the Cost of a System

How much you pay for your system is of critical importance in determin-

ing whether the investment is worth it, of course. You want to get the most

output capacity for the least net price. The business is competitive, so find-

ing the lowest price should be straightforward; just get a number of bids from

reputable contractors.

Prices fluctuate quite a bit from year to year, and even from month to month.

Subsidies and rebates change, and market conditions affect availability of

panels, in particular. The price of inverters holds steady, as does the price

of the support equipment. Contractors will lower their prices due to heavier

competition, and the trend is toward lower profit margins because so many

new contractors are entering the game. Expect to pay anywhere between $4

per DC watt, up to $6.50 (this assumed the 30 percent Investment Tax Credit

(ITC) is in place, which there are no guarantees). Economies of scale aren’t

a major factor. If you buy a system with double the size, expect around 190

percent price increase. A major portion of the contractor’s added value is in

fixed costs, which are county permits, travel to and from the site, and so on.

 Some contractors quote prices per DC watt, and some use AC. Because the DC

number is larger, it makes the per watt price look smaller. To make matters

worse, there are different measurement standards that can result in different

per watt prices, even though the quoted systems may be identical in techni-

cal terms. Ultimately, what you’re interested in is the cost per kWh over the

lifetime of the system, which can be very tricky to calculate because of the

way rate structures work (see the earlier section “Types of rate structures” for

details). If at all possible, get contractors to bid the same exact system, with

the same mounting arrangements and support hardware. Then you can com-

pare apples to apples.

If you choose to install the system yourself, you’ll save labor costs, but you

may have to pay more for the equipment because contractors can buy it in

huge quantities and get discounts that they pass on to their customers.Knowing what a contractor can do

Every contractor uses a standard contract and follows approved practices.

You always have the right to negotiate; contractors always have the right to

refuse. You can engage a contractor at any point in the project, but most are

very reluctant to come in after you’ve done half the job (or if they do, they’re

inclined to charge a lot and smirk at your ignorance). Most want to be a part

of the design, which may or may not cause problems. You can hire a contrac-

tor to do an entire project, or just parts of it.

Here’s an interesting angle to consider. Contractors buy equipment and parts

in bulk, so they can get a better price than you (theoretically). It may turn out

that they can do the job for less than you can do it yourself simply because

they can buy equipment so much cheaper than you can. By the time they add

their labor expenses, the difference is still in their favor. While it may be com-

pelling to do a job yourself, due to the personal satisfaction, it may actually

cost you more.

 You can save money by negotiating to do any of these items yourself. You can

do a design and find a contractor who will build accordingly. Or you can be

responsible for keeping the work site clean, and you can probably come to an

agreement that you assist on the job as much as possible. You may even find a

contractor who’ll let you do all the actual work but who will do the drawings,

permits, and inspections for you.