September 29, 2016

Have you Been Misled? Identify Shady Solar Quotes

When I drive around in the Rocky Mountain area I see solar installs across the valley and tons of companies advertising for solar. The solar industry has seen significant icon of the sungrowth over the years. As solar gets bigger there are going to be more and more companies trying to chase green energy. Most people have even had experiences with salesmen knocking on their door to try and sell them solar. In this blog post we are going to go over some facts about the solar market in Utah. We will also go over proposal examples on how to spot a miss-leading  proposal and explain why it was miss leading the customer.

The Value of Solar

There is a major value to solar it can

  • Save money
  • Investment opportunities (adds value to your home, investing in the future)
  • Positively improving the environment (reducing your carbon footprint)
  • Energy independence

 

What You Can Do To Be Prepared?

Do you qualify for solar? (are you retired? Do you have lots of trees that shade your roof?) if you are retired you may not qualify for the income tax incentive.

Give the companies accurate usage of your home
Be skeptical-read the fine print, ask questions.

Door knockers

I have previous experience in door knocking so I’ll give you the low down on how they work. Door knockers get paid per lead and sometimes hourly as well. The goal of a door knocker is to get a homeowner interested in solar and to schedule an appointment for a salesman to come back with a proposal for their home. They can be pushy but they are not always unpleasant.

They should be asking you questions like

  • Do you have a credit score of 640 or higher?
  • What is your electric usage (12 months)?
  • Do you have a taxable income?
  • Do you own the home?

The reason they ask these questions is to find out if you qualify for the federal tax incentive for solar. In Utah the incentive covers 30% of the cost of your system, but you must have a 640 or higher credit score and a taxable income.

 

Should I slam the door on a knocker?

Door knockers are not always bad and sometimes they can work for credible companies, however it is best to be weary of them. Listen to their pitch and ask questions, remember that they are probably making a commission on you so make them work for it.

  • What is the companies name?
  • Do they outsource for their installers?

 

After talking to a door knocker or a company of your choice, the next step of getting a solar system for your house is getting a preliminary proposal. This is were a lot of companies are not quite honest and can miss-lead customers.

 

Examples of Other Solar Proposals and what is wrong with them

Figure 1: This is an example of a proposal with a higher percentage utility rate increase. A utility rate increase is the rate at which the price of electricity will rise. And it is true utility rates will increase in Utah however they are going to increase by 4.5% . below in figure one you can see that their rate increase is 7%

 

screen-shot-2016-09-16-at-11-48-52-am

“Over inflated % on return rate of investment can make it look like the customer is going to save more however, Rocky Mountain Power rate increases = 4.5%
RMP rate increase is public record and can be found at the Utah Public Service Commission” Solar Advocate: Tom M.

 

 

Figure 2

screen-shot-2016-09-16-at-11-55-17-am

“Download a loan calculator and calculate how much you will be paying monthly over the term of the loan and see if it matches up with the solar proposal you were provided with”  Tommy G.

 

 

Figure 3
#3: Bad math

screen-shot-2016-09-16-at-12-07-05-pmOption 3: claiming monthly payments will be $99 after first 17 months (contradictory to $101 after solar average monthly payment)
Option 2: loan is assuming $114 monthly payments for first 17 months (fails to mention that this price will increase at month 18 and does not state what the % increase will be)
Option 1: months 1-18 payments will be $158, and the price will increase at month 19 (fails to mention that this price will increase at month 19 and does not state what the % increase will be)

-Questions To Ask/Assumptions
Why would a company choose to show the loan over a 15-year period instead of a 25-year period?
Fails to disclose that string inverters need to be replaced in 12 years (12-yr. warranty)

 

Figure 5

screen-shot-2016-09-16-at-12-28-57-pm

 

Misrepresents Before & After “Average Monthly Power Costs”
The colors used to represent “Utility Bill” and “Solar Payment” are both shades of blue. Why? This makes it difficult to differentiate and compare between the two prices.

 

 

 

 

screen-shot-2016-09-16-at-12-31-49-pmFigure 6
“Expected Utility Bill” amount assumes a 52% utility rate increase over 25 years with an annual utility price escalator of 13.7%

 

 

 

 

 

Figure 8

screen-shot-2016-09-16-at-12-36-42-pmFact Check: “Heating and cooling can account for over 50% of home energy use” In this proposal they are trying to sell you an Ecobee. This is a smart temperature control for you house. They are cool and can help with your electric bill, but this company isn’t quite up front about how it saves you money. If you have a A/C unit on your house it will affect your usage, however it must be programed correctly. 50% of your home energy is an over statement because most homes in Utah are heated with natural gas which does not affect electrical usage, it affects gas.

 

screen-shot-2016-09-16-at-1-09-16-pm

 

Figure 9

Misrepresentation of State return amount of $2,000

The Utah state tax credit is a real incentive, but what they don’t tell you is that the $2,000 will be taxed and the real amount a home owner would receive would be closer to $1450

 

 

Figure 10

screen-shot-2016-09-16-at-1-32-40-pm

 

Misrepresents energy produced (90% offset). Claims NEST will offset 10% of their monthly average usage and that it will increase the home value by about $20,867.

 

 

 

Figure 11
screen-shot-2016-09-29-at-3-39-47-pm

Over inflated state tax return customer will receive ($2,000). In reality, they will be receiving $1,450 from the state.

 

 

 

 

 

 

 

 

 

 

 

Figure 12screen-shot-2016-09-29-at-3-40-11-pm
Misrepresents the cost of utility bill over 25 years & fixed payment cost

 

 

In conclusion customers should watch out for

  • Over Inflated Percent on Return Rate of Investment (some proposals show a 7%-12% utility rate increased.
  • Utah State Tax Credit
    Proposals that show a full $2,000 return falsely improves ROI
    Reality= you do not get full $2,000
  • Loan terms
  • Nest/Led factors

If any one has questions/ comments/  thoughts please comment on the blog.

 

References

What’s the Financial Value of Solar for Residential Customers? (Part 2): Educating the Public on Solar’s Value and their Available Options


https://paulamspv.com/