The Best Solar Guide For Your Home

Going solar has financial benefits but the potential pitfalls are real. You need a solar guide with good, objective information so you can make a wise buying decision. Everything that you need to know before getting solar is here in our Ultimate Solar Guide

The Guide You Need To Get The Best Solar

You’re thinking about going solar, and want a great looking, competitively priced, high performing system, but you don’t know where to begin. You’ve seen solar installations that completely ruin a home’s curb appeal. You’ve heard conflicting information from salesmen about what solar panel is the best. Most online information is incomplete and biased. To make your solar journey easier, this solar guide has everything you need to know, with lots of videos and pro tips to demystify the process.

Dollar sign surrounded by question marks symbolizing questions about solar costs

Your neighbor’s electric bill is only $10 per month, but her system is ugly and her contractor was a nightmare. Another neighbor has a low profile, beautiful looking system, but he’s not seeing the savings he was promised. Armed with the knowledge in this solar guide, you can get the financial benefits of solar, plus have a beautiful installation, without breaking the bank or ruining your home. The Solar Guide will answer your solar questions and give you insight into little known facts about going solar.

The Insider’s Guide To Installing Solar

With years of experience in solar, we share industry secrets and insider information in this solar guide to help you make a smart decision. A well designed solar system should offset your annual power usage by 110-120%, and do so at the same price or less than your current electric bill. Keep in mind that there’s a finish line when you buy solar, unlike your utility bill. Imagine if you could pay for your car with the money you pay for the gasoline that you fill it with. Buying solar can be just like that: The money you would send to your electric company is redirected to pay off your solar.

Solar Consumer Protection Guide Pages
Pro Tip: Protect your solar investment by reading this guide

All you need for a great solar experience is some basic, objective knowledge. Unfortunately, most information out there is promoting a solar company or a “quote” company. The Solar Guide will teach you the principals that you need to know before getting solar.

House with solar panels on a calculator for energy savings calculations with solar

The 4 Cornerstones of Solar

Solar isn’t only about what brand of solar panel you buy. The panel you choose is just one of four important elements that need to be considered when embarking on a solar project. The four cornerstones of your project that we will cove in-depth are:

  1. 1. The Equipment: Solar Panels and Solar Inverters
  2. 2. The Installer: The contractor putting the solar on your roof
  3. 3. The Financials: The Solar Tax Credit, Solar Loans, and Solar Pricing
  4. 4. Your Home: The foundation of your project

The Solar Guide has broken down the complex subject of solar into four basic cornerstones, preparing you to get quotes and make a wise decision that will pay dividends for years to come.

The Best Solar Panels & Inverters

While solar PV systems consist of numerous pieces of equipment, the basic performance boils down to two key components: Solar Panels and Solar Inverters. These two pieces work together to transform the power of the sun into power for your home. Most homeowners want to know what is the best solar panel and how is that determined.

Choosing To The Best Solar Panels

Most information about solar panels focuses primarily on efficiency, but there are 3 key factors to consider when choosing the right solar panel for you. The Solar Guide’s 3 Key Solar Panel Quality factors are:

  1. Warranty
  2. Efficiency
  3. Degradation

We didn’t list the factors by order of importance. For the best long term value, degradation and warranty are most important.

1. The Warranty: What Does It Cover?

Solar panels come with two different types of warranties: An Equipment warranty and a Performance warranty. An Equipment warranty covers manufacturers’ defects, and a Performance warranty guarantees that the panel will produce a minimum amount of power over time.

A homeowner studies a solar warranty
Pro Tip: A good warranty covers shipping and installation

Enhanced warranties, only available through “Authorized Installers”, will even cover shipping and the labor to install the replacement panels. This certainly is valuable considering the cost of shipping and installing a solar panel. Be sure it’s all in writing… check the fine print.

The very best warranty in the industry is the all-inclusive Sunpower Warranty. The SunPower Complete Confidence Warranty is the only home solar warranty to cover your whole system (not just the panels). See the details of the best warranty in the industry.

It’s important to know that the manufacturers hold the warranty, not the installer. The chances that your solar installer will be around in 25 years is doubtful, however, the big names in solar panel manufacturing have a track record of financial stability. This is crucial, and factors into our list of Best Solar Panels for 2020.

2. What Is Solar Panel Efficiency?

The amount of power generated by the solar panel when it converts sunlight into electricity is the solar panel’s efficiency. It has nothing to do with a panel’s size or wattage. Efficiency is measured in a fixed area, such as a square inch. Higher efficiency panels produce more energy per square inch. Solar panels today have efficiencies ranging from 14% to 23%. A panel’s efficiency should be the primary consideration when your home has limited roof space or you’d like a smaller solar footprint on it.

Efficiency Level meter for solar panels
Efficiency matters most when your roof is small

Panel wattage is always increasing. Some panels are now up over 400 watts, but what does that ultimately mean? The best analogy is a light bulb: if you want 100 watts of light in your kitchen, you can use one 100 watt light bulb or four 25 watt light bulbs. The higher wattage of the panel can reduce the number of panels that you need on your roof to offset your electric bill. Say you need a 12 kW system; you can get thirty 400 watt panels or forty 300 watt panels. A limited amount of good solar roof space would make the 400-watt panel system a must for you.

Does Panel Efficiency Matter?

Most people don’t need to cover their roof in solar panels to offset their electric bill, and so efficiency doesn’t matter to them as much as other factors do. Remember, panel efficiency is only a primary concern if you have limited roof space relative to your power usage, or if you want to minimize the number of panels on your roof. Factor 2, degradation, is most critical to getting the best return on investment for your solar over time.

3. Degradation: Time’s Affect On Power

Degradation is how much less power a solar panel produces over time
Pro Tip: The lowest degradation is the best value

Degradation is possibly the most important factor when choosing a solar panel. Solar degradation is how much less power a panel produces over time. Simply put, how much power will the panel be producing 25 years from now. It’s much like aging, over 25 years we all slow down a bit. Panel manufacturers state in their warranty how much power the panel will be producing after a set number of years. The best panels will produce over 90% of their initial power output after 25 years. Conversely, the worst panels on the market will produce 80% or less over that same period, creating an ever-growing residual electric bill.

Assuming utility rates continue to climb as they have done historically, it’s crucial that in 25 years your system is generating as much power as is possible to offset those higher rates. Even though panels with the lowest degradation cost more upfront, over time they save you much more money and have a better return on investment.

The only time degradation is not a factor is if you plan to move out of the home in 10 years or less, but even then, it’s an important factor to your prospective home buyer. Also important to your potential home buyer is the aesthetic quality of the solar installation.


An all black solar panels
Sleek All Black Solar Panel

Installation quality affects the look of your solar system the most, which will be covered in the section on installers. The look of the panel does play a part though. All HOA’s require attractive black frames (instead of aluminum) to protect the curb appeal of the neighborhood. While most solar panels feature black frames, be sure to verify this with your salesperson. Commercial jobs, metal roofs, some flat roofs, and some ground-mounted systems use silver-framed solar panels.

Most important to a solar panel’s look is the color and finish of its face. There are two variations available. Black on Black is the most attractive. Black with white back-sheet (White Diamonds or Stripes) is not too intrusive and the most common. There may also be visible copper busbars running on the front, even on all-black panels. There is usually a premium for black panels. The most expensive panels have the copper on the back of the panel, creating a solid black, plasma tv look. Compare the looks of the premium panels below.

LG, Panasonic, and Sunpower panels in a side-by-side comparison
Comparison of the Best Solar Panels: LG, Panasonic, and Sunpower

What Are The Best Solar Panels?

Taking all of the above factors into consideration, here are the best solar panel brands on the market in 2020. New models are frequently released by these companies, so we don’t list specific models. This list will help you decide what’s best for your home before going solar.

Solar Guide To The Best Solar Panel Manufacturers

In alphabetical order, these manufacturers offer the best warranties and the best technology, along with financial stability. Not coincidentally, they’ve all been around for decades. Overall, Sunpower shines the brightest on every level:

  • LG: Recently increased its warranty terms and improved degradation ratings. With so many LG models on the market, be sure to check your quote to confirm what you’re being offered.
  • Panasonic: Their HIT technology makes their panels a top performer in hot climates, like desert cities. They are celebrating their 101st year in business. Their panels are lower wattage than the others. If your roof space is limited, they aren’t the best choice.
  • Sunpower: It may not be a household name, but in the industry, it is considered the premier solar panel and is the only complete all-in-one system in the industry. Over the years they have been the leader in setting the bar for high standards in efficiency, degradation, aesthetics, and warranty. It’s the gold standard, and their prices reflect that. If you want the very best for your home, look no further. See Sunpower’s panels here.

See California Solar Guide’s post about Solar Panels.

Now that we’ve covered the solar panel basics, let’s turn to the other necessary component for solar power, the inverter. No solar guide is complete without detailing what you need to know about solar inverters.

What Does a Solar Inverter Do?

The Solar Guide To Inverters

A solar inverter converts the DC power captured by your solar panels into AC power that can be used in your home. Unlike solar panels, there are very few inverters in the residential market with the warranty, reliability, and efficiency required to design a dependable solar system. The two inverters that dominate the residential market are microinverters and central inverters with power optimizers.

Are MicroInverters Better?

Microinverters are small inverters mounted under each panel, and they convert your power to AC right on your roof. The significant advantage of microinverters is that if a panel goes offline or is shaded, the rest of your solar continues to produce power. Another major benefit of microinverters is their flexibility of design including the ability to add more panels later without having to upsize a central inverter. You also get panel-level monitoring, giving you a detailed look at your system’s performance. The top microinverter has a 25-year warranty.

What is Clipping & Why it Matters

Microinverters can cause clipping during peak daylight hours if the microinverter capacity is less than the solar panel's output.
Pro Tip: Clipping is common with microinverters

The biggest disadvantage of microinverters is clipping. Clipping is when the panel output (wattage) is higher than the microinverter’s capacity, which is common. For example, if you have a 100-watt lightbulb in a lamp that can only output 60 watts of light, 40 watts of light would be clipped. Similarly, if you have a 370-watt solar panel with a microinverter that can only handle 290 watts, 80 watts of power will be lost during peak hours of the day, every day for every panel. Keeping the range small between inverter capacity and panel output is critical; Do not waste money on high wattage panels that are coupled with lower output micros. High wattage solar panels are often coupled with lower capacity microinverters. The system price is a good way to tell because higher capacity microinverters are much more expensive. Insist on seeing inverter output specs.

Central Inverter with Optimizers (Hybrid Inverters)

Central inverters convert the DC power from your panels to AC power in a unit mounted near your electrical service panel. Power optimizers are mounted on each panel to mitigate the effects of shading on an array. String inverters without power optimizers are like the old style of Christmas lights: when one panel goes down, all panels in the string are affected. If the central inverter itself goes down, you lose all the power from your panels connected to it. Adding power optimizers reduces the effects of shading and underperforming panels on the array, just like microinverters. They also enable panel-level monitoring and compliance with the Rapid Shutdown requirements.

Less Clipping, Higher Efficiency

The biggest benefit of the hybrid inverter is it reduces or eliminates clipping if the inverter is sized properly by the installer. Many installers, however, tend to undersize hybrid inverters, so be sure to check the inverter maximum capacity against your system output capacity. The other benefit of a hybrid inverter is that it has a slightly higher efficiency rating than microinverters, meaning that more of the DC power you produce on your roof is converted into more AC power.

All or Nothing

The big drawback with hybrid inverters remains that there is a higher risk of losing all of your production if the inverter goes down. The second drawback is that the standard warranty period is 12 years, but it can be extended to 25, which I highly recommend. Many installers include the extended warranty, and that should be a negotiating point for you when choosing your installer.

solaredge central inverter and enphase microinverter
Enphase vs SolarEdge

What Are the Best Solar Inverters?

There are only two inverters worth mentioning at this time, Enphase and SolarEdge. Note that LG has just developed a new microinverter that is mounted on its AC solar panels. These just rolled out in 2020, so it’s too soon to give them a rating. They are also developing a hybrid inverter to be used with their popular LG Chem battery. As soon as we have solid data, we will review them in our solar guide.

  • Enphase MicroInverters: Enphase produces the industry standard microinverter in different wattage versions. They have higher wattage micros for the premium panels. Their microinverters can be bought separately or are factory mounted on both Panasonic and Sunpower panels. See the Enphase family of microinverters.
  • SolarEdge Inverter plus Power Optimizers: The industry standard for hybrid inverters. It’s typically less expensive than microinverters. They have an integrated EV charger option, which is popular for homeowners with electric vehicles. This inverter brand is required for use with the LG Chem battery. LG is currently developing a proprietary inverter to couple with their flagship battery.

Transferring Equipment Warranties

Most panels and inverters have transferrable warranties. Some charge a fee to transfer the warranty, others are automatic as they remain with the system itself. Enphase, for example, charges $299 to transfer the warranty when you sell your home. Check with the manufacturer who holds the warranty for current practices.

Read our post about the best solar inverters here.

So that covers equipment, but the panels and inverters don’t mount themselves. Let’s move on to Cornerstone 2, your solar installer.

How To Pick The Best Solar Company

The solar guide will walk you through the key points of how to pick the best solar installer. The contractor you choose must meet the minimum requirements of the State Licensing Board: Licensed, Insured & Bonded, with no negative marks on their record, and offering the minimum required warranties. Special industry designations and good reviews are great, but often they are just puffery. Careful investigation is smart; don’t just base a purchase on a Yelp review or rating, as many companies give incentives for those reviews. Similarly, professional certifications are paid for and don’t guarantee a great installation. Finally, don’t trust what a salesman says, always verify.

What Should I Look For in Reviews?

Five-star Yelp reviews may be great for picking a restaurant, but you need more than anecdotal stories for picking a solar contractor. Important to know is: How long have they been in business? Is their work aesthetically pleasing? View some of their installs near you. If you are reading review sites, search specifically for negative reviews and see how they respond to issues. This is one of the most important factors, because if something goes wrong, how a contractor handles the situation speaks to their customer service style. One of the most common complaints in solar is the lack of communication, especially when problems arise, so look for red flags in the negative reviews on Yelp, Angie’s List, and BBB websites. Take positive reviews lightly. Always check them on the Contractors State Licensing Board.

speed vs quality with magnifying glass represents to look for quality over speed
Pro Tip: Speed is not always a good thing…Quality is

Do I want the Fastest Installer?

Don’t be jazzed by promises of quick installations either. Always pick a careful installation process over a race to the finish line. You’re going to live with this installation for 25+ years, and you want it to be installed in 4-6 weeks? It makes zero sense, as every step of the process will be rushed rather than completed carefully. Diligence throughout the process is key.

Fast Never Equals Better

The concept of a super-fast install was introduced by a well known national solar company that never turned a profit and lost millions of dollars every quarter. Their work is shoddy, and their customers are disappointed. Ironically, many small installers adopted this “selling point” of a 4-6 week installation to compete with bigger installation companies. The practice puts both the homeowner and installer at risk of problems due to rushing installations. Don’t fall for this pitch.

Solar Conduit Is An Important Factor When Choosing A Contractor

A bad solar installation on a roof with rail showing and metal conduit
Don’t Ruin Your Home With An Ugly Installation

Building on that, one of the differentiating factors of a quality installer is how the conduit is run on their installations. The highest quality installers offer to run the conduit through the attic when an attic is available. When the conduit is run on the exterior, they meticulously run the exposed conduit to minimize its visibility. They use black rails and keep the panels very low profile. This is why you need to drive by installations or review pictures of contractors’ work. Sloppy conduit runs are easily spotted. I have fielded many calls from husbands whose wives are in tears or furious over the look of their installation. It’s your home, be sure it’s not ruined by a sloppy installation. Start noticing solar installs everywhere you go and you will get picky.

Be Home for Your Site Evaluation

Great installers perform excellent site evaluations after you sign the contract, and this will reveal possible roofing or electrical issues. Always make arrangements to be home during the survey, and don’t choose a company that does a remote or satellite image-based survey. A solid survey sets your project up for success, with no surprises at installation.

Solar crew Installing solar photovoltaic panel system on roof of house
Pro Tip: Ask if they use subcontractors

Subcontractors Are Common

A quick word about subcontractors: They are prevalent in the industry now, and not just for roofing and electrical, but for solar installations themselves. The takeaway here is that subcontractors are not easily controlled through the contractor, and projects or services can be delayed because the process is not in your contractor’s hands. In-house is usually better, but that doesn’t mean a subcontracted crew can’t be excellent. Once again, look at photos of installations. Always be sure that subcontractors are properly licensed.

Trend: Solar Brokers VS Solar Installers

Female customer looking at her computer is upset and on the phone trying to reach customer service
Pro Tip: Ask if they’re a solar broker or installer

The solar industry has broken into two distinct camps: Sales brokers, and Installers. Installers who only do installations and don’t have a sales force are called EPC: Engineering, Procurement, and Construction. Fewer companies offer both sales and installations under one umbrella. It’s critical to know if you’re dealing with a broker, who is an independent contractor vs. an actual employee of the contractor. A broker may promise you things, but once he hands off the job to the installer, he is no longer in the picture. Ask the question directly: Are you a broker? Always check the name of the company on the contract against the name of the company that the salesman represents. They could be two different entities.

Do All Contractors Offer All Loans?

No, they don’t offer all the same financing options. Contractors offer many different financing options from each other. While most have similar options, some offer only one or two programs. Keep this in mind when comparing quotes unless you’re paying cash. Financial considerations are critical to your solar investment. Let’s take a look at the possible benefits and concerns with financing, tax credits, leases, and net metering.

House made of money with a roof made of solar to represent solar saves money on home energy
Cornerstone 3: Solar Financials

Solar Guide To Financing: The ATM On Your Roof

A sound solar investment is like having a money machine on your roof. Understanding the financials of solar will deliver a solid return on investment that produces value for years to come. The key factors in the solar financial picture are:

  • Price: What will my solar cost?
  • Financing: Pay Cash or Get a Solar Loan?
  • The Federal Tax Credit: Can I take it? When Does A Lease Or PPA Make Sense?
  • Utility: Electric Rates & Net Metering

How Much Do Solar Panels Cost?

The price of a complete solar system takes more into account than just the cost of the solar panel. The panel, the inverter, the method of installation, and the financing can all affect the overall price of the system.

Solar Formulas To Know: How to Calculate System Size, Solar Price, System Price, and Net System Price
Solar Pricing Formulas

Price Per Watt: Solar Pricing Guide

Solar is priced by the watt the way that meat is priced by the pound.

Premium panels are like premium cuts of meat; you pay more for filet mignon, and you’ll pay more for a premium solar panel. If you have quotes for the same panels from two installers, and one is much cheaper, then other factors have come into play. Typically it’s the inverter, the installation methods, or different financing packages that may account for this.

Know the key factors of a solar quote so you can compare apples to apples. Don’t just compare pricing and panels, know exactly what’s included upfront so you avoid disappointment after it’s installed. Salesmen will play up their quote’s strong point (such as lowest price) and downplay the weakness (conduit run on the roof instead of in the attic).

Long Term Cost Control

Control your energy cost image of Golden Metallic Cog Gears interlocking
Control Your Long Term Energy Cost By Going Solar

Price, however, should not be confused with value. One panel may cost more upfront but produce more power over time due to minimal degradation.

Pricing: Short Term vs. Long Term

Pricing in solar seems straight forward, but just because you save a few thousand dollars upfront doesn’t mean you made a wise investment. It’s like buying a cheaper car that will cost you more to maintain in the long run. An installer who cuts corners in a race to the pricing bottom is at risk of going out of business for multiple reasons: First, because of shoddy installation practices, they fold under the pressure of an overload of service issues that can’t be handled effectively; and second due to the lack of financial stability from thin margins. Check the bankability of your warranty holders! Most importantly, your system may be down for extended periods due to poor installation practices and cutting corners.

Graphic saying Value Vs Cost with Value box checked
How much power your system produces over 25 years is it’s value

What Should I Pay for My Solar?

The range of pricing varies from more than $5/watt to under $3/watt. The price has little to do with equipment (except for Sunpower), and much more to do with installation methods, financing, and service. The best way to know what people are paying for solar in your zip code is by visiting the California Distributed Generation Statistics website. This is a goldmine of solar information.

Go to the California Distributed Generation Stats site and enter your county to get the average price per watt. The results will give you your county’s average price per watt. The systems priced under $3 are cutting corners somewhere, and that comes directly from the California Public Utilities Commission and CSLB.

The California Solar Consumer Protection Guide

The California Solar Consumer Protection Guide, which you must read and sign before entering into a solar contract in California, has a warning: “Note that the best option for you is not necessarily the cheapest bid. A very low bid may indicate that a Solar Provider is trying to cut corners.”

Cover of the California Solar Consumer Protection Guide
The California Solar Consumer Protection Guide

The Solar Protection Guide was created to help protect consumers from bad contractors and also to educate the public about best practices. You can read it here. It’s filled with information that the California Public Utility Commissioned wants homeowners to know before getting solar.

Cash: Is it better than Financing?

The Ultimate Guide To Solar Financing

Cash, of course, is king, and you usually get the best pricing when paying cash. The return on investment varies but is 5-8 years on average depending on how high your utility bill is. Solar loans, however, have become extremely attractive with zero down options. The return on investment is incalculable when you put no money down and the payment is less than or equal to your current utility cost. In essence, you’re replacing a recurring bill with an asset. Plus your electric bill adds no value to your home, while the solar system increases your home’s value.

Financing: Rates and Terms + Fees

There are many financing options available for solar these days, with varying rates, terms, and fees. The lowest interest rates have buy-down fees, and the fees vary by lender. Credit union solar loans tend to have the lowest fees, and solar-specific lenders usually have the highest fees. Most of the fees are also subject to the 26% tax credit, and that helps reduce the cost of buying down interest rates, which makes them attractive over time.

Bank for solar loans
There are many financing options for solar

Signature Loans

Most solar loans are signature loans, with no lien on the house except for a UCC filing, which is a lien against the solar equipment on the home. It grants the lender the right to remove the solar if the loan goes unpaid. The interest on these loans is not tax-deductible. Terms vary from 8-20 years in most cases, with rates from 2.99% to 7.99% or higher for less qualified buyers. The majority of these loans are only available through your solar contractor.

Re-amortization for the Tax Credit

Almost all solar loans are designed with the tax credit in mind, and this is handled in two different ways. Combo loans start with the assumption that you will roll your tax credit into the loan within 12-18 months. The principal balance starts with the net price of the solar (Cost minus tax credit) and they start with a low payment because of that. If you send in the tax credit in the allotted time, then your monthly payment remains low. If not, no problem or penalty, but your payment is adjusted upwards for the bigger balance owed. After the re-amortization period ends, any additional principal paid reduces the term remaining on the loan, just like a mortgage.

Person holding several hundred dollar bills
Pro Tip: If you plan to pay it off early, don’t buy down the rate

Get Lower Fees Without the Combo

The other type of loan is very similar to a combo loan, but without the lower monthly payment for the first 12-18 months. In other words, the loan payment is based on the entire solar amount, not the amount minus the tax credit. Fees and interest rates tend to be lower on these loans because they aren’t giving you advanced credit for the tax payment. If you do send in your tax credit or part of it during the allotted period, your loan will adjust downwards. If you keep the tax credit, the loan stays the same. These loans have lower fees than the combo loans do, usually.

Solar Loan Terms and Rates

The most popular option is the 12 year, 2.99% loan, chosen by borrowers for its short term and low rate. It typically has the highest dealer fees but costs less in the long run than no-fee loans as long as you don’t pay off the loan early. Generally speaking, if you plan to pay down your solar loan, don’t pay fees for a low-interest rate loan. Paying fees for the lower rate only makes sense if you ride the loan out to term.

Couple signing loan docs for solar sitting on a couch smiling
Pro Tip: Read about PACE in the Solar Consumer Protection Guide

For cash flow, the 20 year, 5.99% loan is very popular as it replaces the utility bill with a much lower monthly payment. Over time you will pay more interest, but still are buying an asset rather than sending your money to the utility company endlessly. Plus the payment is fixed, there are no rate hikes.

Assessment Loans: Tax Lien Loans (PACE)

Another type of loan is PACE financing, which is a tax lien on your property, that is due with your property taxes. Interest is tax-deductible in most cases, and you don’t need good credit to qualify, but you do need at least 10% equity in your home, and income to pay for the loan. A popular benefit of this loan is that it doesn’t appear on your credit report or hurt your debt to income ratio. Often the first payment is delayed for several months because it’s not due until the new tax bills are sent in November. So if you sign for the solar in July, because the tax rolls close in June for the following year, you won’t owe a payment for well over a year.

PACE: Proceed with Caution

The downside to PACE loans are well documented, and many safeguards have been put into place to protect borrowers. Because it is secured with your home, you run the risk of losing your home if you don’t pay the tax lien. There are also administrative fees included in your payments. Also, PACE is not available in all communities. If you plan to refinance, a PACE loan could slow down the process. It is, however, a great option for those with poor credit, or high debt to income, or just don’t want the loan attached to them but rather to the home since that’s what the solar is physically attached to.

The Guide To The Solar Tax Credit

Carrying a red ball with taxes written on it. Carrying a heavy burden.
Pro Tip: Consult your accountant first

One of the biggest perks of buying solar is that you will get a tax credit equal to 26% of the cost of going solar in 2020. In 2021, the residential solar tax credit will be 22%, and then it will end in 2022 unless legislation changes. The tax credit is a dollar for dollar reduction in taxes owed, but you must owe taxes to receive it. If you have little or no taxable income, you won’t get the tax credit back from the IRS and should consider a lease or Power Purchase Agreement to cut your utility costs.

However, if Federal taxes are withheld from your paycheck, and you only get a portion of it back, expect a refund after going solar. If you usually write a check to the IRS, the tax credit serves as a payment. The unused portion of the credit can be rolled over year after year until it’s used up. The Solar Guide suggests that you consult with your accountant on tax matters.

But I Always Get A Refund

People often think that if they got a refund then they didn’t pay taxes, but that’s not necessarily true. Check the total amount of Federal taxes withheld for the year against your refund, and the difference is how much taxes you owed and paid. This is the amount that can come back to you with a solar tax credit. If you truly owed little or no taxes, then consider a lease or PPA.

The Solar Guide To Leases and Power Purchase Agreements

If you can’t take the tax credit, or don’t want the hassle of getting a loan, filing for the tax credit, and maintaining your system, then consider a solar lease and PPA. A good solar lease or PPA should save you 25% or more on your utility bill, and as rates rise, you will save even more. Many installers don’t have access to leases, so they won’t tell you the benefits of a solar lease. It is a mistake to assume that everyone can take the Federal Tax Credit for solar. Here’s what you need to know about solar leases and PPA’s.

Lease Agreement Contract Document and Pencil Bottom Left Corner on Wood Table. Lease document for solar panel installation
Pro Tip: Get a fixed rate if you don’t plan on moving

Fixed Rate vs. Escalating Rate

Solar leases and PPA’s may adjust upwards annually. If you plan to be in the home for the long haul, opt for the fixed payment option that freezes your payment for 20-25 years. You pay a little more upfront, but in the long run, you will save significantly more. The leasing company, such as Sunpower, Sunrun, or Vivint, installs it, insures it, maintains it, and monitors it. They also guarantee the solar’s performance and will pay you a dividend if it underperforms.

Solid Design & Guarantees

A benefit of third party ownership is that the system design and installation are scrutinized by the lease company. These typically are big, stable solar companies, so there’s less concern about your contractor going out of business something fails. You can be sure the production will match your contract, or you will be paid for any shortfall.

The Least Expensive Solar: Pre-Paid Lease

One of the lesser-known leasing options is the pre-paid lease. This is the cheapest way to buy solar because you are given the tax credit discount upfront from the leasing company. Plus you never have to worry about maintaining the system or filing for the tax credit.

End of Lease: What’s Next?

House with solar panels on the roof for sale
Get a realtor who understands the value of solar

Typically the leasing company gives you the option to renew for a short term, or to purchase at a price determined by an appraiser. You can also ask them to remove the system, and if you do, they might offer the system to you for a minimal cost. They must restore your roof to pre-solar conditions, and most won’t want to do that.

What Happens if I Sell My Home?

Both loans and leases have gotten better when it comes to transferring property. Because there is a UCC filing for signature loans as well as PPA’s and leases, and a tax lien for PACE loans, the escrow process will handle payoffs or transfers. For most leases, selling the home triggers a purchase option, and your home’s buyer can add it to their mortgage, or they can take over the lease/PPA. This usually involves qualifying for it, which is a very simple process

The Guide To Solar Net Energy Metering

The value of solar is directly tied to Net Energy Metering (NEM). With net metering, SCE, SDGE, & PGE credit you for the power you send to the grid, but the amount you get depends on when you send it. Each utility charges different rates, but as required by the California Public Utility Commission, anyone who goes solar now must be on a Time of Use rate plan. (If your utility is SCE, SDGE, or PGE) Rates change frequently and have led to the popularity of the battery back up. Batteries offer protection against rate changes that affect solar payback, plus give you emergency power in an outage.

Woman contemplating Time of Use utility rates and energy savings
Time Of Use Rates are required when you go solar in California

How Does Net Metering Work?

When you create power, it flows into your service panel and feeds your home’s power needs first. After that, any excess power flows into the utility grid. Your utility company credits your account for that power. When you pull power from the grid, your accumulated credits offset that usage. Without this credit and debit system, solar wouldn’t function well unless you have a storage system like a battery. The utility grid is your virtual storage or back up system in net metering. After 12 months, you receive a “True-Up” bill, with either a credit or an amount due for your energy usage. It’s like a solar bank account.

True Up Period

Solar billing is a 12-month cycle. If your usage didn’t go up, then you’ll have a credit or a small bill when the True-Up period ends, as long as your solar was designed correctly.

Only SCE allows you to roll the credits earned over to the next period after the 12-month cycle ends. PGE and SDGE send you a check for the power at wholesale rates, which is about .3 per kWh. This is incredibly low considering how much they charge you at peak hours (.40+ per kWh). Never oversize your solar unless you plan to increase your usage. You may be able to upsize your solar system, but you can never downsize it.

Time of Use Rates

A clockface on a dollar bill to represent Time of Use power rates
Pro Tip: Get a smart thermostat to avoid peak rates

On-Peak rates are higher for power used during high demand periods. On-Peak time is in the afternoon, and off-peak is night, mornings, and weekends. Because of that, timing your power usage is critical to saving the most money. Smart thermostats and battery storage help ensure the value of your solar investment in the ever-changing landscape of utility rates. EV rates are the lowest but you must qualify by proving you own an EV.

Municipal Power

If your city is also your utility company, then your rates are much cheaper than the big three. The return on your solar investment may take a few more years. Some municipalities have solar rebates; some pay you energy credits on top of the retail power rates when you send power back to the grid. They tend to restrict your solar system’s size to produce no more than 100% of the past 12 months’ usage. You may not even have a smart meter installed yet, but once you go solar, your city will install it.

SCE Solar True Up electric bill
Pro Tip: SCE may take months to switch your account

Understanding Your NEM Bill

Time of Use and Net Metering doesn’t simplify your utility bill. The big three utility companies know that NEM bills are even harder to comprehend than the standard utility bill. They all have guides to help you understand your bill better. Click your utility provider below to see how your Net Metering bill will look and how to read it.

One important note is that Edison has been running months behind in transferring accounts over to Net Metered billing; In some cases, over 8 months. If you call their Net Metering department, they will freeze your energy charges if this happens to you. If you received Permission to Operate, and your bills haven’t changed, call them immediately.

Guide To Solar Design For Your Home

The unifying piece of your solar project is your home, the final cornerstone in our solar guide. Solar power is not a cookie-cutter project. The more customized it is to your home and your family’s power usage, the better the solar ROI will be. The Solar Guide has outlined the factors affecting your system design.

Elements Affecting of Your Solar Design

Couple Standing In Front Of Their House with solar panels on the roof, admiring their new solar
Pro Tip: If needed, re-roof now to get the solar tax credit

When designing a solar power system for your home, know that the solar design is affected by the following elements:

  • The Roof And Its Condition
  • The Electrical Service Panel
  • Your Power Usage and Utility Company
  • HOA & City Regulations

Importance Of The Roof

The roof is the most critical factor for solar power to work well for you. The most basic consideration is the condition of your roof and what type of roof it is. The solar will be on your roof for a long time. It must be in good condition without leaks, worn-out shingles or broken tiles, worn-out underlayment, or rotted wood.

The Best Time to Re-Roof is Now

Your solar contractor should give your roof a thorough inspection during the initial site evaluation. No one wants any surprises on the day of installation. If you need to reroof to go solar, then the roof may qualify for the solar tax credit. It’s a good idea to get needed roof work and solar at the same time because of the tax credit. The Solar Guide suggests asking your contractor for photos of your roof that are taken during the site survey.

Bird's Eye View of rooftop solar panels on a home with a tile roof
Pro Tip: Know Thy Roof

Comp Shingle vs. Tile Roofs

Composition shingle roofs are typically the easiest for solar to be mounted on. If you have tile, it will depend on the type of tile you have. There’s a lightweight tile that shatters easily when walked on. Many solar contractors will require shingles installed in the solar area, or have you pay to replace the broken tile.

If your home has clay tile, you will need to comp out the solar area with an inset. Wood shake roofs can’t have solar mounted on them, in most cities. Flat roofs may need to have a tilt package installed to angle the panels up. Specialty roofs can be done, but they cost a bit more.

What about a Ground Mount?

A ground mounted solar system pointing south for maximum solar production
Ground Mounted Systems are easy to clean

Homeowners with land often choose a ground-mounted system. They cost more due to trenching and special racking plus cement piers. They gain more control over their solar design, however, as they aren’t limited by their roof. Because of that, their systems can be optimized to produce more. The main reason for increased production is they can point it south at the sun.

Permits take longer in most jurisdictions for ground mounts, and the installations take longer. Multiple inspections are required. Another popular option is putting panels on a patio or carport. Building a structure like a carport just for the solar extends the time to recoup the investment.

Orientation (Azimuth)

A weather vain on top of a roof with North South East West letters and a cock
Pro Tip: South facing roofs are best for solar production

The direction that solar panels face determines how much power they will produce. To a lesser degree, the degree of tilt to your roof also affects solar production. South-facing panels produce the most power and north-facing arrays produce the least. East and West roofs produce less than South. However, with Time of Use rates, there is a benefit to west roofs as they offset peak afternoon rates.


Most roofs in California have a 20-degree pitch or close to it, which is ideal. Extremely steep roofs will produce less power; panels on flat roofs are usually tilted up at 10-15 degrees to catch more sun. If you have a very steep roof (30-degree pitch or more), many solar companies will charge extra for the installation. Flat roofs are most at risk for leaking; if you have one, be sure to hire a solar company that has experience with roofing.

Roof Size Matters

One of the most important factors is the size of your roof, or better put, the area available for solar. Chimneys, vents, AC units, and fire code setbacks limit how many panels can be mounted on it. Some people don’t want panels on the front of their homes yet that might be the best area for solar. For limited roof space, solar panel efficiency matters the most.

Shading Ruins Solar Production

Trees casting shade and shadows across solar panels, decreasing the production and power.
Pro Tip: Scrutinize proposed designs for shading issues

Shading is the enemy of solar. It can be caused by trees, chimneys, vents, dormers, roof-mounted fans, and AC units among other things. Shade moves during the day and also changes over the seasons. Get to know the shading on your roof because it’s one of the most common problems of solar, reducing production. Not every contractor is diligent about shading studies. A small vent casting a shadow can take out 10% or more of a panel’s production. Keep this in mind when looking at rooftop layouts.

Your monitoring system will present clear evidence of shading. You may think a panel is not performing properly when its production is outpaced by the other solar panels. Shading may not be evident all day long, and there only has to be brief shading to affect performance dramatically.

Your Main Service Panel: Is It Good For Going Solar?

A main electrical service panel connected to a central inverter with solar warning labels
Insist on a C-10 to do your service upgrade

Your solar connects to your electrical main service panel in most cases. A 200 amp service can support most solar systems, while 100 amp service usually can’t. Some panels are filled to the max, and a subpanel will be needed. Your contractor may suggest upgrading your service panel, derating it, or using a meter adapter provided by your utility company. Only in rare cases does the electrical service create an issue for installing solar. An example would be when there’s a high cost of upgrading such as required trenching. Typically, a standard service upgrade costs around $2500. The best time to upgrade old and outdated electrical panels is when you go solar since you get the tax credit. Your upgrade should be performed by a C-10, so verify the license of the contractor.

Annual Power Usage

Using renewable energy sources like solar and LED lights can help save money on electric bills
Pro Tip: Get 12 months of usage, don’t just estimate

It’s important to have 12 months of usage to properly design your solar. If the past 12 months varied from your typical usage, then go back 2-3 years and get the average. You want to size your solar to offset 110-120% of your electricity usage. If you plan to buy an electric vehicle or add other loads, plan on increasing the size more. If you foresee a drop in usage, size the system down accordingly. Getting the right size is important to make a wise investment.

How to Get My Usage

The best way to get your last 12 months’ usage is directly from your utility company. If you keep paper bills, great. If not, call them and ask for your last 12 months of usage. Write it down, month by month. Add up the 12 months, and this is your annual usage. Multiply that by 120%; this would be the size you should aim for unless you plan to increase your power usage. You should aim for at least 110% of your annual usage. If you have municipal power, then you must not exceed 100%.

Will It Offset My Bill?

Every solar sales proposal should have a system production showing the total kilowatt-hours your system will produce. Keep in mind that the accuracy of this projected production of energy is dependent on the quality of the input. While many solar salespeople are trained to create proposals properly, but many don’t know how to create an accurate one. They may not account for shading or put more panels on the favorable roofs than can fit there. This is the benefit of having a few proposals to compare, so you can compare the layouts and production.

A low profile solar array of ten all black panels installed without any visible conduit.
Low Profile, No Conduit Installation

What Affects My Solar Layout?

Solar design is affected by solar fundamentals plus fire code and HOA limitations, if applicable. Fire setbacks are pathways that firemen use to access the home via the roof, and usually are 3 feet from the ridge and other edges of the roof. Requirements vary by city and HOA. Your solar sales proposals should reflect these setbacks, and not fill your entire roof plane. There are a few exceptions, such as covering the roof of a free-standing garage or shop.

Your Home on Satellite Imagery

Take a look at your home on google maps satellite imagery. The roof planes that point South, East, or West are better choices than planes that face north. Does your roof have multifaceted planes, or is it just a few roof planes? Do you have tall trees or chimneys? The fewer arrays the better, and the less shading the better. Get to know your roof and its strengths and weaknesses. Panels in rectangles look the best aesthetically, but due to vents or other design constraints, may not be achievable. City fire setbacks will also affect how much solar can fit on your best roof planes.

What You Need To Know Before Getting Solar Proposals

You’re ready to sit down with a Solar Professional and see some proposals and prices. Follow the tips and ask the questions outlined below by The Solar Guide. Proposals should reduce or eliminate your monthly power bill, and increase the value of your home with a quality installation. Ask friends and neighbors who had solar installed if they recommend their Solar Provider and why. Check review sites and the BBB, and pick the top quality installers to avoid installation disasters.

Young couple picking the best solar financing and solar system for their home
Pro Tip: Use a worksheet to compare quotes

The Solar Guide’s Tips For Getting Solar Quotes

  • Look for Solar Contractors with many years of experience
  • Choose authorized dealers for enhanced warranties
  • Check reviews and view installed systems for aesthetics
  • Go with a local company (30-50 mile radius) who knows your city’s rules and codes, and for quick service calls
  • Get quotes from 3 contractors. Make sure you’re comparing apples to apples by closely reading proposals and contracts
  • The upfront price is not the only consideration. Solar is a long term investment. Be sure you are covered with solid warranties, and that the system will produce more over time.
  • Beware of radically lower bids compared others
  • Check CaliforniaDGStats for the average installation cost in your zipcode
  • Contracts are legally binding and should be read carefully. Make sure you understand what you are receiving from the solar company and how much you are paying.
  • Don’t be pressured into making a quick decision based on an incentive that is ending

Important Questions To Ask

The Solar Guide suggests asking the following questions before going solar with a contractor or solar company:

Happy solar installer on a ladder installing solar on your roof
Pro Tip: Make a point to view their installations
  1. How long have you been in business? (At least 3 years or more)
  2. Are you NABCEP Certified? (It’s like being a board-certified surgeon, and is a voluntary certification) See the brochure.
  3. Are you licensed and insured? (Ask for proof, check CSLB)
  4. Do you subcontract any part of your installation, and if so, to whom? (Many solar companies use subcontractors for roofing, electrical upgrades, and even solar installation. Be sure they are properly licensed)
  5. Do you offer enhanced warranties? (Get warranties in writing)
  6. Can I review your contract before signing?
  7. What is the payment schedule?
  8. Is the production from my solar system guaranteed in writing? If so, for how long?
  9. What is included as a base package versus an “adder”

The Steps of Solar Installation

Solar panel installer with tools installing solar panels on roof on a sunny day

Here are the basic steps in a solar installation:

  1. Site Evaluation: Be home for this; grant access to the attic; be sure shading is measured and roof condition is checked.
  2. Design and Engineering: You should be asked to approve the final design. Once approved, submit to your HOA.
  3. Permitting: Solar plans are submitted to your city/county for permitting, which can take 1 day to more than a month. Revisions also require additional time.
  4. Installation: Once your permit is issued, your installation is scheduled. Be home for this, especially before they begin. Speak to the lead installer about any concerns and requirements you may have. Most installations are done in 1-2 days.
  5. Inspection: Once the installation is complete, an inspection is scheduled based on the city’s availability. It’s best to be home in case the inspector needs access to the garage or home.
  6. Interconnection/Permission to Operate: Once Final Inspection is passed, your interconnection docs are submitted to your utility company. In most cases, you will receive Permission to Operate in 3-5 business days.

Solar Monitoring

Solar Monitoring apps: Enphase Monitoring vs SolarEdge Monitoring, solar mobile app, tablet, and desktop solar monitoring across devices
Pro Tip: Ask for consumption monitoring

You will receive a monitoring login soon after installation. Your system monitoring shows the production of your solar and may show it on a panel by panel level. Keep an eye on it weekly, just to be sure everything is up and running. Installers aren’t always following their fleet daily. Since it’s your investment, you have the biggest interest in it.

What’s Consumption Monitoring?

Consumption monitoring shows your power usage. It is not always included in solar monitoring because not all electrical panels can accommodate it. With consumption monitoring, you don’t have to do the math between your solar monitoring and your utility bill.

The Big Picture Includes Your Consumption

Neither your net-metered bill nor your solar monitoring has the big picture of your energy profile unless the monitoring includes your consumption. Most people are confused that their utility bill does not match their solar production monitoring reports. This is because the utility company never sees all of your solar production, only the excess that flows into the grid. Conversely, your solar production monitoring does not show how much power you pulled from the grid. This is why adding consumption to your solar monitoring provides you with the big picture. Most homeowners are disappointed that they can’t track their net usage once their monitoring is set up. Ask your salesman to add it to your quote.

Adding More Solar To My System

Now that you’ve gone solar, what’s next? Most people increase their power usage significantly as they aren’t afraid of the thermostat anymore. If you add more solar, you can get a tax credit as long as it’s bigger than 1 kW. Many people are buying electric cars, and they’ll need to add 8-10 additional panels for extra power usage. There are EV rates that are beneficial for this.

Older couple in their back yard smiling and holding up $500 referral fee
Pro Tip: Show low electric bills to your neighbors

Referrals Pay More Dividends

If you love your solar, and the process was painless, ask your salesperson if they have a referral program. Most companies do, and they typically pay about $500 per referral sale. If you’ve had a miserable experience, spread the word and consider placing reviews to help others steer clear. Bad reviews will draw the attention of your installer and may give you the attention needed to address the issues.

We surveyed referral fees, and they range from $250 to $1,000 for the most aggressive referral driven networks. Don’t be shy to show your utility bill to anyone who owns a home. Solar makes sense for most people and spreading the word about good solar companies benefits everyone. You can keep it all or opt to split it with your referral… it’s your money.

Now You Know What You Need To Go Solar

If you haven’t installed solar on your home, you are well equipped now that you’ve read the solar guide. Don’t put it off until the tax credit dwindles to zero. Stop the never-ending rate hikes of your utility company, and gain control over the energy costs of your home. But do your homework, it will pay off in many ways. You will have a high performing system, and even earn referral fees while helping others choose the right contractor.

A young family with two children giving thumbs up and happy they went solar
Savings from solar can help finance a college education

After a home, a solar system could be one of the biggest investments a consumer makes.

Consumer Reports

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