A colleague of mine recently invited a solar company to his house to give him a quote for solar.
The sales pitch referred my colleague to a Californian government website that stated that the average cost of installing solar panels in California is $5.25 per watt.
The salesperson then quoted a system at $4.70 per watt and used the government website to justify that it was a good deal that my colleague should take.
I found this interesting because I had seen discussion on solar panel forums about system prices in the range of $3.50 to $3.70 per watt.
This difference may not sound that much but for an average 6kw residential solar system this is an $8,750.00 difference in price.
The feedback from the forums seemed to be supported by the www.solar-estimate.org website. This is a website that houses the best solar panels payback calculator and allows a consumer, if they enter their details, to see market pricing for solar systems in their area.
This site suggested that market prices seemed to be in the range of $3.80-$4.20 per watt in California, nowhere near the $5.25 per watt quoted on the government website.
The solar-estimate.org data seems likely to be accurate because that site collects pricing data from estimates given by around 200 solar installation companies around America.
As such I took a closer look at the data on the Californian government website and I realized that this data is being skewed up by the reporting of solar Power Purchase Agreements (PPA's).
With a solar PPA the solar company retains ownership of the solar panels that are installed on your house. They pay to install the panels and just sell you power at a lower rate than what you are paying.
Vendors of these power purchase arrangements tend to over state the cash price of the system because they want to encourage people down the PPA path and also to maximize the value of the tax credit they can pass along to their investors. (There is a 30% solar tax credit on solar systems).
All this is fine except for the fact that this inflated price data is being used by salespeople to trick consumers into thinking their quote is better than market rates.
If you investigate the government website further it states in their notes that the statistics are skewed by the third party owned installations that are reported. However, most consumers don't dig that deep and can be misled by the headline data on this website.
Openpv.org website is run by the National Renewable Energy Laboratories (NREL) has the average cost of installing solar panels in California in the last year at $4.53 per watt but with very little recent data in the database.
In response to this, and in the interests of better protecting consumers, SolarReviews.com has published the most comprehensive and readily searchable database of solar pricing ever made available in America. It has obtained this data from the www.solar-estimate.org and www.solarpaneltalk.com websites.
It is based on more than 250,000 estimates given by the solar-estimate.org website, the live pricing signals it gets on a daily basis form approximately 200 solar companies and quotes uploaded by consumers on the SolarPanelTalk.com forum.Tweet