Solar contracts can have jargon, which can sometimes be difficult to understand. A good solar installation contract will protect you and your solar provider, but this doesn’t mean that you should stop understanding solar contracts.
You need to know if what you’re getting is worth the contract. This is why it is important to pay special attention to any language that connects you with the installation company and states what tasks that company will do for you. This guide will offer a clear walkthrough of the prerequisites of signing a rooftop solar energy contract.
Solar Power Contract
A solar power contract is forged between a solar power installation company and a person. It clearly states all the stages of the solar panel installation process. Solar energy contracts can vary depending upon the pricing of that solar panel installation. The contract will differ for people who are leasing, loaning, and paying cash upfront for the contract.
Important Elements
There will be many differences between solar contracts, but most will contain certain commonalities. These will be the basic principles of a solar panel installation contract:
Installation Overview
This has everything you need to know after you sign the contract. Solar panel installation comprises multiple steps. The contract should include the company/person responsible for the following details:
- Interconnection.
- Inspection.
- Installation.
- Estimated installation date.
- Permitting.
Your solar panel installation company can’t start working on your roof until they have the electrical work or construction permits for your living area. Then you’ll require approval from your local utility company so that you can connect your solar power system to the electrical grid.
This is called interconnection. Establishing interconnection and getting permits are hectic tasks. However, a good solar panel installation company will review this process.
System Overview
This highlights the specifications or important details of your solar energy system like:
- Battery storage.
- The location of panels.
- Inverter specifications.
- Panel wattage (ideal power conditions).
- Warranty for inverter and panels.
- Ancillary parts and equipment.
- The number of solar panels and their type.
Savings and Energy Production
This section will outline your average energy production while including your yearly home electricity consumption before installing solar. Solar panel systems with a battery storage system also have information about time-of-use rates, energy storage capacity, and net metering.
Financial Overview
This part will cover costs like:
- Material cost.
- Average cost savings over the system’s life (25 years).
- Installation and labour costs.
- Upfront costs.
- Inspection and permitting costs.
- Your payment type for the system (loan, lease, or upfront).
- Yearly solar output (kWh).
- Other solar incentives.
- Adjustable or fixed rate.
- Tax incentives and tax credits.
- Rebate information.
Third-party loans won’t be mentioned in your solar contract. So, read the contract thoroughly, including all the financing details.
Electric Details:
Many contracts include annual solar output and energy usage. This will let you know if you have the right system size for your needs. The factors that will help determine this are:
- Your plan to buy an electric vehicle or any new appliances in the future.
- The efficiency of your home appliances.
- The size of your home.
- Energy consumption habits.
Savings:
A few contracts will also include your expected average monthly electricity savings. Some may also have an estimated monthly utility bill after your solar panels generate electricity. The savings are dependent on a few factors:
- Fluctuating electricity rates over time.
- Energy consumption.
- Electricity rates and net metering programs near you.
- Monthly service fees.
- The sunlight received by your solar panels.
Billing Overview
This part of the contract will explain the billing relationship between your utility company and you.
Net Metering:
Net metering is the best way to increase your savings with solar panels. You should look for net metering programs in your area. Net metering works by selling the excess energy that your solar panels generate to the utility grid in exchange for credits which can be used to lower electricity bills.
Maintenance and Warranty
This section will give you a detailed overview of your solar panel system’s coverage. Read the document slowly and carefully to understand everything. You should know what your warranty can and cannot cover. Also, examine the maintenance or repairs section.
Legal Provisions
Cancellation:
All things that pertain to cancellation will be listed here. For example, if either party does not live according to the deal, the contract will be cancelled. This goes both ways; either you have not done something required of you, or your solar installer has left something incomplete. Reimbursement will follow cancellation on the part of the side which has broken the contract terms.
Termination:
A list of all situations in which you can legally terminate your solar panel contract. There will always be a deadline in the contract after which you can no longer opt out.
Arbitration:
This will highlight all the issues you can use to bring in a mediator to solve any disagreement outside of a court setting. Anything can go wrong during the installation process, and you are advised to demand arbitration before going to court.
Waivers:
A waiver helps you give up your right to claim something. Check your contract for all waivers. If there are any waivers you don’t agree with, then amend the contract before you sign it or just don’t sign the contract.
Evaluation
When signing a solar contract, consider every provision and be satisfied with everything. This way, there will be no disagreement later on. If you have any disagreements, then settle them before signing the contract.
After understanding all the sections, compare contracts with other solar companies to gauge the best offer. Don’t sign just because of a low upfront price. Also, look for the benefits and if the contract meets your home’s electricity needs.
Be sure to check all the things mentioned under warranty since solar panels last for 25 years, so you need to have some assurance on the long-term health of your system. Just know that you are buying the system for yourself, so it should have everything you want to meet your needs. Don't hesitate to find the best fit. Reach out to your solar company and ask questions until you’re satisfied. If not, simply move to another company.