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How much does solar cost?

“How much does solar cost?” or “What does it cost to go solar?” or even “How do I get free solar?” are typical questions that all solar sales pros regularly hear from prospects. These are buying questions that indicate genuine interest and should be addressed carefully. The top solar sales reps will address the “cost of going solar” concern by reframing it.

By showing the opportunity cost of not going solar. They will force the prospect to change their thoughts about the cost. By asking the prospect, “What is the cost of doing nothing?,” the rep effectively changes the whole context. The graph below shows how much a small monthly bill will rise over time due to Inflation In this case, the current energy bill is $215/month, and it shoots up to $574/month in 25 years with under 4% inflation. We are currently at just over 7% inflation because printing money is fun.

This online Inflation Tool shows what happens to a $100 a month electricity bill, over the next 25 years, if inflation stays at about 10%. We call this the cost of doing nothing. The $100/month turns into a $1030 energy bill.

How much does solar cost?

That inflation is scary stuff, but it can work to our advantage as well. When just looking at the numbers, solar looks excellent on paper. Unfortunately, almost every prospect has heard one or two horror stories about solar. They expect solar salespeople to be pushy, or they believe solar is an expensive luxury. They want to hear, “Your new solar panel’s will be just $58,630.99! Its a great deal!” Then they can say, “Yup, I knew it. I even told my wife how expensive those solar panels are. That’s way too much money.” They can check solar off the to-do list and feel like they have done their research.

However, if you ask this prospect how much their current utility bill is, they say, “Oh, it’s just $330 this month.” You gasp and say, “That’s great; going solar isn’t going to cost you a penny; it will save you money. Let me explain. Going solar would eliminate the $330/mo utility payment forever, but you would have to invest some of that money you saved into a small power company that will live on your roof. No more throwing $330 down the toilet each month; you’re going to invest $228 every month into something you own. Your new investment will have positive cash flow from day one.

So, when someone asks, “How much does solar cost?“, We must put the question into context. Every home is different, and every homeowner uses power differently. For instance, my wife is always cold and constantly bumping up the thermostat at night. But, on the other hand, I can sleep with the windows open in Colorado all winter. I’m always hot.

As soon as you start shopping for solar, you will probably start by finding local solar companies in your area. A google search for “Solar Company’s Near Me” or “local solar contractors” should locate quite a few options. If you request an in-person consultation, you will know if they are, in fact, local. A virtual consultation might be offered if the solar company is a sales-only solar company. After the job is sold, they hand it over to a local installer. Nothing wrong with that, but it can make communication difficult.

Anyway, at some point, you will want to see some numbers. Some websites have online tools to make sizing your solar system a breeze. Check out our Solar Calculator to get an idea of the cost of going solar without having to meet with a salesperson.

If you do schedule a virtual or an in-person appointment, your solar consultant will usually start by asking for your annual consumption. You can ask your utility company to provide that or take a photo of your last utility bill. Most utility bills show your kilowatt consumption for the previous year somewhere on the bill. Only after looking at the energy consumption history in that specific home could one start to get an idea of how many panels would be needed to replace the grid power. However, we still don’t have enough info to answer the question, “How much does solar cost?

Even with the last year’s energy usage on hand and all of the roof measurements pulled from satellite imagery with roof obstructions confirmed onsite with a tape measure, we still need more info to be accurate.
We must also ask:

-Do you plan to buy an EV at some point?
-Do all family members leave the house simultaneously each day?
-Does your utility company offer Net-Metering?
-Does the Net-Meter program buy back at a one-to-one ratio?
-How old are your appliances?

In addition, with Net-Meterting becoming widely available to consumers, we must consider purchasing habits or buying styles to create the best package for each customer. For example, some customers prefer only purchasing enough solar panels to cover their household’s needs. We will call that the “Conservative Charley” approach.

However, the neighbor across the street has a different buying style. He will want to max out the solar panels on his home’s southern-facing roof areas. Therefore, he installs a nine KW solar system on his roof. His solar design will attempt to recapture all of the energy available due to the size and exposure of his roof’s south-facing surfaces. We will call this strategy the “Mr. Greedy Landlord” style.

The Net-Meter program allows all nine KWs of Mr. Greedy’s new solar system to be utilized. About half of the energy produced by his solar panels is sent back through the grid. The other half of the energy produced by his solar array is used to power his home. His solar setup pays him up to seventy dollars each month.

Conservative Charley purchased a five KW solar system. His system is considered a one hundred percent offset because the panels produce one hundred percent of what his home requires. He paid $31,372, and his credit was great, so he financed the system. His loan payment is $113/mo for his solar. It’s a fixed payment, just like his mortgage, and it’s just a couple of dollars less each month than he used to pay the utility company. So Charley’s “Cost” is negative two dollars a month. When Charley gets asked, “How much does solar cost?” He can say, “My solar saves me two dollars each month!”

Mr. Greedy pays $181/mo for his much larger solar system, but the net-meter program pays him for six months of the year. So on the best months, he gets more than seventy dollars back. Some of the month’s Greedy breaks even. So why would Greedy take this approach? Greedy is planning for the future. He knows that inflation is skyrocketing. He knows that when inflation is at 10%, the cost of energy doubles every 7-8 years. His payment stays the same, but his payback amount increases with inflation. So the $75 he was getting becomes $150, then $300, and so on.

” target=”_blank”>Inflation Explained

Now, when Mr. Greedy gets asked, “How much does solar cost?” He says, “The solar panels don’t cost me anything. My solar panels pay me! So I not only eliminated my old utility bill for good but, more importantly, I re-invest the money I was spending on power, back into my own power company sitting on my roof!”

Conservative Charley still saves money, but after 25 years, the difference in the amount saved is astounding. Charley’s cost of going solar is negative $10. That stays about equal over time. (Although the buying power of that same ten dollars diminishes over time.)

Of course, Mr. Greedy, on the other hand, started his solar journey with a slightly more aggressive approach. His cost starts at negative ten dollars a month and then grows to an astounding extra $640 spending cash in his pocket every month. Now, inflation won’t inevitably stay as high as it is right now,

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