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Run on Sun Monthly Newsletter

In this Issue:

January, 2017

Volume: 8 Issue: 1

3 Solar Company Ploys that Cost Consumers

All solar companies market themselves, Run on Sun included. But lately we've come across some particularly puzzling ploys being touted by some companies as if they were a benefit to the consumer, when all they really are is a way for the solar company to cut their costs at the consumer's expense! Let's peel back the onion layers on these three ploys to see what is really going on…

Ploy #1 - "We Can Give You A Solar Quote - No Home Visit Required!"

One of the major solar companies built its entire business model around this ploy, and a bunch of aggregator sites have popped up offering much the same thing: a quote on a solar power system without ever visiting the consumer's home. Certainly for some folks - the very busy or the very shy - this might sound appealing. You can get a quote for your system without ever having to deal with those pushy salespeople.

The advantage to the solar company should be pretty obvious - they avoid the time and expense of sending a vehicle and a salesperson to your home, thereby saving the salesperson for only those potential clients where a face-to-face meeting is required.

So how does this ploy cost consumers? The simple truth is that no one can properly install a solar system without actually coming to your home and seeing the actual conditions on the ground. While satellite images are great for making preliminary assessments, there is just too much that could affect the ultimate cost of the system that cannot be determined remotely. For example, the other day we noticed a sag in a roof while taking our measurements. Upon closer inspection it was discovered that one of the roof rafters was split and caused the roof to sag. That damaged rafter needs to be repaired or replaced before solar can be safely installed. The homeowner was completely unaware of the situation until we pointed it out to him.

When a solar company gives you a quote without having performed a comprehensive site evaluation, their quote will be hedged as "preliminary, subject to revision following engineering review." Which means that after you sign the contract, they will "discover" the issues that they should have told you about initially. But now you will have signed a contract and to move the project forward you will have to accept a change order increasing your cost. Great deal for the solar company, not so much for the consumer.

Ploy #2 - "We Will Install Your Solar System in One Day!"

This one to me is a real head scratcher - the solar company that brags that they will install solar on your home in one day! Seriously?

Solar power systems, when installed correctly, should provide you with trouble-free operation for twenty years. Given that time frame, do you as a consumer really care whether the install takes one day or four? Frankly, in ten years of doing this, we have never had a client ask if we could complete the installation in one day.

Of course, that doesn't mean that clients aren't concerned about how the installation will be done, they are. But they are interested in knowing that it will be done right, and right the first time.

This is neat work

Work this neat takes time!

The solar company promoting this ploy wants to suggest that they have this so dialed in that it will take them no time at all. But what is really happening is that they are telling their crews to throw it up on the roof and move on to the next job. That translates into lower labor costs for the solar company (i.e., more money in their pocket), but no real benefit for the consumer.

The simple truth is that craftsmanship takes time. You, the solar consumer, are going to be living with this for the next twenty years - maybe that extra day or two will actually inure to your favor!

Ploy #3 - "We Will Install Solar For Free!"

This may be the scammiest ploy of all. The solar company prominently displays that they will install solar on your home for free! And who doesn't love free, right?

Of course what this really means is that the solar company wants you to sign on to a 20+ year agreement (either a lease or a Power Purchase Agreement) to pay them every month for the privilege of having that "free" solar on your roof. The end result is that you end up paying as much as twice as much to that solar company as you would have if you had purchased the system outright - and you still won't own it even after twenty years!

And yes, I know that not everyone has the cash on hand to purchase a system outright, but there are better options than leasing. For consumers with good credit, a home equity line of credit will be way cheaper than going with a solar lease. If your credit is not so great, you could look into PACE financing which is not tied to personal credit. PACE is more expensive that a HELOC, but still a better deal than a solar lease.

Caveat Emptor

At the end of the day, all of these ploys work in the solar company's financial interests, and not the consumer's. The folks that dream up these schemes are shrewd - consumers need to be just as shrewd if they are to avoid getting fleeced!

“Frankly, in ten years of doing this, we have never had a client ask if we could complete the installation in one day…”

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Meet Sara Pavey!

It is with great excitement that we introduce to you the latest member of the Run on Sun family, Sara Pavey, our new Projects Coordinator!

We've had our eye on Sara for quite some time as she has been in the solar industry for more than five years with a variety of other solar companies. Indeed, during her tenure at one of those companies, her bosses derided her as a "teller, not a seller," because she has the audacity to take the time to fully explain things to potential solar clients! Needless to say, we are thrilled to have another "teller" on our team as we are fully committed to answering all of our clients questions before they sign on the dotted line!

Sara is a proud graduate of Cal Poly San Luis Obispo (Go Mustangs!), earning her degree in Mechanical Engineering. Sara demonstrated her technical insights at her very first Run on Sun jobsite, suggesting a clever re-routing of cables that was both more efficient and more aesthetically pleasing. We look forward to putting all of her tech skills to use—as well as her "telling" approach to sales!

Prior to joining Run on Sun, Sara honed her installation skills by volunteering with Grid Alternatives, a nationwide non-profit that "brings the benefits of solar technology to communities that would not otherwise have access, providing needed savings for families, preparing workers for jobs in the fast-growing solar industry, and helping clean our environment." (Learn more about Grid Alternatives here.)

Sara Pavey

Sara multitasking at a job site.

A native of Southern California (yes, there really are some natives here!), Sara lives in Pasadena with her husband, Kyle, and two (very) young children, Isla and Liam. When Sara is not crunching numbers or climbing on the roof, you will find her at the LA Zoo, Kidspace Children’s Museum, or a local trail. If both children are miraculously napping at the same time, she likes to paint colorful abstract paintings on any available surface, including the shower door. (Another skill for us to tap!)

Please join me in welcoming Sara to the Run on Sun family!

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When is PACE Not a Hero?

Being a full-service solar company means, in part, that from time-to-time we are asked to step in and fix a system that is no longer operational and the original installation company is long gone. Or the installer is still around, but the client was so annoyed by the sales/installation process that they don't want to have anything to do with the company anymore. We even get calls from clients who are pretty sure that their system is working, but the way the install went - excessive delays, mismatched parts, or just an overall sloppy look - has left them with an uneasy feeling, and they want a second set of eyes to come out and give them peace of mind. All in a day's work and we are happy to help.

Tear up that contract

But lately we have come across a different situation: the system is fine, but the financing is burdensome. Now we aren't talking about leases or PPA's here - we've outlined at length our views on those. No, these are credit-worthy folks who are feeling trapped by their high-interest solar PACE loan.

PACE, as you may recall, stands for Property Assessed Clean Energy, and it allows homeowners with less than stellar credit to qualify for a loan to improve the energy efficiency of their home, including by adding solar. PACE financing is not tied to the homeowner's personal credit, and the debt "runs with the land" as part of the property tax assessment (hence the name).

Lots of solar installation companies love PACE because it is easy for them to find out in advance whether the prospective client is likely to qualify - and if they have equity in the home and are up to date on their mortgage and property tax payments they almost certainly will, and for far more than the cost of a solar system. The paperwork is handled electronically, funding decisions are fast, and there are no "dealer fees" - points, really, that often are charged back to the client.

So what's not to love?

In a word, the interest rate. At a time when Home Equity Lines of Credit (HELOCs) are readily available and at interest rates often below 4%, PACE loans can be double that or more depending on the term! That means on a 10-year loan to finance a $20,000 solar system, the PACE borrower could pay as much as $6,500 more over the life of the loan. Ouch!

Let's be perfectly clear: PACE is a great program for people looking to lower their energy bills but who don't have great credit. Their annual savings from installing solar or other PACE-funded improvements will regularly exceed the cost of the loan, providing real value to them. But if you are a homeowner with great credit, you shouldn't let yourself get stuck with an unduly expensive loan, just because some solar sales guy thought PACE would make his life easier!

If that is the situation you are in, shop around. See if you can qualify for a HELOC to pay off your PACE loan - you might learn that a simple switch will greatly increase your solar savings!

“You shouldn't let yourself get stuck with an unduly expensive loan, just because some solar sales guy thought PACE would make his life easier!…”

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