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The way in which SolarReviews scores solar companies is not simply calculated by taking the average of all review scores, as this "review average" would not properly represent the trustworthiness of a company. For example, if a simple average was used, companies with only 1 review of 5 stars would be the top-ranked companies. It makes sense that a company with over 100 reviews and a 4.7 rating should rank higher than a company with only 1 review at 5 stars. To combat this dilemma, SolarReviews uses what is called a "Bayesian Average". This is the industry standard for calculating review scores.
With a Bayesian Average, every solar company starts out with 5 "empty" reviews, each with a score of 3.5 stars. When the first real review comes in, it is averaged against the 5 existing "empty" reviews. This means that if the first review is 5 stars, the total review score will be the average of:
This is to ensure that a company with, say, only 1 review of 1 star, would be ranked higher than that 1 star, and a company with 1 review of 5 stars would be ranked lower than 5 stars. The goal is to accurately reflect reviews by rewarding companies that are able to achieve consistently high scores over a large quantity of reviews. Over time, if a company has hundreds of satisfied customers who leave 5-star reviews, the score will get closer and closer to a perfect score (5 stars).
Another important factor that needs to be taken into account is the recency of reviews. The goal of coming up with a review score is to determine a company's trustworthiness. A review posted less than a year ago is a better indicator of a company’s trustworthiness than a review that is over 3 years old. Therefore, the reviews are weighted as follows:
The combination of the Bayesian Average and review recency weighting provides the formula for the SolarReviews rating. Solar companies that are able to garner a large quantity of highly-scored reviews in the past year will have the highest-ranking scores.