Going solar is no longer only for people with money or for those who are gung-ho about climate change, but for people of all economic incomes who want to save money or reduce their carbon footprint. If you are considering getting solar panels, here is some information and negotiating tips I want to share from my personal experience that could help you get better deals.
How I got started with Solar?
I’ve always wanted to go solar because I want to save the environment and at the same time save money. Three years ago, I spoke to a solar sales rep about getting solar panels, but it would have cost me a fortune. First I would need to get a new roof, since my roof is over 10-15 years old. Getting a new roof would cost anywhere from $4,000 to $6,000. Second, I would need to spend at least $500 for tree trimming in order for my solar panels to get the maximum sunlight and achieve full energy production. Third, the solar panels alone cost anywhere from $10, 000 to $20,000. Going solar would have cost me over $20,000, a price tag not affordable to a majority of Americans, including myself.
In the summer of 2019, another solar sales rep stopped by my house and said I wouldn’t have to pay anything out of pocket. I was suspicious about his claims , it sounded too good to be true but I decided to sit down and give him a chance. It turned out he was right, I technically wouldn’t have to pay out of pocket and for these reasons:
- A lot has changed since 2016. Solar panels are much cheaper and will continue to be affordable over time and more government rebates will reduce the cost.
- In April of 2016 we had a major hail storm in San Antonio, Texas and I didn’t think much about my roof until the sales rep told me that a lot of San Antonians affected by the hail storm got their insurance company to pay for roof repair. Turned out my roof was badly damaged from the hail storm and I was able to get the insurance to pay for it.
- The cost of installing solar panels and the product alone would have cost $15,840, but with a couple of rebates from the government and from CPS Energy (our electric provider in San Antonio), I was able to lower the cost to $8,688 (with the CPS Energy rebate worth $2,500, government rebate for $4,002, and other discounts).
Financing
With any major investments, such as buying a home or a car, we finance because the majority of us don’t have the money up front. After the discounts and rebates, I financed my solar panels for about $8,688, at 3.99% APR for 20 years; my monthly electricity cost would be $58.
Research
Before I get into any details about negotiations, let’s go over what information you need to gather before going solar. In this section, I will go over electricity bills, essential questions and answers, and inputting data into spreadsheets.
Electricity bills
You need at least 12 months’ worth of electric bills to find out your average power usage and cost. Many people don’t have paper bills on file or saved; here’s what you can do. Go online and search for your electric provider. Some electric providers should have an online portal for you to pay your bills. In San Antonio, Texas, a city with a population just over 1.5 million, we have one electric provider and I will show you how I navigated through their energy portal.
Questions and Answers
There are a lot of questions and answers regarding solar panels alone, but here are four essential questions you need to ask your sales rep. For each question I provide you with my answers.
- What is the power rating of the solar panels?
- Typical panels are rated between 250 to 400 watts. The higher the wattage the better. In my case, the sales rep recommended 330 watts. That is how much energy solar panel is expected to generate.
- What is the power output?
- The amount of sunlight varies depending on your location. In Texas, we get about 5.2 hours of direct sunlight. And we know that our panel rating is 330 watts. You take 330 times 5.2 and get 1716 watts from those hours of direct sunlight. 1716 divided by 1000 equal 1.72 kWh of energy production per panel per day.
- How many panels would my home need to generate enough electricity?
- Depending on the size of your home, the number of occupants and the average energy consumption, your sales rep will decide how many solar panels you need. My home is about 1120 square feet with three occupants, and the sales rep decided we would only need 12 solar panels.
- Will the number of solar panels be enough to meet our energy demand?
- We know that our solar panel rating is 330 watts, which means we can expect one solar panel to produce 1.72 kWh of energy per day. Multiply 1.72 kWh by 30 days and you get 51 kWh per month. Multiply 51 kWh by 12 panels to get 618 kWh per month of energy production.
- Again, my home is about 1120 square feet with 3 occupants and we use between 588 kWh during the off season and 1449 kWh during the summer. To answer our question, Will it be enough? I would have to say “yes” and “no” depending on the season.
Input Data to Excel
This is how I organized my data into Excel.
A lot of this information can be found in your utility bills from columns A to J. For Column I, “kWh exceeded”, I got the values by taking energy consumption per month minus 600 kWh; the peak capacity charge kicks in when my home energy consumption exceeds the energy threshold of 600 kWh during the summer season. For example, our energy consumption for August 2018, 919 kWh, minus the energy threshold of 600 kWh equals 319 kWh. That’s how much energy we went over.
Columns K to O can also be found on your utility bills. While other charges remain constant throughout the year, our fuel adjustment and regulatory adjustment fluctuate. To get the total cost, “before solar”, we add all the costs together (E+G+J+L+N).
My solar panels are expected to generate on average 618 kWh per month, which is under producing because my average energy consumption per month is greater than 618 kWh. I’m financing my solar panels for about $8,688 for 20 years with a 3.99 APR and that amount is after the discounts and rebates. Which means my monthly payment for the next 20 years is about $58.
- To get the “net energy kWh” in column S, take the monthly “energy consumption” from column C and subtract that by “solar panels energy output” from column Q. Her’es the function I used, =Q-C.
- To get the “net energy charge,” take “net energy charge” (S) and subtract that by 1 to get rid of the negative sign and multiply it by “energy charge” (F). Here’s the function I used, = (S2-1)*F2. For values without the negative sign, here’s the function I used, =S9*F9.
- For fuel adjustment and regulatory adjustments you do the same as the previous example. Take the “net energy charge” (S) and subtract that by 1 to get rid of the negative sign and multiply it by either the “fuel adj. cost” (K) or “regulatory adj. cost” (M). For values without the negative sign, no need to subtract it by 1. Here’s the function I used, =S9*K or =S9*M.
- To get the total energy consumption cost with solar (W), you add all the costs together (E+R+T+U+V).
- To get the expected saving per month, subtract the cost with solar (W) from the cost before solar (O).
Without solar panels our electricity cost $1,219.76 and with solar panels our cost is $1,154.29. That’s a savings of about $65.47 per month.
How I negotiate
Now that you have all your data inputted in the spreadsheet, it’s easier to see how much electricity and money you’re actually saving and to ask for better deals.
Negotiation Tips # 1
The sales rep told me that if I decided to keep the rebates and not put it towards my solar expenses, I should be looking at a monthly rate of $85. At a monthly rate of $85, our monthly electricity cost with solar is higher than without solar panels. We’ll be paying over $250 more and it doesn’t make any economic sense to go solar if we end up paying more with solar than without.
Again, if we put the discounts and rebates toward our solar panels, our monthly utility cost is about $58. That’s a saving of about $65.47 per year. The more money you put towards your solar payment the lower the monthly rate.
Let’s say we want to lower our monthly cost to $50 per month; that’s a total saving of $169 per year and a reasonable saving.
At a monthly rate of $58 you’re basically breaking even. Let your sales rep know you want a lower monthly rate. Remember, don’t let them rush you into anything. If they don’t agree with your offer, make sure you have other sales reps ready to accept the offer. If you have a good credit score, then you should be able to lower your finance charge and lower the monthly rate.
When I tried to lower my monthly rate from $58 to $50, the sales rep kept telling me that my electricity rate is going to get more expensive over time and I’m going to save a lot of money by going solar now.
Let’s look at our data: from August 2018 to August 2019 the service charge remains constant, as do the energy charge and peak capacity charge. The only charge that fluctuated is the “fuel adjustment” and “regulatory adjustment”. I agree with the sales rep to some extent but I don’t think the energy rate is going to drastically change that much. And this is why it’s important to have at least 5 years’ worth of electricity which will help you make your case and get better deals.
Negotiation Tips # 2
As I mentioned before, our solar panel is expected to generate about 618 kWh per month. Based on the data gathered, minimum energy consumption is 588 kWh and max is 1449 kWh. Out of 12 months, we have one month that is under 618 kWh.
I didn’t mention this earlier but my sales rep said his company will install an energy efficiency system such as LED lights, Google Nest (a smart thermostat that tells you which appliances are using the most energy) and the solar attic fan (which is supposed to cool down the attic, resulting in fewer energy consumption).
These energy efficiency systems are supposed to reduce my electricity usage by 30%. That’s a lot of energy reduction. With 30% energy reduction we would have over 5 months of electricity usage less than the solar energy production.
Inform your sales rep to either provide you with energy efficiency systems to offset the energy cost or help you find other incentives (such as rebates or extra panels) to lower your energy usage. It doesn’t make sense for anyone to go through all the trouble of installing solar panels and not save any money. Of course, like all sales people they always say you’re getting the best deals; but that’s not enough. Let them know you need concrete proof that solar panels will reduce your electricity bills. Ask them for references, talk to their prior clients, and do some digging around.
While I was not able to get him to lower my monthly cost from $58 to $50, I was able to get 4 months of free electricity and a check of $650 to put towards my solar payment. Sometimes you just have to put your pride in a box and haggle away.
Conclusion
If you decided to go solar, make sure you’re not paying more than what you are already paying. Do your homework, ask questions, talk to more than one sales rep, ask for referrals, and don’t be afraid to go solar. It’s no different from buying a car; you just have to put some effort into it and avoid getting the short end of the stick.
Need a referral? You may reach me at sustainabletopics@gmail.com. Don’t forget to subscribe to my news feed for more updated videos and blog about my experience going solar.