From Oranges to Apples: How to Compare Multiple Solar Estimates in Different Formats

When you’re shopping for a big investment like a home solar system, it’s important to compare different options to ensure you get the solar system that is right for your home and budget. But solar installers don’t provide quotes in a single format. So how can you determine which offer is best?

Overall Price: Suppose Solar Installer A offers to install a solar system for $10,000, while Solar Installer B offers to install a solar system for $13,000. At first, the decision may seem obvious: Installer A offers the lowest price, so you’ll go with them. But the reality can be much more complicated.

Total price should not be your only consideration. Prices vary from one installer to the next based on the amount of energy the system produces, the efficiency of the panels, and other factors like whether the system package includes a solar battery. Two systems could have the same total price, but produce radically different amounts of energy and therefore have wildly different savings profiles.

Dollars per watt: The best way to compare offers from two solar installers is to use a dollars-per-watt metric. This involves simply dividing the total cost of the system by its estimated wattage. Since wattage measures the power of the solar system, you’ll effectively be measuring the cost per unit of energy production.

For instance, suppose Installer A offers an average 6-kilowatt system for $10,000 and Installer B offers a 5-kilowatt system for $9,000. Which one is the better investment based on its expected energy production? Installer A’s system offer costs about $1,666.66 per kilowatt, while Installer B’s system will cost $1,800 per kilowatt. In this case, Installer A’s offer is better on a dollars-per-watt basis despite its higher total price.


A dollars-per-watt price comparison is also important because installers use a variety of methods to estimate how much clean solar energy your home could produce. Energy production varies with your roof’s slope and orientation; the level of shade and sunshine your home gets; the type of panels that are installed; and a number of other factors. Energy production estimates usually vary by about 10 percent, so for a typical home, the amount of solar panels a particular installer recommends may vary by 10 percent, too. In other words, even if two installers offer different absolute prices, they might not be charging you different per-watt rates.

Comparing the dollars-per-watt value between installers is a good way to normalize for system size differences. However, it’s also important to compare the equipment included in each installation package. Better equipment will cost more than equipment of average quality. Be sure to consider the main pieces of equipment in your solar system, including:

The solar panels: All black solar panels (with black frame and black paper) usually cost $0.05 to $0.15 per watt more compared to traditional solar panels, which have a silver frame and a white backsheet. The higher price is due to their greater efficiency, meaning they can absorb more sunlight than a lower-efficiency panel can. Most solar panels are 5 to 15 percent efficient, so if the panels you want are more efficient than that, be prepared to pay top dollar for them. High-efficiency panels like those produced by SunPower, LG NeON R, and Panasonic may have a premium of $0.30 to 0.50 per watt.

Inverters: Systems with Enphase microinverters and SolarEdge optimizers are usually standard fare for residential systems. Systems without either of these components should be cheaper by $0.05 to $0.10 per watt.


Racking: Racking (or “mounting”) products are the frames onto which solar solar panels are secured. Different racks meet different needs. Some are best for flat areas of the roof, some are best for slanted areas, and some are meant to be placed on the ground beside the home rather than directly on your roof. While some racking options are slightly more expensive than others, the variations between them are small. Racking choices should add no more than $0.05 per watt.

Choice of ownership: There are two ways to buy your solar panels. The best option from a financial standpoint is to purchase your panels outright with cash. Buying your solar panels with cash means you’ll get to start enjoying big savings right away.

Overall, the cash price is usually cheaper than the loan price by $0.30 to $0.80 per watt compared to using financing because of the savings on financing fees.

Most people, however, choose to finance their solar system with a loan. There are a variety of loan options available. For instance, you could get a property assessed clean energy (PACE) loan if you’re in one of the 31 participating states or Washington, D.C. You might also qualify for a local or municipal solar loan through a public-private partnership. The Milwaukee Shines Solar Loan program, for instance, offers loans of up to $20,000 for residents interested in installing solar energy systems.

Many solar installers also partner with lending institutions to offer solar loans directly to customers, which streamlines the buying and financing process. Loans from installers might not be obvious, since they’re often bundled into the overall system price. To best understand the upfront fees, ask installers for their cash price and their loan price.

When comparing loan offers for a particular system, the loans with higher fees also tend to have lower interest rates. The best way to determine how the fees and interest rates balance is to compare the projected monthly payments. For a given system and loan term, a lower monthly payment means higher savings.

Installer Warranty: The standard installer warranty covers your solar panels for 10 years. This warranty covers any defects associated with installation and provides coverage for any damage to the roof. Some installers offer warranties for up to 20 years. These longer warranties provide more value, but they might also cost more.

Project additions: Some solar projects may require moving vents or upgrading old electrical panels in the home or trenching to get wires. Your installer will let you know if you need these additions when they assess your home for a solar array. If you end up needing any additions, clarify with the installer how much they’ll cost.

Now that you know how to compare different solar energy systems, you can move on to the next important step: choosing one that’s right for you.