Shopping around for solar installers could reap biggest rewards
Larger home installers add average of 10 percent to cost, but their longevity appeal to some consumers
Jeremy Papasso, Daily CameraCustom Solar’s Houston Sherer works to install solar panels on a home on May 10 , 2016 in Boulder.
When it comes to getting the best deal on a residential rooftop solar array, the size of the installer matters — but bigger isn’t necessarily better, according to a study from the National Renewable Energy Laboratory in Golden.
NREL found that about 70 percent of the time, the largest players, defined as those installing 1,000 or more solar systems a year, quoted consumers a higher price than smaller competitors.
The premium for going with the brand name on systems purchased for cash was 10 percent on average. That works out to about $3,000 to $5,000 of the typical residential system that can run $30,000 to $50,000 before tax credits.
The largest 1 percent of installers put in about 60 percent of all systems, and the largest 10 percent accounted for 90 percent of the systems, NREL said. But thousands of smaller and lesser known vendors are also available to put in solar power arrays.
“Price can vary a lot. Consumers should shop around,” said Vikram Aggarwal, CEO and founder of EnergySage, an online site that allows consumers to obtain competing quotes on solar systems.
Much of the price information used in the NREL study came from EnergySage, which handled $1 billion in quote requests last year and bills itself as a solar panel world equivalent of the travel comparison website Kayak.
Typically, economies of scale allow a larger vendor to offer bigger discounts and win more business. But when consumers are unfamiliar with a product and prices are difficult to compare, that competitive pattern can be disrupted.
Marketing and customer acquisition expenses can run as high as a quarter of the total cost of a solar-array system at some of the larger players, who are often under pressure to keep a steady flow of new customers coming in, Aggarwal said.
Large firms will spend money to have salespeople cold-calling and knocking on doors to explain the potential advantages of solar power, something most smaller firms don’t have the budget for.