Ask these 10 questions if you want to get rooftop solar

Solar panels are the symbol of clean energy for many. But actually getting them onto your rooftop requires grappling with all sorts of complexity.

“As a journalist and researcher, I’m usually pretty good at finding out how things work,” said Katie Fernelius, who found herself trying to decipher a solar sales pitch after buying a house in New Orleans. ​“But the solar marketplace felt very confusing. It was really difficult to know what all of my different options were and how empowered I was as a consumer in navigating those options.”

When buying, say, a used car, customers generally know to be on guard, but that may not be the case for solar power, which enjoys a virtuous reputation for reducing pollution and fighting climate change. But as with any other product, the companies selling solar installations are incentivized to maximize their profit. And like Fernelius, many customers find it hard to decipher all the different variables that go into the deals those companies are offering.

Fernelius knew she wanted solar and a battery after living through 10 hot and humid days without grid power in the aftermath of Hurricane Ida. Throwing out a fridge full of rotting food and trying to sleep through sweltering nights hammered home the value of resilience. But first, she had to sift through a roster of unfamiliar solar financing options and discern a fair price for the system she wanted.

“I wish it were more accessible to people so they didn’t have to spend as much time [figuring it out],” Fernelius said.

If you are thinking about getting solar panels, you are probably in a similar quandary. To help you navigate the process, Canary Media has compiled 10 key questions to ask yourself along the way. Answering them should enable you to strike the deal that works best for your situation.

1. Are rooftop solar panels the right choice for me?

Start by considering the big picture: Are solar panels on your rooftop really the best way for you to access cleaner energy?

There are many ways to power our lives with clean energy. Some utilities already supply clean electricity to their customers, especially in places with lots of hydropower. For example, if you’re in British Columbia, the grid is almost entirely carbon-free already. Start by checking your utility’s portfolio to see if building your own mini clean power plant would really provide you with a cleaner supply of electricity.

Alternatively, you might be able to sign up for community solar — an especially good option for those who don’t own their own home. At its best, community solar gives customers immediate, guaranteed savings with almost no strings attached. You subscribe to energy produced at a local solar project and pay a rate that’s lower than what your utility charges. These projects are typically much larger than a rooftop solar installation, so they benefit from their larger scale.

“The roof is sort of an arbitrary location,” noted Richard Caperton, who runs the policy and regulatory team at Arcadia, which connects customers to community solar subscriptions. ​“A community solar project can be put in a place that’s more optimal for the grid.”

You might not enjoy the level of savings that a good rooftop solar purchase delivers, but you can typically pay 5 to 20 percent less than the utility rate, depending on where you are, Caperton said. And you won’t lock up thousands of dollars investing in your own panels or have to wait years to earn your money back.

“Community solar is one of the best options for you as a consumer,” said Vikram Aggarwal, founder and CEO of EnergySage, which runs an online community solar comparison platform.

The catch is that states need to have policies in place that encourage community solar — and not every state does. EnergySage’s marketplace covers around 10 states. Arcadia, which has signed up customers for 500 megawatts’ worth of community solar, is active in nine states plus Washington, D.C.

2. Is my roof right for solar panels?

Before you commit to solar panels, you’ll also need to think through practical considerations, like the state of your roof and how much sun it gets.

If you have a bevy of old-growth trees shading your home in the summer, you may want to check out community solar instead of having to ​“clear-cut your yard to put up a solar system,” said Angela Hemmila, owner of local installer Solar Rising, based in southeastern Massachusetts.

Or, if your roof is old, you may need to replace it before installing solar.

Even if your roof is structurally sound, it could be oriented in a way that just doesn’t get much sun. Solar companies have tools to model expected production, but you can explore for yourself with Google’s Project Sunroof, which builds on Google Earth data to calculate how the light falls on individual houses.

3. Should I lease or buy my solar panels?

There are two ways to get solar panels: buy them yourself or pay a company to lend you theirs. Each approach has its own challenges and rewards.

To buy a system, you need thousands of dollars of cash on hand or access to financing. If you have those, you keep all the benefits of the solar and its associated tax credits and incentives for yourself.

“Right now, there’s fierce competition on the financing side, so the cost of capital keeps dropping,” said Max Aram, CEO of Solar.com, which generates designs for solar customers and bids them out to installers. ​“It just makes sense for customers to own the system.”

“We don’t offer a lease option at all,” said Hemmila, the local installer from Massachusetts. ​“We’re always going to say purchase, and if you need financing, get a loan.”

When choosing from the growing menu of solar loan options, keep an eye out for ​“dealer fees.” Some lenders advertise a low annual interest rate while tacking on fees that raise the upfront price of the installation.

“We’re not comfortable passing those dealer fees onto the customer,” said Hemmila. Instead, she directs customers to talk to local banks for what she calls more ​“straightforward” loans, like a home equity line of credit.

Leasing eliminates the need to have a bunch of cash on hand or to navigate loan terms. Instead, you simply pay a monthly rate to your solar provider. This financing option was crucial to the solar industry’s growth years ago when the technology was much more expensive.

Simplicity is a big selling point for solar leases, said Nora Hennings, director of business development at Sunrun. Sunrun is the largest rooftop solar installer in the U.S. and does more installations based on leases than sales.

“Customers don’t have to put anything down upfront,” Hennings said of the company’s lease offering. ​“We stand behind the systems we install and the fact that they’re going to work.”

That can be attractive, especially for people with fixed incomes or those who don’t want the hassle of filing for tax credits and other incentives. Sunrun takes care of all that.

But leases also come with complex contractual language and initiate a long-term relationship with the company that owns the solar panels on your roof. Sunrun typically sells 25-year leases, meaning that if you sign up now, you’re committing to the arrangement through 2047 (Hennings pointed out that Sunrun has a whole team dedicated just to helping customers pass along their solar lease to subsequent owners when they sell their house).

If you own your panels, you keep all the benefits of the solar array. If you lease, you hand some of that value over to your solar company for taking care of things for you. When deciding between these two options, compare total lifetime payments versus energy-bill savings between lease and purchase proposals, said EnergySage’s Aggarwal. Typically, ​“It’s a no-win situation for a lease.”

4. How many solar panels do I need?

Once you’ve decided on financing, you need to figure out how much capacity to install. That depends on how big your roof is, how the sunlight hits it, how much electricity you need, and how much you’ll earn for producing extra power.

If you live somewhere with ​“net metering,” you’ll receive credit at the retail rate for any electricity you don’t consume. That could justify a bigger solar installation because the more you produce, the more you cancel out your bill.

Tax credits lower the out-of-pocket cost (here’s more on the federal Investment Tax Credit), which sometimes prompts installers to provide quotes for bigger systems. But just because policies and incentives make your investment look smaller doesn’t mean you need that bigger solar array. Start with how many panels it would take to offset your electricity consumption, and then your installer can pitch you on the upsell from there. Just make sure they have an argument for why they picked the capacity they did. After all, the more they sell, the more money they make.

That said, it’s important to keep in mind that the amount of electricity you need may change over time.

“You need to think about what kind of lifestyle you’re going to have in the future,” Solar.com’s Aram said. ​“If you want to buy an electric car, how much would that add to your energy consumption?”

The electrification of buildings is a growing sector of the clean energy economy. If you’re mulling the switch to an electric induction stove or from gas heating to electric heat pumps, you’ll use even more electricity. It’s easier to build a bigger solar array upfront than to try to add to it after the fact.

What system size should you expect in absolute terms? For reference, the average quoted system on EnergySage, which lets installers submit proposals to customers, was 10.3 kilowatts in the second half of 2021. Solar.com, which generates proposals and bids them out to installers, had an average system size of slightly more than 8 kilowatts.

Solar professionals often describe a system by how many kilowatts of power it can produce because different solar panels come with different production capacities. For instance, you’d need 21 of these 380-watt panels from LG to build an 8-kilowatt system.

5. Should I go with a big solar company or a local contractor?

You’ll also need to decide which company to do business with. Solar installers range in size from Sunrun, by far the biggest in the U.S., to regional installers that have tens of thousands of installations under their belts, to local contractors that work on a smaller scale.

The bigger companies have more infrastructure for technology and customer service. They buy in bulk with sophisticated strategies for leveraging tax credits and tariff-free solar imports. Larger companies like Sunrun strike deals for ​“virtual power plants,” where homes get paid for using solar-charged batteries in ways that help the grid, Hennings noted. And, with their ample funding, they may be more resilient companies, which matters when you’re hoping to maintain a multidecade relationship with them.

The flip side is that big corporations pay to maintain their robust nationwide infrastructure and spend a lot of money on what’s called ​“customer acquisition,” which refers to all the door-knocking, glossy pamphlets and online marketing they need to convince people to buy their products.

“Big brands are typically more expensive,” said Aggarwal, citing data published in Lawrence Berkeley National Lab’s Tracking the Sun report. ​“You’re paying for their overhead.”

Local installers are more likely to win business through referrals from happy customers, a cost-free form of customer acquisition. That means they may be able to give you a cheaper proposal than a larger company can. They won‘t have the same scale of resources to ensure customer satisfaction, but they may be more motivated to keep you happy than a bigger company with a territory that spreads across vast areas.

“In our experience, a lot of the national companies that sweep in through this area tend to chase after high incentives, and when the incentives drop, they leave town,” said Hemmila, who’s run Solar Rising out of Cape Cod since 2012. ​“Get a national quote, but get a local quote, too.”

6. What else should I do to manage my energy consumption?

Rooftop solar gets a lot of attention, but in reality, your ultimate goal is to reduce your electricity needs as much as possible, and then meet that lower need through solar. This is far more cost-effective than investing in a massive solar array and trimming consumption later.

If you are investing in solar panels, you should have an energy audit conducted to see how you can reduce the amount of energy you consume. Insulation, thicker windows, smart thermostats and efficient appliances all help. Some contractors bundle these with solar, which means you can finance them together. Many jurisdictions offer incentives for this type of upgrade. It’s well worth exploring if you’re committed to making your own clean energy.

7. Am I getting a good deal on solar?

Rooftop solar is a big purchase, easily as much as a car. Given the stakes, it’s absolutely worth it to shop around.

“Get quotes from at least three, if not five, companies,” said Aggarwal. ​“Find the right companies [that are] high quality, and talk to people to understand why they’re proposing what they’re proposing.”

Online tools such as EnergySage and Solar.com let you input your details and receive multiple proposals from a pool of companies that have already been vetted. Solar companies Complete Solar and Palmetto run online platforms to connect customers to vetted installers.

If marketplaces like that don’t work for you, call up a few different companies, get their proposals, then play them off against one another. This strategy is particularly crucial to remember if a salesperson shows up at your door and pushes you to sign a contract on the spot.

That sales approach rewards the door-knocker for selling systems as quickly and expensively as possible, two factors in which the seller works at cross purposes to the homeowner.

“Our sales process is 90 percent education. […] We don’t want to have to convince you to do this,” said Hemmila, whose company’s sales are almost entirely based on referrals. ​“If somebody’s knocking on your door, chances are they’re going to your neighbor’s house and the people down the street. As the customer, you’re just a dime a dozen to them.”

For an inside look at structural incentives for solar salespeople, this YouTube video spells out how the goal is to put as much space between the actual cost to install the system — dubbed a ​“redline” in industry-speak — and what a homeowner agrees to pay.

“In the solar world, a ​‘redline’ is basically the price that the solar company is going to give you to sell their products,” James the Solar Expert explains to would-be solar sales pros. ​“It’s their bottom line, and anything above and beyond that price is your profit.”

Keep in mind that the floor price swells if it has to include upfront dealer fees for a solar loan. Try getting a referral-based offer for a cash deal, and compare that with offers from a door-to-door seller and with financed options.

For reference, the median price quoted on EnergySage in the second half of 2021 was $2.68 per watt. There are 1,000 watts in a kilowatt, so if you paid $2.68 per watt for the average-sized 10.3-kilowatt system on that platform, it would clock in at around $27,604. Exact pricing will vary regionally and house by house, but if you see a quote that is radically higher than that ratio, that’s a major red flag.

Monopoly utilities don’t have to fight for your business. If a solar installer is just trying to beat the utility rate, you could get an overpriced offer that looks like a win-win. To secure a better deal, make solar companies compete for your business.

8. How long will it take me to pay off the solar investment?

Even if you space out payments with a lease or loan, you’re choosing to devote your money to solar panels, wiring and inverters instead of an S&P 500 index or Bitcoin.

The average rooftop solar payback time for quotes on EnergySage was 8.7 years in the second half of 2021. In other countries, the cost of rooftop solar is markedly lower due to easier permitting, lower component costs and cheaper customer acquisition. In the U.S., it takes more years to pay off the more expensive investment.

If electricity bills aren’t a pain point in your life, solar may not offer an enticing enough payback period to convince you to make the leap. But if your utility bill stretches your budget each month, solar could make a big difference. And if cash flow is a holdup, check out companies such as PosiGen that make solar accessible to lower-income households by making sure they save more than they spend on their system right from the start.

9. Should I get a battery too?

Autonomy and resilience are major selling points for rooftop solar. But just like the rest of the grid, solar panels stop working during a blackout. To achieve true self-reliance, you need more equipment.

You can get a diesel generator, but along with that comes reliance on fossil fuels and the need to stock fuel (not always available in an emergency) and maintain the equipment. There’s also the risk of carbon monoxide poisoning. The cleaner alternative: link a battery to your solar panels, creating a package deal known as solar-plus-storage.

In this setup, the house cuts itself off from the grid during an outage (crucial for protecting the utility workers fixing power lines nearby), then runs off the battery, which gets recharged by solar panels. The drawbacks are the cost of battery packs and their limited capacity.

The vision of a solar-battery system running a whole home indefinitely is out of reach for most consumers. An affordable energy storage system will likely force you to hand-pick your most critical appliances to keep online.

A battery for backup is an added cost when going solar: Parts and labor regularly run from $10,000 to $20,000. But there are limited circumstances when it can add to your energy savings. Some utilities levy time-based charges, so consuming electricity during peak demand hours costs more than at other times. In these utilities’ territories, it could make financial sense to store your solar power to avoid consuming grid power during the expensive time periods.

Some regions have programs that pay to use home batteries at certain times that are helpful to the grid. In Massachusetts, there’s ConnectedSolutions. Other places call this a ​“virtual power plant.” In Oahu, Hawaii, the utility is paying thousands of dollars to solar customers who add a battery, as the island musters enough clean energy to replace its soon-to-close coal plant.

10. What should I be prepared for after installation?

Every piece of technology wears down over time. Look for a lengthy ​“workmanship” warranty, which covers the quality of installation. And try to get solar panels that come with 25-year equipment warranties, which is common for high-quality manufacturers. If a company won’t stand behind its products that long, watch out.

Solar panels can last for decades, but if you get a battery, it’ll likely have a shorter warranty. Inverters, a crucial piece of auxiliary equipment, may die before solar panels, too. Make sure you know who’s on the hook to replace them when that happens.

Then there’s stuff you can’t plan for. Hemmila’s company in Massachusetts gets calls to assess critter damage, such as when squirrels and raccoons get cozy under panels and start chewing wires.

“That’s considered an act of nature, like if a tree fell on the house,” Hemmila said. Her advice: Reach out to your insurance agent and add the solar to your existing homeowners insurance coverage.

But barring events like that, you should be able to forget about the panels on your roof soon after they’re installed and start reaping the benefits when a much smaller utility bill comes due.

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Check out Canary Media’s definitions of terms to know if you’re considering rooftop solar.