The perils of “cheap solar”
Solar Business published a report today warning customers of the dangers of signing up for cheap solar. In a competitive solar market companies are trying every trick in the book to get to the $1/watt threshold (i.e. below $3,000 for a 3kW system), but this doesn’t necessarily represent good value for consumers.
$1/W, is it even possible?
Solar Business looked at the feasibility of such an offer, putting together packages of the cheapest components and estimated installer costs. The result was not even close to $1/W.
They adjusted their figures cutting the margins by 10% (occasionally retailers will offer such incentives, rarely more than that). Even assuming they are trading their solar certificates at a higher than market value, the numbers still didn’t add up, the magical figure of $1/W was just too elusive.
It’s a troubling thought, especially considering the reputation of the manufacturers servicing the bottom of the market. Even those that aren’t the “cheapest” have trouble with reliability and warranty issues.
How are they doing it?
There are a number of theories. Perhaps they are running at a loss hoping to gain market share? Perhaps they don’t understand their customer acquisition costs?
In reality some budget solar companies are promoting cheap systems, but suggest to customers that to keep their warranty the system will need to be “serviced” annually. Often this costs a few hundred dollars and offers little more than a wash of the panels and a quick inspection of the wiring.
A reasonable expectation for a solar power system to operate would be something like 15 years and beyond. Paying for an annual $300 service for fifteen years adds up to a fair profit, customers with anything less than a 4.5kW system will have paid double over this time frame.
Rooftop solar panels don’t require much more than the occasional sprinkling of rain to stay clean. If you are concerned about them getting too dusty a quick hosing or wipe with a damp rag should suffice.
Also, this doesn’t take into account costs incurred for system maintenance should the solar power system have issues. Most companies offer reasonable warranties and offer complimentary replacement should components fail. For a lot of customers solar panels are a long-term investment, and relying on cheap components to hum along for a decade or two without issue could be a risky move.
In the end, the old saying of “you get what you pay for” is true when it comes to physical components, but beware extraneous costs from those offering a deal too good to be true.