-working, honest contractors who will do excellent work.
You need to find those.
To tell the difference between the two, look for accreditation. For solar panel installers, the gold standard for accreditation is the North American Board of Certified Energy Practitioner’s (NABCEP’s) Solar PV Installation Professional Certification.
Whatever company that you’re talking to, ask them if there will be a certified practitioner on the crew that is coming out to your home. Ideally, there should be a certified member of every single crew that they send out on a project.
#2 Check for Licenses and Insurance
First, check with your state government to see what licenses and insurance a solar panel installation should have. Usually, a solar installation company should have licenses for general contracting, electrician, home improvement, or home performance licenses.
For insurance, the minimum that they should have is general liability insurance.
As the requirements vary from state to state it’s important that you get the information for your specific state.
Once you’re armed with that information, you can then ensure that the company that you choose has everything that they need.
#3 Check Their Track Record Online
These days, reviews are easy to find.
While bad reviews are often indicative of one difficult client here and there, you should look for patterns. For example, several complaints on the Better Business Bureau website tells you that the company has a track record of being dishonest with their clients.
Look for companies that have several reviews, and make sure to actually read them. Ensure that they aren’t fake reviews.
#4 Ask About Their Workmanship Warranty
A reliable contractor will always guarantee the quality of their work with a workmanship warranty. Usually, these warranties are good for anywhere between one and ten years.
Although you can often purchase a separate for the operation and maintenance of your system, it’s usually better to just work with a qualified installer who guarantees their work with a workmanship warranty.
#5 Ask About Their Subcontractors
With contractors, it can be difficult to determine who is actually doing the work. That’s because contractors often hire subcontractors to work on specific tasks within a job. Thus, who you hire may not actually be the one who is doing the work.
However, a reliable company will be transparent with you about when and why they use subcontractors.
Sometimes, a contractor will work with a subcontractor when that subcontractor brings specific expertise to the table that helps add value to the project. Other times, the contractor will bring in a subcontract to complete the entire project.
It’s up to you to know what they plan to do and why they’re doing it.
#6 Trust Your Instinct
When you decide to convert to solar energy, it isn’t just a one-time project.
You’re going to be working with the company that installs your solar panel system for a while. Thus, you should go with a company that you trust, like, and would want to work with in the long-term.
Usually, listening to your first instinct about a company is enough to guide you in the right direction.
#7 Get Multiple Quotes
Just like any other major purchase, choosing the right solar installation requires a lot of time and research to find the best deal. In fact, the United States Depart of Energy’s National Renewable Energy Laboratory (NREL) suggests that buyers should research and compare as many solar installation companies as possible to avoid paying the inflated prices that so many big installation companies charge.
To save yourself some money, you should research all installation companies, both big and small. Those who go out and get at least three quotes on their installation can expect to save anywhere from $5,000 to $10,000.
#8 Just Because a Company is Big, Doesn’t Mean That They Have the Best Price
While bigger may be better in some areas of commerce, the solar panel installation industry isn’t necessarily one of them. That’s why we encourage consumers to explore as many options as possible, including the smaller businesses.
In fact, according to a recent report from the United States government, larger installation companies often offer prices around $2,000 to $5,000 more expensive than their smaller counterparts.
After getting your offers from these bigger companies, always take them to some smaller companies to see if they can beat those prices.
For homeowners in the early stages of the bidding process, there are several solar installation calculators on the internet that can help you calculate the price of what your installation should cost.
Pricing of Solar Power Systems
One of the most common questions that we hear people ask about solar energy is how much it will cost for them to have a solar system installed.
While this price varies from property to property and state to state, we can give you a rough guideline of what you can expect to pay for a solar energy system.
As of 2017, the average homeowner converting to solar energy can expect to pay between $2.87 and $3.85 per watt to install a solar system. For a net cost, this averages out to around $16,800 before tax credits.
After tax credits (for the average 5kW system), homeowners can expect to pay between $10,045 to $13,475. That price dropped significantly between 2016 and 2017.
Average by Size
Of course, not every home or business is the same size. Some system will be smaller and some will be bigger, so it can be helpful to build out those averages based on the size of the system to get a better idea of the price at which you may be looking.
At the moment, the average solar energy system in the United States is around 5 kilowatts (kW), and the average price per kW is around $3.16. Using that size and that price, the system would cost you $11,060 after the federal tax credit.
For systems bigger than average, here are the approximate prices that you can expect to see:
- A 6kW System: $13,300
- An 8kW System: $17,700
- A 10kW System: $22,100
These are the prices that you would get after deducting the 30% federal tax credit. Depending on the state and municipality that you’re in, these prices can drop even further.
Factors That Affect Your Price
Although these averages are certainly helpful, you’ll likely find that your solar panel installation cost will vary by company.
So, why is that?
The first reason as to why you might get several different quotes is that the equipment used in your installation varies from company to company. Some companies may prefer to use higher-quality equipment that costs more upfront but saves more energy in the long-term.
After equipment, the next biggest varying expense that you’ll find is that cost for both permits and labor. Usually, you’ll have to pay a fee if you want your solar power system to be connected to the mainstream energy grid. Then, you have to pay for the hours that the people actually spend on installing your system. The cost for labor varies from company to company.
Finally, not all homes are created equal. For example, a south-facing roof with an angle of 30 degrees is simple for your installer. However, many people have roofs with multiple levels, dormers, or skylights. Every extra detail like this makes your contractor’s life a bit more difficult, which then increases the price.
One of the most important benefits to a solar energy system for many people is the amount of money that they’re able to save by leaving traditional energy behind.
To get to the bottom of the answer, it’s helpful to look at how much the average person in the United State spends on traditional electricity each year.
To start, the average American household uses around 11,000 kilowatt-hours (kWh) of electricity each year. For the average amount spent on electricity per year, you would then multiply those kilowatt-hours by the average electricity rate of $0.1287 per kWh. With that number, you find that the average American household spends around $1,400 per year in electricity.
However, what’s more, is that that number does not stay the same over the years. When comparing your costs, it’s important to remember that the price of electricity is volatile and can change rapidly. In fact, electricity rates have risen an average of 2.2% each year over the last 10 years.
When you use solar energy, you don’t have to worry about cost inflation. The only costs that you pay for your solar energy are the costs associated with installation and any extra energy costs in the event that your solar panels do not cover 100% of your electricity needs.
With the following information being used, we can then estimate how much money you can save in Arizona by converting to solar power:
- Size of the System: 5 kilowatts (the national average)
- Amount of Electricity Needed: 11,000 kilowatt-hours per year (the national average)
- Inflation of Utility Rates:2%
- Percent of Electricity Needs Met by Solar System: 84% (marketplace average)
- Electricity Rate: Arizona state average as of September 2016
- Solar Panels Owned or Leased: Owned
Based on these assumptions, citizens of Arizona can expect to save, on average, around $17,033.
What’s more is that you’re helping to clean up the environment in addition to saving yourself a significant amount of money. When you install a solar energy system, you reduce the amount of greenhouse gases that you put into the atmosphere.
To give you an idea of how much impact you can have on the environment by switching to solar, consider that the average car emits around 4.7 metric tons of carbon dioxide per year. With a 5kW solar system (the national average for size), you reduce your carbon dioxide emissions by 4.9 metric tons per year.
By switching to solar, you offset the negative environmental effects that one car has on the world each year.
Solar Tax Credits
When people are trying to decide whether converting to a solar energy system, what often puts them off is the high upfront cost.
Luckily, both the federal government and several state governments have set it up so that those who transfer to solar energy can reduce the cost with tax credits.
First, let’s look at the federal tax credit.
The federal tax credit, known formally as the investment tax credit (ITC), allows you to deduct 30% of the total cost of your solar panel installation from your federal taxes. This tax credit applies to both residential and commercial solar systems, and there is no limit to its value.
With the ITC, the average solar shopper saved around $5,000 on their solar system.
However, the 30% tax credit isn’t going to last forever. Starting in 2020, the percentage that you can save on your solar system goes down with each year that passes. In 2020, you can deduct 26%. In 2021, you can deduct 22%. In 2022, you can deduct 10% from your commercial solar system and none at all for residential systems.
You are eligible to receive this credit as long as you are purchasing the solar system and not leasing it. Even if you don’t have enough tax liability to receive the full 30% deduction on your taxes, you can opt to continue the deduction over your next year’s taxes.
You claim this deduction when you file your federal taxes.
For those that live in Arizona, you can save even more money through state tax credits.
The first tax credit available to you as a citizen of Arizona is the Residential Solar Tax Credit. This tax credit reimburses you for 25% of your solar system up to $1,000. This money comes off of personal income tax the year that you have your system installed.
Second, Arizona residents are eligible to receive the Solar Equipment Sales Exemption. With this exemption, you don’t have to pay any sales tax on your solar system equipment.
In addition, you can also receive the Energy Equipment Property Tax Exemption. This exemption means that you don’t have to pay any taxes on the value that you add to your home with your solar system.
Frequently Asked Questions About Solar
Q: What is net metering?
You’ll likely hear this phrase often when researching your solar installation. Basically, net metering is the way that your utility company will credit you for the energy produced by your solar panels. Under the net metering system, you only pay for the energy that you use past what your solar panels can produce. Policies vary from state to state, so be sure to check the policy in your home state.
Q: How do solar photovoltaic (PV) panels produce energy?
During the day, solar panels soak in the sun’s energy. After absorbing this energy, the the panels then convert the energy into direct current (DC) electricity. As most homes and businesses run on alternating current (AC) energy, the energy has to be converted once again. The DC electricity passes through a converter to be changed in AC energy that can be used in the home or business.
Q: Do my panels produce energy in cloudy weather?
As solar panels depend on sunlight to produce energy, your solar system will produce less energy on cloudy days and no energy at night. However, rising electricity costs and available tax cuts still make solar energy a viable option even in more cloudy cities.
Q: It snows a lot where I live. Is that a problem?
Again, your solar panels need direct sunlight to produce as much energy as possible. When your panels are obstructed by snow, they are unable to produce energy. However, snow usually is not heavy enough to cause any structural damage to your system. Also, since your solar panels are tilted, snow will usually slide right off.
Q: Will my solar energy system provide power during a blackout?
Due to safety concerns, your solar energy system will also shut down during a blackout. If your system continued to put power into the grid, it would put emergency responders and repair-people at risk. However, there are inverters available that will provide you with power in the event of a blackout.
Q: Is maintenance expensive?
One of the best things about owning a solar energy system is that there is little to no maintenance required. As the system is made of durable tempered glass, your system can go 25 to 30 years without needing much maintenance at all. You likely won’t even need to clean it on a regular basis. Depending on the company that you used for installation, there may even be a warranty that covers whatever maintenance you do need.
Q: I’m looking at ways to finance my solar system. What can you tell me about secured solar loans and unsecured solar loans?
There’s one significant difference between secured and unsecured solar loans. With a secured solar loan, you promise one of your assets, usually your home, as collateral for the money that you borrow. With an unsecured loan, you do not have to promise any of your assets. However, the catch is that interest rates are usually hirer with unsecured loans to make the risk worth it for the company.
Q: Can I afford to convert to solar energy?
If you can afford to pay your energy bill every month, you can afford to convert to solar energy. With all of the different financing options, homeowners with good credit will have a very easy time making the switch.
Q: Will I have to replace my roof to install a solar energy system?
No, you will not have to replace your roof. However, solar energy systems are built to last for around 25-30 years. If you have to replace your roof at any time during those 25-30 years, it can be quite expensive. Thus, it’s important that you take care of any roof maintenance before having the solar energy system installed.
Q: Will a solar energy system increase the value of my home?
If you own your solar energy system, studies have shown that it will increase the value of your property. However, that is not the case if you are leasing your system. A leased system adds no value to your home since you do not own it.
If you’re leasing a solar energy system, you can work out a deal with your company to purchase it before selling your property. Otherwise, you can work with the leasing company to transfer the solar energy system to the person buying your property.
Q: What is shared solar?
Some communities have what’s called a community solar project. In a community solar project, there is a solar energy system located somewhere in your community. When you buy into the project, you receive a portion of the energy produced by this communal solar system.
While you may not own it or receive all of the energy that it produces, it will still save you some money on your energy bill. This option is great for people who either can’t afford to convert their home to solar energy or don’t have a home that is fit to house solar panels for whatever reason.
If you decide to move away from your home and into a different community, you will have to sell your share of the community solar project.