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Solar Panel Contract

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A solar panel contract is an agreement that explains all terms and conditions of several products or services between the homeowner and the solar installer. The contract ensures that everything is agreed upon by both parties in writing. It helps them understand all solar incentives and terms. The homeowner may also ask certain questions to the installer if they have any doubts. Let us learn more about a solar panel contract below.

How to Read a Solar Panel Contract

Interested parties can follow three easy steps to read a solar panel contract before getting solar panels on their homes. These include:

  1. Set Aside Uninterrupted Time. The individual will likely need at least an hour to read the solar panel contract thoroughly. They can even try to read through the contract together if they are making this purchase with a partner.
  2. Use Reading Comprehension Tools. This is yet another way to ease the process of reading a solar panel contract. It often involves highlighting key points or even taking notes. Understanding the fundamentals of solar energy will make this particular part easier for the interested parties.
  3. Utilize Sticky Notes. The individuals can mark anything they are unsure about with sticky notes. Remember that these are no stupid questions — so anyone can ask for clarification from the solar installer if something is not clear.
  4. Seek Lawyer's Recommendation. Individuals can consider getting a second opinion from a professional lawyer if necessary. A lawyer does not need to rewrite the solar panel contract. Yet, they can always offer comments and suggestions on what terms could be negotiated and explain the commitment in an easy-to-understand manner.

Knowledge Tip: Meanwhile, download this sample solar panel contract for your reference.

Elements of a Solar Panel Contract

While solar panel contracts will differ by provider and project, a few of them contain a certain amount of shared content. Their important elements include:

  • System Overview: It must outline the important specifications for the solar energy system, like:
    • The number and type of solar panels
    • Inverter specifications
    • Manufacturer warranty for panels and inverter
    • Roof for panels
    • Panel wattage
    • Ancillary equipment and parts
    • Battery storage (if applicable)
  • Financial Overview: It covers all the monetary details and includes:
    • Cost of materials
    • Cost of labor and installation
    • Summary of upfront costs
    • Permitting and inspection costs
    • Estimated cost savings over the system’s life
    • The annual solar output in kilowatt-hours (kWh)
    • Tax credits and tax incentives
    • Rebate information
    • Other solar incentives
  • Installation Overview: This particular guide outlines everything that can be expected after signing a solar panel contract. It includes:
    • Permitting
    • Installation
    • Interconnection
    • Approximate Install Date
  • Energy Production and Savings: The point of a particular solar power system is to generate electricity so that the person can reduce the amount they draw from the utility grid. This section of the solar panel contract should outline the average estimated energy production or how much power the panels can produce.
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Things to Consider in a Solar Panel Contract

The following items may not be part of the solar panel contract. Yet, they should still be addressed to ensure individuals are getting the most for their money and the best return on their respective solar panel investments.

Here are factors that everyone needs to understand the solar panel contract:

  • Understanding Solar Potential: This term is usually associated with the amount of solar energy that could be installed on a particular rooftop. The amount depends on its size, shading, tilt, location, and construction. According to the Office of Energy Efficiency and Renewable Energy (EERE), people should install the panels in the U.S. Someone’s solar potential may be greater than what they can afford or less than what they need.
  • Measuring the Solar Output: This consideration involves measuring the total kW generated by the specific solar panel system. The system should come close to meeting an individual’s annual consumption to eliminate the cost of the energy bill paid to the utility provider.
  • Analyzing the Return on Investment Period: It involves calculating the payback period by multiplying the total solar system cost by 0.7. The same amount is then divided by the annual energy bill.
  • Considering Net Metering Savings: Individuals must further consider how net metering works in their particular area. This involves checking how the solar installer will assist people with getting connected to the respective power grid.
  • Giving Efficiency Guarantee: An important question arises here which every individual must answer - Does the solar installer guarantee any efficiency percentage? It is important to keep in mind that even the most efficient solar panels will witness a decrease in power over time. However, these panels are guaranteed up to a certain percentage for around 20 to 25 years.
  • Knowing How Solar Incentives Work: A particular solar panel contract should be able to explain all federal and state solar incentives. It also involves identifying one's a person will qualify for and how to claim the respective incentives.

Tips to Get the Most Out of a Solar Panel Contract

Interested individuals must always follow some important tips to get the most out of the solar panel contract. These tips include:

  • Getting Everything in Writing: If something was agreed upon verbally, make sure to get it in writing on the solar panel contract.
  • Reading it All: The involved individuals must read the entire solar panel contract more than one time. They can also get another person to read the same contract to make sure everyone understands and doesn't overlook anything important.
  • Asking all the Questions: Nobody wants to ever settle for any kind of incomplete or insufficient answers. The same should be applied to the solar panel contract, where everyone has the right to ask questions before signing it up.
  • Negotiating Things: Negotiating items must be a common practice when signing solar panel contracts. It includes adding warranty terms and extra services, like electrical panel upgrades.

Key Terms for Solar Panel Contracts

  • Components: Something that often covers physical hardware, like the wattage, quantity, and brand of different solar panels.
  • Services: It explains and itemizes different soft costs, like interconnection, permitting, maintenance, and post-install monitoring services.
  • Billing and Payments: This section of the solar panel contract covers the due dates, late fees, APR, and interest rates.
  • Timeline: A specific period that outlines the installation start and end date. This often includes the estimation of how long the steps take to complete.
  • Warranty Info: It covers everything associated with the solar panel warranty of the particular installer.

Final Thoughts on Solar Panel Contracts

Individuals who want to take their homes to the next level by installing solar panels must understand their solar panel contract. This helps ensure people receive the best service for their needs so they do not end up feeling like the company took advantage of their needs. Installing solar panels and powering homes with renewable energy is great because everyone can save money and help the planet. Yet, a poor experience with the solar installer can ruin those benefits. That is why individuals must look thoroughly at each section of the solar panel contract and ensure they understand everything that is being said. They can even approach a lawyer for further help.

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