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Solar Due Diligence

By Mark Becker
| March 28, 2014

“Bring me data, and bring me documentation of that data”. Solar customers should take this approach with solar contractors providing them proposals. A solar PV proposal is a detailed financial transaction that utilizes many criteria to arrive at the estimated savings. Guaranteed kilowatt production numbers, warranty information, annual kilowatt production information, and shading information are just a few bits of the data provided to a consumer in a comprehensive solar PV proposal. However, the consumer rarely asks for the documentation as to how the contractor arrived at their data.

Every bit of data needs to be backed up by solid documentation. If your solar contractor balks or is unable to provide the requested documentation to you in writing, then you’re not getting the customer service you deserve. If you cannot get the documentation you deserve, it’s logical to suggest that the proposal provided should not be considered an accurate proposal, or an accurate summary of financial savings and product quality. Financial savings generated by a solar PV system are predicated on many criteria, none of which can be shortcut. The average consumer needs to perform a significant amount of research to determine the validity of a contractor’s solar PV proposal. Considering the behind the scenes complexity of a solar PV transaction, why is it that this portion of the solar industry is unregulated, and that the onus is “buyer beware”, especially in leased solar program contracts? Simply put, it’s in the contractor’s and financier’s interest to make their proposal look the most appealing to the consumer in order to make the sale. Solar PV energy systems can and do save homeowners and business owners hundreds of thousands of dollars. When I take out a car loan, or buy a CD at a bank, regulators oversee the process. Why is it any different when a contractor generates solar financials and models financial savings for a consumer?

Finally, third-party financed program I can believe in: Power Purchase Agreements (PPA’s) are nothing new, and are in my opinion, exceed the benefits of a solar lease program. In both programs, the financing company owns the system and banks the majority of the savings. I believe a PPA is a superior product because the home or business owner simply pays for power that the solar system generates. A properly modeled and contracted PPA will never put a homeowner in an “upside down” cash flow situation because of low output of the solar system. In a PPA, the bank has a vested interest in ensuring the PPA system produces the most power it can; they make money on each kilowatt generated and the customer saves money on each kilowatt consumed. In comparison, the bank owners of a leased solar system make money on the monthly equipment lease; should kilowatt production fall the lease payment remains the same. In all solar contracts, insist on documentation for all the data.

Mark Becker, President of GoSimpleSolar, by Semper Fidelis Construction Inc.