How to Save Money on Solar Power

One of the most effective ways homeowners can begin pitching in and helping to address the challenges posed by climate change is by switching to solar power generation. As the Solar Energy Industries Association (SEIA) points out, solar produces less life-cycle greenhouse gas (GHG) emissions than conventional fossil fuel energy sources. While there may be some GHG emissions produced during the manufacturing and recycling of solar system components, using solar to generate energy results in zero GHG emissions and has zero environmental impact.

While purchasing a residential solar energy system can be a great way to increase your home's value, it can be a pricey undertaking. The average cost of a rooftop system is about $15,000 to $25,000. Here are a few ways you can try to save some money on that price tag when converting your home to solar energy power.

Shop via a quote aggregator

If you intend to purchase the solar panels (as opposed to leasing them), you can invite multiple installation companies to provide estimates individually, or you can simply use an online solar marketplace like EnergySage, which allows homeowners to obtain multiple competitive bids from pre-screened, local installers.

"We're the Expedia or Kayak of solar," says Vikram Aggarwal, CEO, and founder of the site, which works with a network of more than 500 pre-screened solar installers.

Created in 2013 with funding from the U.S. Department of Energy's SunShot initiative (a program designed to reduce the cost of solar energy and make it cost-competitive with other forms of energy), EnergySage is known for helping shoppers to pay significantly less for residential solar than what's offered outside the platform. This, says Aggarwal, is because of the competitive nature of the EnergySage marketplace.

"You're getting high-quality companies to compete and prices tend to be 20 to 30 percent less," explains Aggarwal. "We have data to prove that."

A handful of government-funded research labs back up what Aggarwal is saying about the cost savings to be had when using EnergySage to purchase residential solar. One such study, The Value of Transparency in Distributed Solar PV Markets, published in 2017 by the National Renewable Energy Laboratory found that quote aggregators like EnergySage in particular not only drive installers to be far more transparent but they also drive prices down by as much as $5,000.

Obtain multiple bids

If you opt not to use an aggregator platform, the best way to save money is to do your due diligence and shop around.

"Make sure you're getting quotes from at least three installers, but better yet, five," says Aggarwal. "By letting each know, that you are getting quotes from three to four or five companies, typically that helps. No company wants to lose out. So when they know you're getting quotes from other companies, they come with sharpened pencils."

And while you're getting those quotes, ask a lot of questions. You'll want to try to understand the quality of the solar panel product you're being sold, as well as the quality of the company itself. Look for references, ratings, and reviews, says Aggarwal.

Pay attention to system size and style

The size of the solar panel system you opt to install can also impact your overall price, says Aggarwal.

"Think about how much of your energy consumption you want to offset," he explains. "We have served over half a million homeowners at this point and most want the maximum offset and to generate as much power as they can. But there are some people who are very focused on aesthetics also."

The point being, if you want the largest system possible in order to accomplish as much cost and energy savings as possible, that will likely cost you more up front—at least when it comes to purchase price and installation fees.

There are also various style choices to be made along the way when it comes to solar panels, and some of those options will cost more or less. For instance, Aggarwal notes there are "black on black" options that include both a black solar panel and a black rack that the panel is attached to. There are also all-glass solar panels. The bottom line with such options is that some may very well cost you more than others.

"You should not make a lot of additions like this if you want to save money," says Aggarwal.

Choose smart financing

How you choose to pay for a residential solar system may also present an opportunity to save money, says Aggarwal. Rather than accepting a financing program from the installer, for instance, you could go to your bank or credit union and obtain a loan. You might even consider applying for a home equity loan and using that money to pay for the installation.

Then tell the solar installer, you're going to use your own financing and ask for a better, more competitive price for the system in exchange.

"Ask the installer to cut you a deal if you bring your own loan," says Aggarwal. "That could result in very significant savings."

Install when it's cool

Few people enjoy working on a rooftop in 100-degree heat. What this means is there's somewhat of a seasonality to the solar panel installation business (and pricing), which varies depending on where you live in the country.

"While in the Northeast, summer is the best time to install, in the western states it's too hot," explains Aggarwal. "Installers may be looking for milder weather to do the installation."

You might save slightly by choosing to install your solar at a more reasonable time of the year for the region in which you live.

Consider leasing

Leasing your solar panels is yet another option to consider if you're looking to cut costs, though this alternative is becoming less popular with consumers, says Aggarwal.

Leasing allows homeowners to go solar without paying any of the upfront costs of purchasing and installing the system. Instead, a company, such as Sunrun or Vivint, pays those costs. Generally, if you opt for this type of approach, you will have two monthly bills, one with the solar company for the lease agreement (which can be as long as 20 to 25 years), and one with the local utility provider, which you will still pay for any power you use above and beyond what your solar system generates.

In addition to eliminating installation costs, solar leasing companies point out that going solar also saves customers money over the long term on utility bills.

"Sunrun customers see an average bill savings of 5 to 45 percent over the lifetime of their system," says Wyatt Semanek, Sunrun's public relations manager. "It's a wide range because, as you can imagine, total savings depend on factors like the homeowner's energy consumption, system sun hours, geographic weather cycles, and more."

Bear in mind, however, that leasing can have a variety of drawbacks. For instance, leases will not qualify for any of the tax incentives that are available to homeowners who purchase and install residential solar systems on their own dime. These types of tax incentives are available through the federal government and many state governments. When you opt for a lease, those benefits all go to the solar company, which owns the system.

Use these tools

The EnergySage website provides a variety of helpful tools for homeowners who are considering going solar. The site's Buyer's Guide is a Consumer Reports-style resource that allows for easily searching, sorting, filtering, and comparing today's most popular models of solar panels, inverters, and home batteries. The guide is also a great way for consumers to learn more about the equipment and understand what's in their quotes, says Aggarwal.

EnergySage also offers a Solar Calculator, which provides a quick way to obtain a customized estimate of solar costs and savings for your property.