Don’t Let this Happen to You!
Fly by night solar companies are on the rise in Iowa. These out-of-state companies are often little more than slick marketing and sales operations. They usually have no staff in Iowa. As a consequence, they often do not understand Iowa’s utilities and net metering policies and they lack the ability to offer in-person customer service.
Customers have told us about installers walking off the job mid-construction, solar companies going bankrupt after receiving payment, and financial projections based on faulty information.
In one case, a customer asked us to review one of these company’s proposals. The proposal showed a savings of $2,500 over 20 years. Our calculations showed that the customer would have actually lost $4,500 over 20 years if he had gone ahead with the project.
The reason for the $7,000 discrepancy? The solar company’s projections included annual net metering, but the customer’s utility, a rural electric cooperative, only offers hourly net metering.
Download our 2022 Guide to Investing in Solar
Why Net Metering is So Important
Net metering is one of the biggest potential pitfalls when working with out of state solar companies. Iowa has many utilities with many different net metering policies. It is critical that your solar company understand the implications of these policies.
The Iowa Utilities Board (IUB) requires investor-owned utilities – Alliant Energy and MidAmerican Energy – to offer net metering that resets on an annual basis. This works well for solar energy.
However, the IUB has limited authority to regulate municipal utilities and rural electric cooperatives (RECs). Some of these utilities offer annual net metering tariffs. Others provide much more limited forms of net metering, or none at all. Many RECs and municipal utilities offer net metering that resets monthly, daily, or even hour-by-hour. Monthly net metering can sometimes work for solar, but daily or hourly rarely does.
Vet Your Solar Company
It’s important to vet your solar company. Look at their past projects, have them walk you through their financial projections, find out what they are responsible for, and carefully review the contract.
Evaluate their portfolio
Reputable solar companies should have an established body of work in your area. They should be able to point you to a record of their past projects. These could be case studies, blog posts, social media posts, YouTube videos, or writeups in the media. Award winning projects and recognition from solar industry trade publications are even better. They should also be able to put you in touch with other customers, if requested.
Have them walk you through their financial calculations
Solar can be an excellent investment – but a few factors are critical to your return on investment. One such factor is your utility’s net metering policy. Another is the solar investment tax credit (ITC). Your solar company should be able to walk you through their financial calculations, taking into account your utility’s net metering policy and your income tax exposure.
Solar companies should make the total system cost clear – even if you plan to finance the project. Financing is a great option for many customers, but it can also be an opportunity for unethical businesses to disguise the total system cost.
Many solar companies that offer financing will say something like, “Your new electric bill plus your financing payment is less than your old electric bill.” If the financial projections are accurate, that’s an honest sales pitch and a good reason to choose solar. When the financial projections are wrong, however, customers will be locked into 20 year loans that will not save them any money.
Consider seeking a second opinion from another reputable solar company and run financial projections by a qualified accountant.
Find out who is responsible for what
Before signing a contract, make sure you understand exactly what your solar company will provide. Are they pulling permits for construction and electrical work? Will they file the interconnection request with your utility? Will they work with your utility to get permission to operate (PTO)? Will they handle or help with the solar ITC paperwork?
Ideal Energy and other top tier solar companies offer turn key solutions and handle all of that.
Find out who is accountable
Customer service is important with an investment as significant as solar energy. Does your solar company have a physical business location in Iowa? In the event that your system ever needs maintenance or repairs, who will provide those services?
Solar installations are construction projects and your solar company is the general contractor. If you’re not comfortable hiring a contractor located across the country to build an addition on to your home, you may want to think twice about hiring a faraway solar company, as well.
Review the contract carefully
The contract should spell out when payments are due and how milestones are structured. It should provide assurances around permitting, insurance, and responsibility for project completion and permission to operate. Warranty coverage, if any is offered, should be clearly spelled out in the contract. Your solar company’s responsibilities as general contractor should be clear, as well.
Ask Us to Review Your Proposal
Have a proposal from another company and want a second opinion? We’re more than happy to help – at no charge.
