How to Compare and Evaluate Commercial Solar Proposals
Make an Informed Decision When Choosing Your Commercial Solar Installer
As a business owner, you want to do what’s best for your company. When it comes to energy costs, going solar is a great way to save. But with so many commercial solar installers and professionals out there, how can you be sure you’re picking the right partner?
The Genie Solar Team has been working with customers for years to help them navigate the various considerations for solar projects. We look forward to helping you on your journey to decipher the fact from salesmanship fiction to ensure you are confident in your long-term energy decision to go solar. In this blog post, we’ll discuss how to compare and evaluate commercial solar proposals. We’ll cover key factors such as price, experience, and more. By the end of this post, you’ll be equipped with the knowledge you need to make an informed decision about going solar.
The first step is to understand what you want your commercial solar installation to achieve. What are your business goals for going solar, and how will solar help you reach them?
Before deciding on a commercial solar installation partner, commercial businesses must first understand exactly what they want to achieve with their solar venture. What are your specific business goals for going solar? Are you looking to reduce operating costs, or gain access to renewable energy? Knowing exactly what the project’s aims and objectives are essential in ensuring that the most suitable partner is chosen to bring this vision to life. Commercial solar energy offers various benefits and opportunities; assessing both them and your company’s targets will be key when selecting an ideal provider for your needs.
What federal and state commercial solar incentives are you qualified for?
If you are considering commercial solar for your business, it is essential to find a good partner that can help you understand the commercial solar incentives available in your state. Depending on where you are located, there could be several options that could significantly reduce your upfront costs and provide an attractive return-on-investment in the long run.While the federal investment tax credit is a simple 30% calculation, companies can spread the value over several years which can make different solar proposal appear stronger/weaker. Additionally, the federal depreciation benefit ultimately is determined by your internal accounting practices; solar contractors make an assumption about your tax bracket and length of time you can utilize the depreciation – ensure to ask what assumptions the contractor has made to ensure the federal tax credit and depreciation values accurately reflect if/how/when your company will
To make sure you are making the most informed decision, look for commercial solar partners who specialize in projects in your state, as this experience can prove invaluable for navigating local incentive that are anything but straight forward compared to the federal incentives. There are a multitude of additional local/state/federal incentives that may be applicable, ranging from city incentives, to the US Department of Rural Energy of America grants. Working with an experienced commercial solar partner will allow you to take full advantage of any available incentives and achieve commercial success with solar energy.
Price & Value Considerations
Look at the price of the installation and compare it to your budget. Then, look at the experience of the company and their team. Are they reputable and have they done similar projects in the past? Evaluate the financial incentives offered by each company. Which one will give you the best return on investment (ROI)?
Price is important and you want to find an offer that fits within your budget, but there are also other criteria to consider first. Evaluate the experience of the installation company and their team; reputable businesses with similar projects in their portfolio demonstrate expertise that you can trust. Finally, compare the ROI of each proposal; make sure to consider any financial incentives offered by each company because those could mean even more savings for you in the long run. Taking all these considerations into account should help you determine which partner will be best for your commercial solar project.
Key factors that will impact a proposals scope:
Site Objects and Obstructions:
Commercial solar proposals can be highly affected by the presence of nearby objects or obstructions. It is important to consider what they are, and whether they can be removed, or a system can be constructed around them. Such an assessment will allow you to better understand how your commercial solar proposal could be optimally designed and configured to maximize the system’s efficiency. Additionally, it might also uncover any upgrades that could result in improved energy production for the commercial solar array such as tree clearing that can create material deviations between different quotes.
Sunlight and Energy Projections:
When reviewing your proposal, projected production numbers are very important. These numbers are calculated through a variety of tools and software that may vary from vendor to vendor. Some production models may or may not include the shade from trees, billboards, buildings, etc. It’s important to note those that do and do not so you can better understand their accuracy. The more accurate, the more accurate your cashflow and ROI projections will be.
Also known as “production factor,” this is the relationship between the quantity to installed solar capacity to the output of kWh that can be expected. A competent contractor can help you compare multiple proposals in an apples to apples manner that standardizes the production factor, since the tree or obstruction is the same size/impact no matter which contractor is making the proposal.
Equipment:
While commercial solar equipment continues to evolve, it is important to know what products will stand the test of time. Quality and longevity of equipment are two essential attributes in commercial solar materials that should not be compromised when investing in new systems or upgrades. The most reliable way to ensure you are receiving top-quality commercial solar equipment is by opting for Tier 1 manufacturers who have had their products deployed and NEC qualified for an adequate amount of time. With a Tier 1 commercial solar system, you can trust that your customers receive reliably esthetic, efficient, and secure solutions.
It’s also important to consider the equipment manufactures bankability. Will the company be around for the long run? Long enough to their honor warranty? You want to look for Tier 1 manufacturers with a large and stable financial base – this makes them more likely to handle any issues that may arise. Of course, recalls are best to be avoided, no matter how reputable and reliable your vendor is. But if an issue does occur, you need to know that the vendor has a good track record of making things right so you can ensure long-term project success.
Energy Costs – Current and Forecasted
The combination of rising energy costs, lack of predictable long term rates, and access to and reliability of your energy are some of the driving factors for companies considering solar. When reviewing your solar proposal, ensure you ask some key questions to your potential partners:
How did you calculate the kWh value of the utility costs vs what solar offsets?
These numbers should reflect your electric bill. Make sure you have your energy bills handy when comparing these numbers. Also, most companies will account for a 3% increase in the cost of electricity each year. Obviously, no one can predict the cost of energy 5 years from now, but accounting for year over year increases will ensure you have a better understanding of the financial impact of your system and it’s ultimate ROI.
What is your approach to demand charge reductions/impact from solar?
Demand charges are a little known but important aspect of utility bills, where some commerical and industrial energy users can see upwards of 40-50+% of the cost of the utility bill as a result of demand charges. Deep analysis using load profiles, interval data, and onsite behavior can change the estimated value between different solar quotes. Genie Solar has a proprietary electric meter we install with all solar projects, and sell independently to companies looking to measure, manage, and ultimately reduce their demand charges – contact our team to learn more to see how your can benefit from our demand meter.
What annual increase/escalator was used for the utility cost and why was that number used?
The U.S. Energy Information Agency provides analysis from the state/regional/national tiers. Contractors can cherry pick figures that can make their proposal look better. Ultimately no contractor or the government have a crystal ball; worst case scenario you can ask for all proposals to have a 0% annual increase, or a standard figure based on the region you are in such as 1 or 3%.
What length of time is being used to calculate the ROI?
The standard length of time for solar quotes is looking out 25-years; this is a result of the standard solar panel production gaurentees that are 25 years, along with a comparison to the typical lifespan of power plans. Some solar modules have gaurentees extending to 30 years (keep in mind tier 1 and bankability for them to stand behind those promises). Certain solar contractors extend the value/cashflow project of solar out to 30 or 35 years which can make one contractors’s “lifetime value of solar” appear more lucrative than others simply by extending the length of the analysis.
After comparing all these factors, you should have a good idea of which proposal is right for your business goals. Choose the company that offers the best value for money and has a solid reputation in the industry.
After comparing solar companies for their quality of installation, cost-effectiveness, and customer service level, you should be ready to make an informed decision on which proposal to pick. To ensure that the best value is received, it’s important to assess the company’s track record in the industry. Is there a good reputation? Are they experienced? Have they completed successful projects? This will guarantee that your chosen solar partner has the skills and experience necessary to bring your vision to life. Make sure to pick the option that meets your goals and offers the most cost-effective and efficient solution.
Going solar is an exciting and rewarding step for any commercial business. After understanding what you want your commercial solar installation to achieve, you should start gathering and evaluating proposals from different providers. Get started now and reach out to Genie Solar Energy—the experienced commercial solar experts—for a comprehensive proposal that meets your energy needs. Let us help provide your business with clean, efficient, and cost-effective solar energy solutions.