Solar installation contracting can be good business. It’s easy to understand why. A Federal tax credit covers 30% of your client’s cost. Rebates, incentives, lease deals and power purchase agreements can reduce up-front cost to near zero. And the cost of solar arrays drops 10% nearly every year.
But solar contracting is different. Conventional construction is sold with a cost estimate. Solar jobs are sold on a forecast of cost savings. Plenty of Web sites will do a forecast of solar savings. Just plug in your numbers to get a persuasive sales packet – usually with savings in the thousands. Then total the financial incentives, rebates and credits listed for your community.
What comes next is harder: The installation contract. Why? Because with solar, the cart goes before the horse. You start with a signed contract based on the forecast of savings. Then you draw plans and do the engineering.
Why get a signed contract before plans are final? Because putting the job together takes time and costs money: approvals and commitments (utility company, HOA, building department), engineering and a site audit. Don’t start jumping through those hoops without a signed contract and a deposit.
Exactly what gets installed? Eventually there will be working drawings for your solar job. But that’s not going to happen before you ask for a signature on the contract. So your contract has to list what gets installed. Fortunately, that’s a short list: the panels, the inverters, the mounting system, maintenance and monitoring. That’s all you need to bid most solar jobs. If something changes later, be sure there’s a contract clause that covers substitutions.
Incentives, credits and rebates. Your forecast of cost savings should pile these on as deep as the law allows. But cover two points in your contract.
1. Solar incentives change and expire. Don’t guarantee any specific credit or rebate. Until the permit is issued, your client should have the right to cancel if incentives evaporate.
2. You need the right to apply for incentives, rebates and credits in the name of the owner. Cashing in on these incentives takes more time and persistence than most owners are willing to invest.
Guarantee the savings. That’s very persuasive when it comes time to sign the contract. Your guarantee doesn’t carry much risk (if done right) and creates extra solar business: Make the guarantee contingent on annual maintenance and monitoring by your company.
The service entrance panel. This is where even experienced solar contractors stumble. The existing breaker box is always a question mark when planning a solar job. Either it needs major work or it doesn’t. Replacing the existing box can add $2,000 to a residential solar project. Your contact has to cover the contingencies.
Warranty. Residential solar jobs are residential construction. The warranty in a solar contract has to comply with state law for home improvement work, just like everything else in a solar contract.