The popularity of residential solar systems is on the rise. But how can you switch to solar power for your home? We’re all used to dealing with power companies and other utilities, but most of us don’t have experience finding and choosing a solar provider.
Before you go solar, there are a few things you need to understand about how the solar industry works. So let’s take a look at the important types of solar businesses, which factors you need to consider when deciding on solar, and how you can find and choose a solar provider.
How the Solar Business Works
There are two main groups of companies that you need to understand in the solar industry: solar manufacturers and solar installers.
Who Makes the Solar Panels?
If you decide to get solar panels, you’ll rely on an installer. However, this installer is not typically going to be working for the manufacturer. Just like the contractors who install flooring, swimming pools, or any number of other home improvements, solar installers can give you a choice of manufacturers. (There are exceptions, though, and we’ll get to those in just a moment.)
LONGi Solar, Tongwei Solar, and JA Solar are currently the world’s leading manufacturers of solar panels. All three of these companies are based in China, which has been the hub of solar manufacturing for several years.
However, these Chinese companies aren’t the only major players in the market right now. Tariffs, shifts in demand, and supply chain issues have caused a shakeup of the solar panel manufacturing industry since 2020. Some Canadian and American manufacturers have been gaining significant traction during that time.
As of 2021, First Solar (a U.S. manufacturer) and Canadian Solar became the first non-Chinese companies to make the top 10 list of largest solar panel manufacturers.
Solar Installers
Most solar manufacturers don’t handle the installation process themselves. Instead, they rely on professional installation companies like Sunrun. A notable exception is Tesla, which manufactures its own panels and runs one of the largest solar panel installation companies in the U.S.
The labor costs of a professional installer are a significant part of the initial setup cost for most solar systems. A typical installer can charge anywhere from $3,000 to over $6,000 for a standard 5-kilowatt system, with higher prices common in areas with few qualified installers.
You could try to install your own solar panels, but it’s almost always better to use a professional solar installer instead. While some newer solar components are relatively easy to install, those may not be the best systems for your home. In the long run, you’re better off having a solar installer help you find the ideal system for your home.
Most importantly, your solar system has to be attached to your electrical service panel. DIYers will generally have to hire a licensed electrician to safely handle that step. If you use a solar installer, they’ll handle everything.
Deciding on Solar
Before you begin your solar journey, here are a few questions about solar energy that you should consider.
Is Solar Right for Your Area?
Solar works best in areas where the sun shines bright all day, every day. Hawaii, California, New Mexico, Florida, Colorado, and Nevada have a definite advantage in that category, but improvements in solar panel technology are making it practical in more and more places.
Is Solar Right for Your Home?
Most residential solar systems rely on rooftop solar panels. The size, slope, and overall shape of your roof are important factors in deciding whether your home is right for solar. Here in the Northern Hemisphere, solar panels work best on roofs with south-facing slopes of between 15 and 40 degrees because of the angle of the sun’s rays.
Roofs with excessive shade from nearby trees or structures can be especially problematic. The age of your roof is important too, particularly if your roof will need repair or replacement in the near future.
Is Solar Right for Your Wallet?
Typical residential solar systems cost $15,000 to $25,000. That’s a huge upfront investment, but the average household saves almost $1,500 in electricity costs each year over the 25- to 30-year lifespan of a solar setup. That’s because solar energy can keep you from having to draw costly power from your local electrical grid — and, in some cases, can even make you money through the popular process of net metering.
On top of the annual savings, you can use tax credits and rebates to offset a portion of the initial cost of your solar panels. Based on recent home sale prices, equipping your home with solar also increases its value — by around $15,000 in a typical solar-friendly state (and by more than $30,000 for the median home in New Jersey, which is the state where solar installations influence property prices the most).
Is Now the Right Time to Buy Solar?
The federal solar tax credit for residential homes, currently set at 26 percent, is scheduled to expire in 2024. Given those credits and the rising cost of home energy, now is the perfect time to get solar for most homeowners.
However, other homeowners might prefer to wait for solar costs to go down, particularly if they aren’t in a position to take advantage of the tax credit.
Who to Call First When Shopping for Solar
Before you decide to buy solar, you should find a solar installer in your area. They will be your main point of contact through the purchasing process. And, of course, they’ll be the ones installing your new solar system.
Your installer will inspect your home and go over your options with you. They’ll be able to help you determine whether your home can support solar and whether solar is a good fit for your financial situation and energy needs. Most solar installation companies will even help you find and compare financing and leasing options.
Tips for Shopping Around
Your solar journey starts by looking for your local solar installers. That can be as simple as searching for “solar installers near me.” But you’ll be better off if you prepare in advance by following these seven easy tips.
1. Look up local solar panel pricing.
Get to know the typical solar panel installation costs in your area. These can vary drastically by state and even by city or county, so try to find information specific to where you live.
2. Understand your finances.
Figure out how much you’re willing to spend on this project and whether it’s a viable long-term investment.
Take a look at your average monthly energy costs to determine how much you could save with solar. Make sure to account for higher energy bills in the summer or winter, depending on where you live. This information will also be important in determining how many solar panels you need to power your house.
3. Consider financing and leasing options.
More and more companies are now offering to finance large solar purchases. If the $15,000 upfront cost is too much, you should ask solar installers if they offer financing, such as solar loans and home equity loans. Often, you can find terms that spread the cost of your solar panels over 15 or more years.
You’ll likely also find leasing options for your solar system. Financing or buying the panels will typically save you more money in the long run, but leasing gives you the lowest upfront cost.
Solar leasing contracts typically last 20 or more years, and you will have a hard time selling your home until the lease is over. Be sure to ask your solar installer about the contract terms, including what happens if you have to break the lease or transfer it to the home’s new owner.
4. Know your city and HOA rules.
Cities and homeowners associations (HOAs) often have specific rules about whether you can install solar and which types of solar systems you can use. Some HOAs are very particular about properties maintaining a similar outward appearance, and solar panels can make your home stand out.
5. Get recommendations.
Talk to friends and family that have installed solar on their homes, especially if they live in your area. Ask them how they chose their installer and who else they considered. Remember that it’s just as important to learn who to avoid as who to choose.
You can also talk to local contractors as they will likely have experience with solar installers or solar power companies in your area. Before you spend your hard-earned money, it’s important to get answers to your solar power questions.
6. Read reviews.
Once you have a list of potential installers, be sure to check out any reviews you can find about them.
You should also read reviews about any solar panel companies your prospective installer suggests and ask the installer for their opinions on any negative aspects addressed in those reviews.
7. Check licenses and certifications.
The North American Board of Certified Energy Practitioners is the main certifying board for solar installers. You should make sure that your installer is licensed and certified with it or with a comparably trustworthy organization before you hire them.
How to Start With Solar
Whether you’re driven by the financial or environmental impact of solar, now is a great time to consider joining the green revolution.
The process will seem daunting at first, but the tips we’ve provided will help you choose the right solar installer. Once you have an installer on your team, they’ll guide you through every remaining step of the process. You’re only a few steps away from realizing all of the benefits of a solar-powered home.