Why Dollars Per Watt Is the Wrong Way to Buy Solar.

Everywhere you go you see solar advertised for a certain “dollars per watt”. There is a very good reason for that. All solar companies purchase their equipment and supplies based on “dollars per watt” so it’s perfectly natural that they sell on the same basis.

However, as a buyer, you care (or should care) about the production of electricity not the cost of the equipment. Buying on a cost per watt basis is no different than someone making widgets for you and sending you a bill based on how many employees were used to produce the widget.   You don’t care how many people it takes to make it, you are only concerned with the cost of a finished widget. Similarly, “dollars per watt” is the equivalent of paying per employee rather than paying per finish piece.

What you should be concerned with is the cost of Kilowatt Hours (kWh) that the system will produce. The number of kWh produced can be reliably estimated with PVWatts, a program produced and maintained by the National Renewable Energy Laboratory (NREL) which is part of the Federal Department of Energy (DOE). PVWatts use weather averages for 50 years or more to estimate the amount of solar radiation that will fall on particular part of the country “on average” every year.  A responsible and honest installer will use this program to show exactly what a particular system will produce. The output can be customized to reflect the relative efficiencies of the various parts of the system. You should take that output and divide it into the total price you are being asked to pay to determine the “price per kilowatt hour”.

Without doing this comparison, you allow an installer to use the cheapest, most inefficient products and charge you the same as grade A products produce. The result is you get less production for the same dollars.  Here’s 3 ways to protect yourself:

  1. Always to ask for referrals and actually call them and talk to someone about the installer you plan to use.
  2. Get a copy of the PVWatts print out that the installer used to estimate your system production.
  3. Do the math and know what you are actually paying for a kWh produced.

All Solar is not the same despite what some installers would like you to believe. Know the facts, do the math, make an informed decision that will allow you to get the maximum output for your hard-earned dollars and take advantage of the new emerging technologies that greatly increase production.

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