So, you have googled solar once in your life and next minute, you are getting a million ads for 6.6kW solar systems for stupidly low prices?
Then, when you get another quote for the “same” 6.6kW solar system it is four times the price.
This is one of the biggest challenges when navigating the world of solar.
The wild price variability. These low prices are driven by a few key factors.
There aren’t heaps of moving parts when selling solar systems. The key components are:
- The quality of gear being installed
- The quality of the workmanship
- The cost of running their solar business
The cheaper the system usually means one, some, or all of the above have been impacted to achieve this.
The quality of the gear being installed
The quality of the gear being installed can have a huge impact on the cost of the system. With the growth of renewable energy there has been a lot of new manufacturers into the industry to try and get a slice of the pie. This can make it hard to work out what is good and what isn’t.
We thought about putting brands in this guide we like and brands we don’t however with the market changing so much we thought it wasn’t the right thing to do.
Instead, do some research on the brands you have been quoted. Consider things like:
- Who actually owns them?
- Where are they based?
- Do they have an office (an actual office not just a virtual address) in Australia?
- How long have they been around?
- How long have they been around in Australia?
- What is their performance warranty?
- How long is their product warranty?
Once you have considered the above, you will be in a position to make a much more informed decision on the quality of the company behind the gear being quoted.
Industry secret! Watch out for “substitution”.
Substitution occurs in business all the time. A lot of the time, rightfully so.
What happens is, a part quoted is not available so another option that is a fair and reasonable equivalent is installed. Seems fair right? That is because it is.
HOWEVER! Sometimes, less reputable companies will use substitution to take you from a high quality quoted product and switch you into crappy low grade panels or inverters that are cheaper for them and not a fair and reasonable substitute for you. That is how that super cheap price existed in the first place.
It is called “bait and switch”.
So, how does it actually happen?
The day of installation comes, you get a call telling you the panels aren’t available but they have worked hard and sourced you these other ones that are just as good. All is well and they want to wrap the conversation up as quickly as possible.
The best thing to do is say no, you aren’t comfortable with the new substitute until you can confirm it is a fair and reasonable option. With a bit of research you will quickly be able to work out if you are getting a fair option or not.
Don’t let substitution scare you, just be aware of it.
The quality of the workmanship
Workmanship is vital when getting a good solar system. This thing is going to sit on your roof for years and years to come generating energy for your home to use. The last thing you want is someone who isn’t skilled slapping it up without the care and attention it deserves.
Given the cost of quality tradespeople can be significantly higher than that of unskilled workers, lots of companies will cut corners on workmanship anywhere they can.
When you see super cheap system prices, chances are they are using super cheap workers to complete the job. The question is not what is the cost of this now, but what could this cost you in the future?
The cost of running their solar business
Running a business isn’t cheap. Everyone usually knows that, but what is the TRUE cost of running a high quality solar business.
The answer is a lot. Just some of the costs required to run and install a solar business are:
- Licensing fees
- Staff and salaries (think administration, sales, operations, electricians etc)
- International freight and logistics
- After sales service (this is a big one!)
- Connection fees and charges
When we read the above, we wouldn’t want a solar company going cheap on any of these. They will have a massive knock-on impact on the work they do and the systems they sell which will only end up costing you.
So, the question you need to ask yourself is: “If my system is so cheap, what of the above are they skimping out on?”
The problem is, you will probably never know until it is too late and you find out the hard way.
What should a system cost?
There is no golden rule for what a system should cost. However, we like to use a rule of thumb that a decent system should cost around $750 – $1250 per kW of installed solar AFTER STC’s (we cover this off later) have been applied.
All of the above we have covered will impact that price coupled with your negotiation skills. Anything cheaper starts to head into scary cheap territory and anything more expensive could start to be considered overkill.