Estimated reading time: 4 minutes
The solar industry is rife with abusive pricing models.
For most companies, the price they're charging is directly tied to the benefit solar offers. When customers have greater solar coverage or higher electricity rates, traditional solar companies charge more. . . even if their costs are the same.
These abusive companies use your utility bill to price as high as they possibly can while still saving you 10–15%. This approach makes the customer feel like they're being offered a win-win opportunity; but in reality, people are way overpaying for solar.
Imagine the Ford F150 Lightning EV was being sold at different prices based on customers’ potential fuel savings. If you travel a lot or live in an area with high gas prices, you pay double for the same truck than someone with a shorter commute or lower gas prices.
Sounds pretty outrageous, right?
The pricing difference isn’t justifiable–the vehicle and its production costs are the same, regardless of how much the customer would save by switching to an EV.
While this example is far from perfect, this discrepancy happens ALL THE TIME in solar. Unfortunately, companies take advantage of homeowners’ situations.
At Project Solar, we believe in flat pricing—the same pricing for all. We don't manipulate our pricing based on high utility rates (looking at you, California).
Flat pricing is hard, though–particularly with solar.
We couldn’t just charge everyone the same price. A homeowner paying the same price for a system that is half the size of his neighbor’s would be obviously unfair technically be equal pricing–but it’s obviously not fair.
In order to have equitable pricing for all, we had to price based on the lowest denominator. We needed solar to make sense—even in states with the cheapest utility costs or most mediocre sunshine.
The standard model of door-knocking sales reps making $300k/year simply did not work with our goals. To make our flat and fair pricing a reality, we needed a breakthrough in efficiency: we needed the internet.
This is how Project Solar was born.
Our Pricing
Unfortunately, solar projects can get a little bit complicated. Since each customer’s system is unique, there is variability in the raw cost of going solar.
There are many fixed costs for a project, such as the site design, engineering, and electrical hook-ups. As system size increases, these fixed costs stay the same, while equipment and installation costs go up with quantity.
These fixed costs staying the same means that the comparative price, the price per watt, should go down the larger a system gets.
Think of grocery shopping: if you purchase a large box of cereal, a smaller box of cereal will cost less. However, the comparative price in this situation–price per ounce–is less when purchasing the larger box, because the manufacturer isn’t paying too much more to make a larger cereal box.
This is the basics of economies of scale.
To maintain a fair and flat pricing model, we therefore need to charge customers on a “sliding scale”: where smaller systems are more expensive per watt and larger systems are cheaper. In other words, spreading fixed costs over a bigger system should result in a lower price per watt.
Our pricing is as simple and fair as possible:
We start with a base cost per watt. This cost includes all the equipment and installation costs (if applicable).
Since labor rates vary by state, this base cost can fluctuate for Full Service Install (FSI) customers by around $0.50/w, depending on location. If you install DIY, you’ll be providing the labor, which means your base cost will be fixed irrespective of state.
After this base price, the variable overhead cost is added, which pays for our staff, marketing, software costs, etc.
The variable cost reduces as systems get larger to ensure our margins on your project stay low regardless of your system size. This in turn makes pricing fairly proportionate to the upper and lower bounds:
|
State |
4kW Price Per Watt |
40kW Price Per Watt |
|
AZ |
$2.75 |
$1.80 |
|
FL, AR, TX |
$2.82 |
$1.87 |
|
ID, NC, OK, OR, SC, UT, WA |
$2.92 |
$1.97 |
|
GA, NM, WI |
$2.97 |
$2.02 |
|
CA |
$3.00 |
$2.05 |
|
CO, VA, CA |
$3.02 |
$2.07 |
|
MD, NV, OH |
$3.07 |
$2.12 |
|
IL, PA, PR |
$3.12 |
$2.17 |
|
MA |
$3.24 |
$2.29 |
|
ME, NJ |
$3.27 |
$2.32 |
|
CT, RI |
$3.29 |
$2.35 |
|
DC, NY, VT |
$3.32 |
$2.38 |
|
NH |
$3.34 |
$2.40 |
|
DE |
$3.37 |
$2.42 |
|
DIY Install (regardless of state) |
$2.19 |
$1.43 |
For illustrative purposes, we’ve shown a price scale for 4kW through 40kW, even though our sliding scale is infinite. The vast majority of customers install systems within this range.
Every customer is equally valued in our eyes–we don’t care how much energy you use, or what system size you decide to get. Our thin margin will stay the same either way. Simply put, we make the same dollar amount (not percentage) regardless of state or system size.
For example, let’s examine some pricing in California:
|
System Size |
5kW |
10kW |
25kW |
50kW |
|
Approx. Panel Count: |
11 - 12 |
23 - 25 |
58 - 63 |
116 - 125 |
|
Full Service Install Price: |
$13,350 |
$23,950 |
$51,813 |
$96,063 |
|
FSI Price Per Watt: |
$2.67 |
$2.40 |
$2.07 |
$1.92 |
|
DIY Install Price: |
$10,350 |
$18,250 |
$38,300 |
$69,550 |
|
DIY Price Per Watt: |
$2.07 |
$1.83 |
$1.53 |
$1.39 |
NOTE: These prices per watt reflect what we actually charge and do not take into account state and federal incentives. Those incentives belong to you, are designed for you, and we do not charge more based on them. An average DIY install is less than $1.40/watt after incentives.
Though a 50kW system is rare for a residential installation, this chart shows that as system size increases, price per watt proportionately decreases, giving you the best possible deal.
Most importantly, our profit margin stays the same.
We have no incentive to under/oversize your system based on your utility costs, because our pricing is set and proportional to everyone.
By aiming to maximize savings and Return on Investment (ROI) for our customers, we believe that our company will thrive.
How to Analyze ROI From a Solar Project
We like to focus on a solar project's return on investment (ROI).
Other companies like to make ROI claims that have been calculated in many different ways and often with many assumptions about how utility rates and home values could increase over 20 years.
We determine ROI more simply by calculating as follows:
[year 1's energy cost saving / cost of going solar]
For my house (Project Solar CEO), it looks like this...
15899 x 0.14 = $2,225.86
That is $2,225.86 saved a year on a $12,688 investment. Or a 17.5% ROI.
This ROI beats S&P 500 averages, real estate, and most other investments in both total return AND stability. This return doesn't even take into consideration how your home value will increase with a solar system–which conservative estimates place this value at around $2.50/watt.
So, let's take this example one step further and say that I plan on moving in 5 years.
Total savings over 5 years: 5 x 2,225.86 (yearly savings) = $11,129.30
Home value increase: 2.5 x 9,900 (system size, in watts) = $24,750.
Total return = $11,129.30 + $24,750 - $12,688 (original investment) = $23,191.30
ROI = [$11,129.30 + $24,750] / $12,688 = 283%
When you install solar, you can almost triple your investment in 5 years, basically earning you a place amongst the Wall Street elite as a premier money manager. Congrats!
We’ve built a solar calculator that does a substantially more complex calculation than the above.
It factors in your unique roof characteristics, such as available square feet, pitch, angle, shading, solar azimuth, historic weather patterns, and more. We also examine your local utility rates at different times of day, the electricity buy back rate (NEM rate), and the impacts of batteries (if you chose to add them).
These calculations are done programmatically, pulling from various government and 3rd party data sources. This service is offered free to everyone without the need to input your phone number or talk to a sales rep.
We tell you, upfront, the price of the system and corresponding savings to go along with it. Check it out here.
Possible Additional Costs (Adders)
There are a few things that can increase your project's price, like a rare roof type or an electrical panel that needs updating. In the interest of transparency, we provide a full list of these possible additional costs prices are before the 30% federal incentives.
| Site Survey (if you are unable to provide pictures) | $200 |
| Metal Roof* | $0.10/watt |
| Roof Pitch ≥ 35° (For CT,CO,DE,GA,MA,ME,NC,NH,NJ,NY,IL,OH,PA,RI,SC,TX,VT and WI projects) |
$0.12/watt |
| Roof Pitch ≥ 30° (for all states not listed above) |
$0.12/watt |
| Flat Roof (<10°) | $0.24/watt |
| Critter Guard ⓘ What's this? | $0.05/watt |
| Attic Run (Shingle) | $0.05/watt |
| Attic Run (Tile) | $0.15/watt |
| 200A/225A Main Panel Upgrade ⓘ What's this? | ≈ $3,000 |
| 400A Main Panel Upgrade | ≈ $5,000 - $15,000 |
| Main Breaker Derate/Install ⓘ What's this? | $300 |
| Add Subpanel/ Subpanel Relocate ⓘ What's this? | $800 |
| Line Side Tap/Load Side Tap | $450 |
| Meter Service Drop + Meter Upgrade ⓘ What's this? | ≈ $500 - $5000 |
| 4 or more planes | $300 |
| Outside Install Area (Travel Adder) Tier 2 |
$1000 |
| Outside Install Area (Travel Adder) Tier 3 | $3000 |
| Same Day Install Cancellation | $1000 |
| 4kW or less system size* | $1,000 |
| Enphase IQ 5P, backup configuration ⓘ (with System Controller, includes installation)* | $8,750 |
| Additional Enphase IQ 5P Battery, backup configuration ⓘ (without System Controller, includes installation)* | $5,750 |
| Enphase IQ 5P, consumption offset configuration ⓘ (only available with select utilities; includes installation)* | $4,750 |
| Additional Enphase IQ 5P, consumption offset configuration ⓘ (only available with select utilities; includes installation)* | $4,750 |
| Tesla Powerwall 3 (includes installation) - CA and AZ* | $10,550 |
| Additional Tesla Powerwall 3 (includes installation) - CA and AZ* | $9,250 |
| Tesla Powerwall 3 (includes installation) - All other states* | $12,750 |
| Additional Tesla Powerwall 3 (includes installation) - All other states* | $9,250 |
| Electric Vehicle Charger | $1,500 |
| Enphase CT Consumption Meter (pricing assumes factory wiring as sufficient, otherwise adder will be refunded/re-quoted based on additional work required) ⓘ What's this? | $400 |
*Auto included in the Project Solar quoting calculator if applicable.
