Standardizing Solar Quotes

21 August of 2010 by

calculator Standardizing Solar QuotesThis year at the Intersolar conference, we had the pleasure of having lunch with Guy Snow, a seasoned installer from Las Vegas. As an installer, he works directly with homeowners and, therefore, has agood understanding of where the general public stands on solar education. We talked about what he sees as the major knowledge gaps for homeowners and what installers can do to provide accurate and transparent solar quotes.

Homeowners need to know how to read their energy bill
People understand energy use when talking about miles per gallon (mpg) for vehicles, but they do not yet grasp cost per kilowatt-hour ($/kWh).  Educating homeowners to be able to understand both the rate they arebeing charged and the amount of energy they are using, and how thatenergy is generated (fossil vs. renewable), is vitally important. Withthis knowledge, they can monitor their energy use and make informeddecisions about how to reduce and offset this usage with renewableenergy systems like solar or wind.   
 
Standardizing the solar quote
For most people, reading and comparing solar quotes can be adaunting task. According to Guy and other installers with whom we havespoken, many solar installers are not providing comparable informationon their quotes and, in some cases, are neglecting to include vitalinformation. If we could arrive at an industry standard for solarquotes, it would make comparing quotes that much easier and go a longway to reducing homeowners’ confusion regarding installing solar.Without an industry standard, it will be difficult to instillwide-ranging consumer confidence, which is necessary in order to growthis budding market. Specifically, many believe it is important toreport the cost of a solar project using cost per kilowatt-hour, rather than cost per watt figures. The main reason is that the $/kWh metricprovides for a more accurate cost, because it is based on the solarproject’s generation of electricity over a certain time period, ratherthan on the theoretical maximum output the solar power system might produce in optimum operating conditions.
 
Therefore, we propose that all solar quotes provide the following details, at a minimum:
  • System size in DC Stand Test Conditions (STC) kilowatts;
  • System size in AC California Energy Commission (CEC) kilowatts;
  • What percentage of the current electricity usage the solar power system will replace;
  • Total Cost both before and after all rebates;
  • Cost per kW in both STC-DC and CEC-AC;
  • The annual estimated production of the solar power system in kWh;
  • Cost per kWh;
  • Solar panels – number, make, model, and rating;
  • Inverter – type, size, and efficiency;
  • Where all components are manufactured;
  • Estimated monthly cost savings;
  • Financial metrics – payback period, and return on investment (ROI) and internal rate of return (IRR).

If the installer offers a solar lease or power purchase agreement (PPA), we would also expect to see the following:

  • Monthly lease or PPA payment;
  • Annual percentage increase in payments;
  • Downpayment options;
  • Term of lease or PPA;
  • 15-20 year breakdown detailing costs and savings;
  • All services included or excluded (i.e., monitoring and maintenance);
  • All terms and conditions for early termination of contract, home sale, and end of lease/PPA options.

If you are an installer, let us know what you think of this proposal. What would you add or remove? 

By Matthew Ryder-Smith

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