PRICE PER WATT
Level Of Importance #6
Why Is It Important ?
Price per watt is a quick and easy way to compare two identically sized and equipped solar systems. To calculate price per watt, simply divide the price of the system before rebates and other government incentives by the wattage of the system.
For example if system (A) consisted of a 5.0 kilowatt system that was priced at $19,020.00 then system (A) would have a price per watt of $3.80 per watt. If system (B) consisted of a 5.0 kilowatt system that was priced at $20,230.00 then system (B) would have a price per watt of $4.04 per watt.
If both systems included identical solar panels, racks and inverter that were made by the same manufacturer, then obviously system (A) would be the better buy.
If system (B) included an inverter with a higher efficiency rating that gave you a bigger rebate and more power production over the life of the system and heavier duty mounting racks and solar panels with a longer warranty, then system (A)'s lower price probably no longer makes sense.
Price per watt only makes sense when your comparing apples to apples. Meaning same size, same manufacturer, same model and same warranty. If you're using price per watt to compare apples to oranges and it's the only tool that you are using to make your comparison, then it's real easy to get caught up in the "price equals value trap" and forget that your buying a product that should be designed and built to provide you with 30 to 40 years of service.
When It Comes To Buying A Solar System, Value Is Not Measured By Pricing Alone.
No two solar systems are created equal. Differences that may appear to be minor on the surface can mean the loss of tens of thousands of dollars worth of avoided utility bills over the 30 to 40 year life expectancy of a typical solar system.
When shopping for a solar system, you may find pricing that's 15 even 20 percent lower on non name brand solar panels that have been manufactured by tiny, non publicly traded, overseas manufactures that has a small likelihood of being here 25 years from now to honor their warranty. But over the long haul, any savings that you earn now will be absolutely worthless if your system provides you with 30 to 40 years of inferior performance or your left with non working equipment and no warranty to protect your investment.
Here's The Tale Of Mr. Frugal To Help Illustrate Our Point.
The following fictitious
example is based on a compilation of actual events that we have witnessed over
the past 11 years. Obviously the names and the events depicted here differ from
the original occurrences, but are representative of actual past situations.
Mr.
Frugal buys his solar system from a local solar dealer that just opened up in
town. Due to inexperience and maybe a little bit of greed, this dealer convinces
Mr. Frugal that he can save $2,500.00 by purchasing non-name brand solar panels
instead of name brand product that has been manufactured by a large publicly
traded company. The dealer installs the solar system and the system begins
spinning the customer's meter backwards.
Three
years later Mr. Frugal notices that his electric bills have risen. There have
been no dramatic electric fee increases so he calls his solar dealer and finds
that the dealer is no longer working in the solar industry and has gone back to
his previous profession of installing windows.
Mr.
Frugal needs answers so he picks up the yellow pages and finds another local
solar dealer. The new solar dealer arrives at Mr. Frugal's home and inspects Mr.
Frugal's solar panels. What he discovers is that nearly half of the solar panels
have suffered from high voltage arcing which caused by an open circuit between
several cells due to cold solder joints during the manufacturing process.
Mr. Frugal calls the initial solar dealer who is now in the window business and
asks him for the solar panel manufacturer's phone number. The ex-solar dealer
now window dealer provides Mr. Frugal with the only phone number that he has for
the manufacturer but unfortunately the number has been disconnected. After weeks
of research Mr. Frugal determines that the manufacturer has gone out of business
and that his solar panels no longer possess a warranty.
Mr.
Frugal decides to pay the dealer that he found in the yellow pages to remove the
defective solar panels and replace them with new solar panels only this time he
decides to buy name brand solar panels that are from a large, publicly traded
company but there's a problem, no other solar panel on the market will fit on
the solar panel mounts that are bolted to Mr. Frugal's roof so the solar
installer informs Mr. Frugal that his solar panel mounts will have to be
re-arranged or replaced.
The
cost to remove the defective solar panel and purchase new solar panels and have
them installed: $16,000.00. The cost to re-arrange the solar panel mounts and
purchase extra rails and mounting clips: $1,400.00. Grand total $17,400.00.
After
completing the lengthy removal and re-installation process the installer turns
on the system and to Mr. Frugal's dismay, nothing happens. As it turns out the
excessive arcing caused by the solar panels damaged Mr. Frugal's inverter to the
point that it was more cost effective to purchase a new inverter rather that
have it repaired so Mr. Frugal was out an additional $2,400.00 plus an
additional $250.00 removal and installation fee from the installer. New grand
total $20,050.00 !
Mr.
Frugal saved $2,500.00 up front by purchasing non-name brand solar panels but it
cost him $20,050.00 to correct the resulting problems which resulted from his
decision to save money by buying non-name brand solar panels.
It's
been two years and Mr. Frugal has all but forgotten his solar nightmare when one
day he notices that his electric bill has once again shot skyward. It appears
that the remainder of the non-name brand solar panels that he did not replace
have also failed. What of the name brand solar panels that Mr. Frugal added to
his system ? They're doing just fine......