Truths & Transparency in Solar Proposals

 

A major part of investing in solar is understanding the initial sales proposal. You’re likely going to be comparing a few bids from different installers, so shouldn’t you know how to properly evaluate your proposal?
 
At JKB Energy, our proposal ensures you know what you’re signing up for and offers incredible insight on how much solar can yield in annual savings for your business. We go above and beyond to present an accurate and truthful quote for our customers - with no hidden costs. Every system is a little different, so it’s important to make sure you are getting into a proper long-term relationship with your new solar installer.

Picture1.png

How Quickly does Solar Pay for Itself?!
Payback normally takes about 4 years with a return rate of around 18%. This locks your business into a 20-year deal with your utility provider.
 
This is a typical estimate and not your best-case scenario. As systems grow in size and these numbers get spread, it’s not uncommon to see a 3-year or 2 ½ -year payback with 20% return rates.
 
Locking In Your Rate
There are two main parts to the solar bill: electric charges that account for 70-80% and demand charges that solar credits can not be applied toward. Because of this, you can’t assume solar will guarantee month-after-month reductions in your demand readings.
 
When locking into your rate, you’re not getting a flat rate as much as you’re locking into an expected cost in energy. So when the utility has to raise electric rates, which happens periodically throughout the year, you’ll be safely locked into your sell-in rate.
 
When utility increases the rates on those who are locked in, they’re actually increasing it on themselves because you get to sell all your energy dollar for dollar – essentially getting zero inflation for 20 years – making solar such a great investment. As policies change over the years, prior contracts will be grandfathered in. This avoids any future changes to the original 20-year agreement.

Picture1.png

The Truth
A recommended inflation rate estimate for a solar proposal is 3% on an annual basis. Electric rates usually rise year after year, especially for the ag industry. When it comes to evaluating a 25-year investment, a 3% inflation rate will be on the conservative side. 
 
…And Transparency
These savings still look good in a “worst-case” scenario, and can only look better after that. You might see some proposals that estimate 5-8%. These numbers are not something we’d recommend for proposals as it can become inaccurate over time, hence why we normally suggest 3%. Better to be safe and transparent, than sorry.
 
Since the utility billing process is based on 15-minute increments, you can’t assure regular savings. If you get cloud cover for 15 minutes and your solar production dips, you’ll be back pulling from the grid and creating a demand spike during that 30-day billing period. So proposals that try to guarantee 20% demand reductions won’t likely be entirely accurate.

Picture1.png

Now’s the Time to Make the Switch
The current price and quality of products makes now the best time to switch to solar in California. So be an informed buyer—You want to work with an ethical company bearing plenty of honesty and integrity. Make sure you know what to look for when you finally decide to go solar.

Here are 4 traits you should be looking for in your solar installer:

Honesty:  Customers expect honesty out of any sort of investment. Everything from initial sales conversations to the proposal numbers. Proposals will outline savings that can last up to 25+ years, you’ll want to make sure that expectations are realistic as possible. The process needs to be as transparent as possible in order for everything to work properly.

Integrity:  When it comes to the construction and the overall process, you’ll want to work with a team that has integrity. This is important now more than ever. It’s not about how much you know; it’s about how it’s done and how efficiently a team can work together. Because the installation process is such a huge team effort, integrity is a key factor.

Accountability:  Tying in with honesty, you want to make sure you have a company that’s going to stand by the work they say they’ll do. You want to look for accountability in your warranty and in your customer service, even in regards to simple questions. Our staff is not only qualified to serve your needs, but is also readily available when you need them the most.

Quality:  If you’re going to invest in solar, you want a tier-1 module. Don’t rush all the way to the 1-yard line just to skimp on quality product. It’s not just a rating of how good the module will perform, but it’s a measurement of the company that manufactures them as well as the warranty used to back it up. Like most purchases in life, you tend to get what you pay for. Make sure you’re signing up for exactly what you want.

 
Chad Cummings