By Scott Gordon
SVP, Sales, HelioPower

I consider myself among the lucky. I had the good fortune to land a job in solar sales way back in 2007. Back then, times were simpler. The majority of my customers paid for their systems with cash or HELOCS (home equity lines of credit). PPAs (power purchase agreements) and leases were the realm of multi-megawatt commercial and utility installations and nothing of the sort was available for residential consumers.

In the “earlier” days of solar savvy customers compared solar purchases by comparing price per watt. Price per what?

Price Per Watt
Price per watt simply tells you how many dollars you are spending to buy a “watt” of solar power. Think of it this way: if your home requires a 6 kilowatt (KW) solar power system (6000 watts) and you pay $42,000 to have one installed, you’ve paid $7/watt. If on the other hand, if you spent $12/watt the same system would’ve cost you a whopping $72,000! Yes, the same system! Today’s solar leasing products allow some dealers to mask dramatic price differences, such as these, behind “low monthly payments.”

The chart here illustrates the range of prices paid by customers in Southern California Edison (SCE) territory according to CSI (California Solar Initiative).  This data was compiled by a third party, RunOnSun in Pasadena, CA.

In 2007 charts like this weren’t publicly available, so homeowners really had no way to verify whether they were getting a bad, good, or great deal on a solar system unless they compared 4 to 6 bids. Still price/watt held an important place in the conversation between solar buyer and solar dealer. By 2009, “What’s your price/watt?” was often one of the first questions my customers would ask me. By then, price/watt was solar’s APR (annual percentage rate used to compare bank loans).  It’s how you knew you were getting a good deal after you settled on equipment and installation.

Today, the subject of price/watt has all but vanished from the dialog. Why? The advent of now readily available leasing and residential PPA programs allow for the selling of solar systems using ‘savings per month’ in place of price per watt. This approach allows unscrupulous dealers to mask high, some might say, outrageous prices from their customers. Does it matter what your paying if you’re saving money every month? Of course it does.

Don’t get me wrong. There are many reputable dealers who help their customers to go solar through leasing and PPAs, and there’s nothing inherently wrong with either choice, but when dealers mask high prices in leases, consumers end up holding the bag.

This type of thing may have already happened to you if you’ve ever leased a car. Savvy buyers know to negotiate the price of the car before they choose how to finance it and then check the contract numbers carefully to make sure there’s nothing funny going on. Naïve buyers walk into a car dealership and fall for the “What kinda payment are you looking for on this baby?” line. If that’s you, keep reading.

Today, we see the similar tactics infiltrating the solar industry. You go online, get a quote, and you get excited because the solar company you contacted can save you $50/month on your electric bill with their exciting new lease! So you call them up, they dispatch a salesman, and just like that you’ve gone solar. Does it really matter what you paid? After all, you’re saving $50/month, right?

Let’s say the system that saves you $50 cost you $12/watt. If you leased a 6KW system you’re on the hook for $72,000. That same system for $6/watt would’ve saved you $100/month and cost $36,000. Big difference! Which system would you lease? The savvy buyer would’ve asked how much the system cost; how much power they were getting; and compared multiple bids. Such a buyer would by enjoying both significantly higher savings and a much faster ROI (if he put money down).

Questions for Your Solar Contractor
As I mentioned, price/watt is solar’s APR. When considering solar for your home, you need to ask your solar contractor two questions:

1. What is the cost of the system?
2. How many watts am I getting for that cost?

After you have your answer, you take the cost; divide by watts; and just like that you’ve mastered the art of price/watt and are a master solar shopper (well almost, look for my upcoming article Solar Lease Red Flags to become an even savvier solar shopper).

With price/watt in hand, you now know whether you’re getting a good value or being taken to the cleaners. Savings per month is a great way to determine the impact solar will have on your bank account, but a terrible way to shop for it. Price per watt is the great equalizer. Now that you have the power of price/watt to guide your decision, you can shop more confidently for your new home solar  system.

You can reach Scott Gordon directly at SGordon@HelioPower.com.

The intent of the Legislature is that AB 811 should be used to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property.

AB 811 authorizes a property owner, upon written consent of an authorized city official, to purchase directly the related equipment and materials for the installation of distributed generation renewable energy sources or energy efficiency improvements and to contract directly for the installation of those sources or improvements. 

Funding options include using the general fund, issuing municipal bonds, partnering with a utility to get financing or setting up private financing.  

Palm Desert and Berkeley led the legislative charge to put AB 811 in place, and have now enabled hundreds of properties to be outfitted with energy efficiency and renewable energy systems including solar. The “Berkeley First” program was launched Nov. 07. Their pilot program is fully subscribed at $1.5 million.  The Palm Desert Energy Independence program is now in its third round of financing, having installed $7.5 million in energy efficiency and solar photovoltaic systems in their town.  

The Sonoma County Energy Independence program has completed a feasibility study and is planning on offering a $40 million program, which will also include water conservation systems.

San Diego is working on a “Solar Roof Program.” The pilot project will focus on 150 to 300 homes, and 1 technology – solar photovoltaic. Success for the pilot is deemed to be completing the financing cycle, collecting 150-200 loan packages, and aggregating those smaller loans into larger packages that can be sold off on the municipal bond market. Encinitas, Napa and Redlands are all in the exploration phase of AB 811 programs.

Cities like Anaheim and Santa Monica have solar supportive programs already in place.  Santa Monica promotes solar adoption through its Solar Santa Monica program.  Solar installation firms bid for program, and guarantee “group” pricing.  HelioPower is a installer for this program.   

All across California residents and property owners are working with their elected officials to find new and innovative ways to increase the use of sun to power our electricity needs. 

For further information and a review of the legislation, click here. Support AB 811 adoption in your town! 

This April 22 is the 39^th anniversary of Earth Day.  HelioPower, founded in 2001 with a dedication to bring solar to as many rooftops as possible, will participate in several CA and Nevada events. The HelioPower energy consultants will help homeowners and commercial property owners understand how solar power can help put more “green” in their pockets and do their part for the planet.

A bit of Earth Day history…

“First celebrated in 1970, Earth Day was spearheaded by a grassroots movement to shake up the political establishment and raise environmental awareness. Although planners had neither time nor resources to effectively organize the event, it took place across the nation with amazing results. An estimated 20 million demonstrators and thousand of schools and local communities participated.  The Earth Day founder, former U.S. Senator Gaylord Nelson, remembers, ‘That was the remarkable thing about Earth Day. It organized itself.’ That first Earth Day led to the creation of the United States Environmental Protection Agency and the passage of the Clean Air, Clean Water and Endangered Species Act.

The amazing energy associated with Earth Day propelled the movement forward, and in 1990 Earth Day went global, reminding us of our interconnectedness and mobilizing 200 million people in 41 countries, lifting environmental issues onto the world stage.  Today, huge climate changes impact everyone; the opportunity to raise awareness seems more important than ever.  Earth Day celebrations have a huge potential to impact change as more than a billion people participate in Earth Day each year.”

Source:  Claudia Abbott, “lastword,” a column in SOM Magazine

Dedicated HelioPower solar consultants will be at the following events.  Please join us in celebrating this 39^th Earth Day – 2009!

Tahoe / Reno

Tahoe Truckee Earth Day, Saturday, April 18, The Village at Squaw Valley

20/20 Earth Vision: Reno Earth Day Celebration, April 19, Idlewild Park,

Orange County, CA

Eco Fair 09, April 22, Cypress, CA

Earth Day Celebration at The Ecology Center, April 25, San Juan Capistrano

Coachella Valley, CA

Party for the Planet, April 25, The Living Desert

San Fernando Valley, CA

Earthfest Carnival 2009, April 25, St. Cyril of Jerusalem School

We understand the passion “to make a difference.” We're passionate about about our work in the green energy field. This blog is an exciting opportunity to share information about being as energy efficient as possible, saving money on your energy bills whether you own a home, run a business or manage a facility…all to do our part in the search and implementation of environmentally positive changes. We’ve making a difference and you can make a difference too!