Thoughts on Solar

Advocates of solar, such as the crew at Run on Sun, take it for granted that going solar is win-win for our clients, such as the folks at Chandler School.  But sometimes we forget that non-adopters have real concerns about putting solar on their roofs.  In this, our last cut on the data that we received from NREL (read our two earlier posts on who chooses Run on Sun and what generally keeps people away from solar), we wanted to address the greatest concerns that people have so that they don’t need to be scared of solar.

First off, here’s our last chart:

Let’s take these concerns one at a time.

Cost concerns

Perhaps the greatest overall concern turns on cost and its counterpart, value.

Affordability

The greatest concern expressed was over the affordability of going solar.  The good news is that solar has never been more affordable.  Back in 2007 when we were first doing installations, solar systems cost more than $8/Watt installed.  Today we are at half of that cost, and even though most rebate programs have ended, the federal tax credit is still at 30%, meaning that more and more people can now afford to go solar!

Bang for the buck

Still, some consumers are concerned about getting enough bang for their buck - they wonder if solar really provides value commensurate with its cost.  To that we reply - it depends.  It depends on the quality of the equipment that you choose and the quality of the installer who puts that equipment on your home.  But how can a consumer know if they are getting quality?  It starts by taking the time to do your research - get multiple bids so you have a basis for comparison.  Be wary of low-ball bids - prices below market are a clear sign that there will either be nasty surprises by way of change orders down the road, or that your contractor is cutting corners. 

As to the quality of the contractor doing the work, ask for references and check them.  In California, look at the Contractors State License Board website to see if there are complaints against the contractor, and see if they are certified by NABCEP, the gold-standard for quality in the solar industry.  Review sites like Yelp and Angie’s List can also help.

Taking on debt or signing a lease

Going solar is a significant financial investment and it should be treated as such.  We have written at great length about the problems with solar leases, but even a favorable loan, like a home equity line of credit, carries costs.  Ideally, savings from your lower electric bill should offset the cost of financing the system, and once the system is paid off, you will continue to derive those savings for the lifetime of the system.

When you get a proposal for going solar, it should clearly spell out what your savings will be in Year 1, and provide a reasonable projection for your payback period over time.  But be careful about proposals with overly rosy projections based on unrealistic assumptions (like energy costs going up 7% each year for 25 years), or ones that don’t disclose their assumptions at all!

Reliability & Maintenance

Another general area of concern turns on how well a solar power system will hold up over time, and what it will cost you to maintain it.

Equipment quality and reliability

In solar, like most everything else, you get what you pay for, if you’re lucky!  Every day we get emails inviting us to purchase cut-rate panels at a fraction of the price we pay for top-of-the-line panels from LG.  We delete those emails without a second thought because we have no interest in dealing with junk.  But someone is buying those panels, and they are ending up on the homes of consumers.  Again, get multiple bids and do your research.  Selecting quality products from established manufacturers is your best assurance that you will have reliable equipment that will last.  (We install LG panels and Enphase microinverters because we believe that they are the best value for our clients.)

Performing regular maintenance

We are always a bit baffled by this one, since a solar power system is largely maintenance free.  We think this concern arose because leasing companies promised to perform all maintenance needed for the system, but this is a hollow promise since there is really nothing to do!  At Run on Sun we provide a ten-year warranty on our work, and we support the manufacturer’s warranties for the parts - so if something does go wrong, it will be fixed with no hassle for our clients.

Harm to your home

The final category of concerns centers around harm to your most valuable asset, your home.  Solar, when done right, will improve that value, but that is not guaranteed.

Damaging the roof

One obvious point of concern has to do with damage to your roof.  After all, a solar array on a pitched roof is held in place by lag bolts driven into the roof rafters so that means lots of holes being put into your roof.  However, when done correctly, as shown in the photo on the right, all of those penetrations are covered by a flashing that guarantees that water cannot penetrate. 

The other issue to consider is the status of your roof - if it is nearing the end of its usable life you will want to re-roof before you put solar on it! 

Detract from curb appeal

Image from the very cool Solar Hall of Shame page by
Green Sun Energy Services, LLC. (Used w/permission)

Beauty, as they say, is in the eye of the beholder and we love seeing solar on a home.  (Although not when it is installed like the bozos did in the photo on the left!)

Still, not everyone wants to see solar panels, and many of our installations are done so as to make the installation as inconspicuous as possible.  (In the photo below the only way to see that lovely layout is to go up on the roof.)  A properly designed and installed system should look clean and neat.  We take pride in our craftsmanship and we work very hard to make our systems as visually appealing as they are economically beneficial.

Make it harder to sell

Finally, there is the concern that adding solar will make it harder to sell your home, which can be true if you have leased the system since the new owner has to assume that lease as part of the deal. We have written at length about the perils of solar leases, and  making it harder to sell your home is just one of many reasons to give them a wide berth.

But if you were smart enough to avoid a lease, the latest research indicates that having a solar power system installed increases the value of your home.  How much?  Roughly $4.00/Watt for a typical installation - which pretty much means that the cost of the system is offset by the increase in resale value!  Try doing that with granite countertops!

Fear Not!

Consumers need not be scared of solar, provided that they choose a reputable installer and pay for quality equipment.  At Run on Sun we specialize in both, so give us a call today!

Almost a year ago, Run on Sun agreed to participate in a study sponsored by the National Renewable Energy Laboratory (NREL) - the premier lab looking into all aspects of renewables generally, including solar.  The study, known as SEEDS - Solar Energy Evolution and Diffusion Studies - is a Department of Energy-funded, industry-wide effort to “identify the drivers and barriers to the adoption of residential solar power."  To achieve their goal, the research team, led by Principal Investigator Benjamin Sigrin, asked residential solar installation companies to provide them with lists of both clients who went forward, and contact information for people who, for whatever reason, did not. 

We now have some results and they are fascinating. (One caveat - we do not know from the report provided to us the sample size for the industry as a whole or even the number of our clients who responded.  If we get that data we will update this post.)

In this first of two parts we will look at what the data has to say about those consumers who chose to become Run on Sun clients.  In Part Two we will see what the data says about “those who got away.”

Pain Point

There can be lots of reasons for choosing to go solar, but for almost everyone the high cost of energy is a major driver - especially during the summer.  So one of the interesting charts that we are able to share with you shows just how high that cost is for most of our clients:

(In all of these charts, the red bars represent the results from Run on Sun clients, while the grey bars are the overall averages for the survey as a whole.)

The largest segment of our clients are spending in the $100-200/month range during the summer, with a median of $235, compared to the national average of $183.50.  (If your bills are lower than $100/month, a solar system will take a long time to pay-off economically.)  But another 50% or so are seeing bills well above that, with some over $800/month!  Ouch!  If your bills are anywhere near that high, you need solar NOW!

Run on Sun’s Clients are Younger (better looking, too!) than the Norm

While support for solar is overwhelming among Millennials, very few of them own homes where they could be installing solar.  So what is the age of most solar adopters?

Not surprisingly, the bands between 45 and 65 are the most heavily populated, with the median age of Run on Sun clients coming in at 55 - just slightly younger than the overall median age of 58.  While the survey didn’t evaluate attractiveness, we are quite confident that not only are they younger, but Run on Sun clients are way better looking, too!

Income

Run on Sun’s clients tend to be more affluent than most…

Part of that is no doubt due to where we operate - Pasadena and the surrounding cities tend to be more affluent than many other parts of the country. Another factor would be that since we have been in business now for 10 years, some of our earlier clients were purchasing systems when the installed price was twice what it is today, thus requiring a greater household income! 

Going forward, as growing numbers of people with more modest means realize how much solar costs have declined - and how high their energy bills are going - we would expect to see more participation on the lower end of the economic scale.

A final point regarding the rest of the market.  Much of the industry is built around leasing - which we don’t do for a host of reasons - and that has historically been viewed as the way for people with lower household incomes to get into solar.  But today, with PACE financing and solar-specific loans (as well as the return of home equity lines of credit) becoming more broadly available, we will be able to help folks with lower incomes get into solar without getting stuck with a lousy lease.

Politics

We have argued in this blog that you don’t have to be a liberal to go solar, such as here, here, and here - but what do the data show?

Ok, didn’t see that coming!  Again, part of this might be where we do business as the Pasadena area is pretty progressive these days.  That being said, we welcome prospective clients of all political persuasions!  Really!

You don’t have to be Smart to Go Solar - but maybe it helps!

We know that going solar is a bright idea but does it follow that the smarter you are the more likely you are to do so?

This is my favorite graph of the bunch! 

While the overall market is centered around folks with a bachelor’s degree, the majority of Run on Sun’s clients have professional degrees (e.g., lawyers) or Ph.D.’s!  As a recovering lawyer myself I find this result gratifying.  Part of the motivation for founding Run on Sun arose from when I was looking to have solar installed at my own home and was dismayed by the lack of knowledge from the people who were trying to sell me a system.  I figured then that there would be a niche for a company that could answer a potential client’s questions in a sophisticated fashion that wasn’t tied to a sales script.  Ten years later and it looks like we have filled that niche!

Looking Closely

Given all that education, it should come as no surprise that our clients really do their homework before deciding to go solar…

This is a very telling chart, both as to Run on Sun and to the overall industry.  The majority of our clients have spoken to at least 3 companies before deciding (something we always advise them to do), with more than 20% contacting 5 or more!  That is a lot of research!  Which suggests to us that the more research you do - the more likely you are to choose Run on Sun!

But it is a bit startling to realize that over 40% of the general market only speaks to one company.  We suspect that means that some pushy salesperson shows up at the door and they don’t leave until the hapless homeowner has signed on the dotted line - most likely to some no-money-down, lousy lease! 

In contrast, we don’t do business that way, which is why none of our clients come from that segment.  That probably means we are leaving money on the table, but we like the fact that our clients know exactly what they are doing when they choose Run on Sun!

Happy Together

Of course the most important question you could ask of folks who have gone solar is: Would you recommend going solar to your friends, and beyond that would you recommend the company that you chose.  So how did we do?

* The net promoter score measures the percentage of respondents that were considered promoters (responses greater than or equal to 8) minus the percentage that were considered detractors (responses less than or equal to 7). The net promoter score is useful for assessing market performance compared to other installers.

On that first question we did amazingly well!  Over 92% of our clients would recommend going solar to their friends and neighbors as compared to just 63% for the market overall. 

But what about Run on Sun specifically?

That result is also terrific with 85% of our clients saying that they would recommend us, compared to just 52% of the overall market.  That being said, we constantly strive to improve, and we would really like to get that “would recommend score” up to 100%!  (And the industry as a whole needs to do quite a bit better at meeting expectations.)

So that is what we know about our clients who responded to the survey.  In Part Two we will take a look at those that got away.  Watch this space!

I like to think there are many ways in which Run on Sun stands out in the ever growing sea of solar contractors. But there is one particular feature which every client seems to comment on - our non-sales approach. I can’t count the number of times I have sat down at a kitchen table to discuss how solar works and whether it makes sense for that home, to hear remarks on how different the experience is compared to other solar pitches they’ve heard. The thing is, when someone from Run on Sun comes to your home to do a solar assessment, that person is not a sales person. We don’t have outside sales agents and we definitely don’t employ any “hard sell” tactics. As a small company, every employee is a solar professional who has taken the time to educate themselves on the intricacies of the industry. And perhaps more importantly, every Run on Sun employee truly takes pride in helping people go solar, for the right reasons.

Explaining more than selling

Some people might argue over what exactly are “the right reasons". The bottom line is this: we believe solar is an amazing solution to many problems the world faces today. From reducing the carbon emissions and water use over traditional power sources, and increasing the number of jobs with a living wage that cannot be outsourced, to providing property owners with huge savings over time — going solar is a great thing to do. But we can only accomplish growing this great solution if we do it ethically. The solar industry will only suffer by putting solar on spaces that aren’t good candidates and cause financial strain or debt for clients that would have been better off without solar.

In fact, our goal when we walk into a solar assessment is not to get a contract signed. Rather, the goal is to assess the solar potential accurately and make sure the client feels they have any and all questions answered about the process of going solar. And for clients who turn out to be great solar candidates, obviously we aim to help them save money, achieve some energy independence, increase the value of their property, and enjoy the peace of mind that using green energy provides! 

During an assessment we work with clients to determine what the best solar system would be to meet their real energy needs as well as what would be their best possible investment. Then we take the time to explain exactly how we made the determinations that we did. Sometimes, as some of our Yelp! Reviewers have shared, that assessment leads to the unfortunate conclusion that solar is a poor investment for the client and we make sure to explain why. Perhaps external factors make the upfront cost too high such as re-roofing or electrical panel upgrades, or maybe the shade of that lovely oak tree would make any solar output too limited. Maybe your usage needs are just too low to justify all of the fixed costs to install. In these cases, the sad reality is that there are solar companies who would gladly install a system anyways and lock you into a contract which could cost you incredible amounts of money with little to no return. 

As consumers ourselves, we’d rather make our own educated decisions especially regarding large purchases and investments. Being pressured into something is seriously a turn off. If you are influenced more by hard sales tactics, we likely won’t be the ones putting solar on your roof as there are plenty of other companies who have motivated salesmen knocking on your door. But at least we can go home feeling good about the work we do every day.

So if you’re interested in going solar but the thought of dealing with salesmen is revolting, never fear! Run on Sun would be happy to walk you through the process today.

So you’ve decided to go solar (congratulations!) and you are about to sign on the dotted line. Before you do, please take a moment and follow these three simple rules to avoid getting burned.

Rule #1 - Read the Contract!

It goes without saying that for a project as elaborate as a solar installation, a written contract is required.  But a written contract will do you no good, and could do you a great deal of harm, if you don’t take the time to read it!

I know, I know, contracts are boring. But lawsuits are not, and the best way to avoid such excitement is to spend a little tedious time now laboring over the fine print.

We see examples of solar contracts all the time, and some of them are pretty appalling. Written in tiny fonts, they just beg you to give up and simply ask, “Where do I sign?” Resist that temptation at all costs, less you discover the hard way that some unscrupulous contractor (or even worse, his unscrupulous lawyer) has snuck some awful prevision into your contract. Think I’m exaggerating? Take this beaut for example, from a section on Change Orders:

The change in the Contract Price caused by such Contract Change Order shall be as agreed to in writing, or if the parties are not in agreement as to the change in Contract Price, the Contractor’s actual cost of all labor, equipment, subcontracts and materials, plus a Contractors fee of 12% shall be the change in Contract Price…

Holy smokes! According to this, if the parties disagree as to the cost of a Change Order (more on this in a moment), then the cost is whatever the contractor says he has spent, plus 12%! What thinking person would agree to sign such a contract - or choose to do business with someone who is presenting it? Someone who didn’t take the time to read it, that’s who!

Rule #2 - Be Sure the Essential Terms are There!

A contract is formed when someone - a contractor in our example - offers to do something - in this case install solar on someone’s home - and a second person - the homeowner here - accepts the offer and agrees to pay to have the work done. In order for a contract to be binding, the parties must actually agree on all of this, which is to say that the homeowner must know certain essential terms. For example:

• Products - what products does the contractor intend to put on your home? At the very least, this should call out the specific solar panels and inverters (down to the model number) that will be used. I cannot tell you how many contracts we have seen (to say nothing of bids) that omit these terms. But you wouldn’t buy a generic “car,” would you?
• Price - how much is this going to cost you? If the system is financed (you aren’t really going to lease this, are you?), what are the total payments over the life of the financing. What about additional costs, say for outside structural engineering - who pays for that? Is it included in the quoted price? If it is to be billed separately, is the cost simply passed through, or can the contractor take a markup on someone else’s work? (We have seen contractor’s markup such services by 200% or more, never disclosing that fact to the homeowner.)
• Start date - when will all of this happen? What contingencies are there that might delay things?
• Duration - how long will this take? Are there any obstacles or conditions that need to be changed before the project can be completed? For example, some projects require trenching (say from a detached garage where the solar will be installed back to the house where the service panel is located), and it is not uncommon for the homeowner to have that done by someone else. But such a contingency should be called out in the contract so the responsibility for that work is clearly understood.

Rule #3 - When in Doubt, Wait!

Finally, if you are feeling rushed by the contractor (or his sales agent) to “just go ahead and sign already!” - then it is time to take a break. A legitimate contractor wants you to be comfortable with what you are signing.  After all, a legit contractor doesn’t want there to be any confusion about what is going to be done or how much it will cost.  So the legit contractor will be happy to answer your questions before you sign, knowing that creating understanding now, will help eliminate disputes later on.  But the shady contractor just wants you to sign now - and give them a check!  (Oh, and a word about initial payments - for a residential project, California law prohibits a solar contractor from asking for more than $1,000.  A contractor who asks for more before work is done is violating the law.)

Worst case, go full stop and tell the contractor you want more time to review the deal before you sign.  If you have doubts, consult a lawyer - yeah, yeah, I know all about lawyers (I used to be one!) but a little time spent now may save you major aggravation down the road.  And you don’t want to end up on the wrong end of a bad deal.

Solar leasing programs are very popular, driven, no doubt, by the allure of something for nothing.  After all, the lease programs insist that for nothing out-of-pocket you can start saving today - an appealing pitch that is only rebutted when the homeowner does some serious homework.  This is not a new topic for us, and our post pointing out the
Top 5 Reasons to Avoid a Solar Lease!, is one of our most popular posts ever.  But an encounter with a potential client this past week highlighted yet another peril in the form of the deceptive salesman. 

Don’t buy solar from this guy!

Just another rip-roaring, bulls-eye salesman…

A couple of days ago we got a call from a woman who had been referred to us by one of our clients. She had been thinking about going solar and had in fact signed a lease agreement with another company before she spoke with our client. “Whoa,” said the client, “you better think twice about a lease. You should really talk to the folks at Run on Sun before you go forward with anybody else."  The woman told us she had until Saturday to cancel her contract so could we please come and see her right away?  Given that she was a referral and time was tight, we scheduled her site evaluation for the next day.

What we found when we got there was a two-story, blue tile roof, littered with roof vents!  Once you allowed for clearances on all of those obstructions, as well as with the setbacks required by the local Fire officials, there was very little roof left for solar.  (We estimated maybe 3 kW max.)

But the contract that she had signed said that this other solar company was going to put 5.7 kW on her roof!  How on earth did that reach that conclusion?  The answer was simple: the sales guy came to her home with a stock contract that contained a provision buried within the fine print that allowed them to “revise” what would be installed once the “engineering review” of the home had been completed!

In other words, the guy trying (and succeeding) in getting her to sign on the dotted line had no idea whether his repeated assertions of “30% savings off your present bill” were accurate or not, and he plainly did not care.

This unfortunate woman, who lives in a nice home in a nice neighborhood, had been preyed upon by the solar industry’s equivalent of the flim-flam man, and make no mistake about it - these disreputable representatives are a pox upon the entire industry.

Oh, and as to that right to cancel the contract?  The lease agreement appeared to be speaking out of both sides of its mouth on this.  One provision cited the California statutory requirement of three business days to cancel, whereas a second provision promised six calendar days.  Yet the attached, Notice of Rescission, only referred to the three-day option, and it required that the document be delivered to an office in Texas to be effective!  Good luck with that.

Don’t be a victim!

No one should end up in this woman’s position.  Here are a few steps to protect yourself:

1. Always get references for any solar contractor you might consider.  If they cannot provide you with references, run, don’t walk, away.  Referrals from people you trust are even better.
2. If you are feeling pressured by the salesperson, show them the door.  Reputable solar contractors aren’t trying to push you into anything.  If the salesperson makes you uncomfortable - walk away.  (Trust your gut.)
3. Never, ever, sign a contract before the technical evaluation of your site has been done!  A sales guy with a projection of “your system” who has never seen your home is guessing, and quite possibly guessing badly, as was the case here.  Before you sign up for anything, be sure that you are dealing with a proposal based on the specifics of your home, not some generic sales brochure.

Caveat emptor, folks!