1.  Do they use subcontractors?

Many home improvement contractors have migrated to business models where they use various subcontractors to do the work on a project. Solar is no different and, to some extent, more challenging as there are many companies who use subcontractors to both sell solar and then to install it.

Whether a solar contractor has their staff both selling and installing solar is one of the most critical considerations when choosing a solar contractor. Solar contractors who have their own employees both selling and installing can better control the quality of the work, are able to communicate more effectively with homeowners and are invested in the project from start to finish.

On the other hand, when a solar contractor essentially buys your project from a mercenary salesperson, there is more potential for things to go wrong. Because of the compensation structure for these types of sales teams, they are incentivized to sell at the highest price possible and will often use high-pressure sales tactics to get you to sign a contract before you’ve had time to get other quotes and compare your options. Some salespeople may try to sell you more solar panels than you actually need or they may use aggressive (and inaccurate) assumptions which make their forecasted energy savings look better. Since solar is highly technical and complex, in most cases it’s nearly impossible for a homeowner to know what’s real and what’s not.

2.  Does the solar contractor work in other industries?

It’s tempting (and logical) to think that a solar contractor who only does solar is a better choice. But because solar markets are so volatile, it can actually be helpful for a solar contractor to be engaged in other businesses that provide a more reliable source of revenue. In other words, if they’re not wholly dependent on solar, they have a better chance of long-term survival, which is essential if there is an issue down the road. Remember that solar panel systems are warranted for 25 years or more.

In addition, because solar installation requires skill sets related to both roofing and electrical work, solar contractors who have one or both of these as a fundamental core business are well positioned to provide quality workmanship.

3.  What indicators of quality are available?

Just like home improvement contractors, length of time in business, reviews, and references are good indicators of the performance of a solar contractor. A company that has been in business for a long time is more likely to stay in business. And because a home solar panel system will last for 25 years or more, you want to be as sure as you can that the company which installed your system will be around to handle any issues that may arise during that time frame.

Since solar is still relatively new it’s not surprising that there are many new solar contractors. Just because they’re new doesn’t necessarily mean that they’re bad. They may have been recently started by industry veterans with many years of experience. For new companies you’ll want to learn about the background of the owners and you will need to rely more heavily on other indicators of the quality of their work.

Given a choice between references and reviews, reviews are a stronger indicator of contractor quality. Between Google Reviews, Yelp, and other review sites, there’s no reason that a solar contractor shouldn’t have at least some reviews for you to use in your evaluation. And because reviews encompass customers who have had both good AND bad experiences, you’re more likely to get a more accurate picture of the quality of the solar contractor by reading reviews of their past work. Good solar contractors will have and gladly provide references. However, it’s easier to cherry-pick the happiest customers to use as references.

4.  Do they have credentials from manufacturers or solar industry organizations?

Other indicators of solar contractor quality are either manufacturer-provided or industry credentials. However, it’s important to understand what a contractor needs to go through to obtain these credentials to discern what they actually mean.

Manufacturer-provided credentials can be as rigorous as requiring solar design and installation training and customer service best practices. Or they can be as superficial as only being based on how much of that manufacturer’s product the solar contractor has sold.

Several non-profit organizations provide industry credentials. For example, the North American Board of Certified Energy Practitioners (NABCEP) certification demonstrates that an employee has passed rigorous training on the design and installation of solar panel systems.

Non-profit industry organization credentials tend to be better indicators of the quality of the contractor since they are purely knowledge-based and are not influenced by sales volumes.

5.  Are they a local or national company?

Each solar contractor will be different, so we don’t want to over-generalize, but there are clear pros and cons to dealing with local versus national companies.

Think about the home improvement contracting industry. It’s generally composed of smaller local contractors. Small local contractors tend to have a more established reputation in a local community and fiercely protect it. Differing local codes and construction techniques also favor local contractors who are experienced with local construction requirements. Solar is no different, where smaller local companies can operate more effectively in areas where they are familiar with codes and have built a reputation they need to protect.

National companies such as Tesla, SunRun, and SunPower have historically dominated the residential solar market. They built their market share in the early days of solar by offering “no money down” lease financing (see our article on solar financing here) and still retain a significant portion of the home solar market but have lost ground to local contractors in the last several years.

More recently, regional solar companies (those who operate in several states) have gained market share, but like national companies they struggle with two factors. The first, as previously noted, is the local nature of the construction industry. Varying local codes, construction requirements, permitting processes and utility requirements make it difficult for companies to be effective in each area when they are spread out over multiple states and jurisdictions. The second is that their business structure requires them to generate sales on a continuous basis to cover high corporate costs. The need to generate sales means that they tend to rely on outside lead generation and third-party sales teams which can lower the quality of service and lead to higher prices.

To be fair, national and regional contractors also have more resources than smaller local businesses – for example, better developed and staffed customer service departments who may be able to provide a more consistent customer experience. They also tend to have better access to loan, lease or PPA financing. Learn more about the largest national solar contractors below.

Tesla (including Solar City)

Before it was acquired by Tesla, Solar City was responsible for one in three solar installations in the country. Solar City pioneered the “no money down” solar lease, and though it once reigned supreme in solar panel installation volume, it started losing market share and has continued doing so even after its acquisition by Tesla in 2016.  Shortly after the SolarCity acquisition Tesla announced that it would begin manufacturing a solar roof, though years later that has struggled to gain traction.

Since then, Tesla has made significant changes to its solar program.  It ended expensive sales programs based on staking out Home Depots and other locations, only selling solar online, only selling standard systems in 4-kilowatt increments (note that solar roofs are still customized) and, more recently, requiring every Tesla solar system to include a Tesla Powerwall battery. Though there’s an allure to the Tesla brand, you should still do your homework –  check out reviews of their solar business and get a quote on a different solar option to see how Tesla’s offering compares.  Even if you’ve got a Tesla in the garage, it won’t know or care whether the electrons you’re feeding it are from a Tesla solar panel system or anyone else’s.

Sunrun

After the decline of SolarCity, Sunrun took over the top spot in home solar sales, even before the 2020 acquisition of the number two player, Vivint. Sunrun works through a combination of their own internal sales and installation and a network of external solar contractors who can offer their financing. They’re no exception to the structure of national solar companies and have significant corporate expenses that they need to cover. Based on their public filings, their cost to sell and install a solar panel system is generally going to be higher than a local company. However, they likely have better financing options that offset some of their higher costs.

Vivint (acquired by Sunrun in 2020)

Vivint Solar started as an offshoot of what is now Vivint Smart Home – a provider of home security systems. The solar division has historically struggled recently to control its costs and turn a profit. From 2017 to 2019, their total cost of selling and installing a system has increased by 40 percent due almost exclusively to increases in sales and marketing expenses and overhead! Vivint relied heavily on the zero money down financing model and in 2019, 84 percent of their systems sold were leases or PPAs.

SunPower

SunPower is one of the pioneers in solar, having started as a solar cell research project at Stanford in 1985. Over the next several decades, SunPower developed into a premium manufacturer of solar cells, solar panels, and complete solar systems for residential, commercial, and utility scale applications. They also sold, installed, and financed systems in each of these segments. In residential solar, they operate primarily through SunPower branded dealers.

In 2018, SunPower announced that it was exiting its utility scale business to focus on commercial and residential solar. And then, in 2019, SunPower announced that it would spin off its solar panel manufacturing business into a separate company called Maxeon Solar Technologies. SunPower and Maxeon will remain tightly tied together, with SunPower having exclusive access to Maxeon’s solar panels until at least August 2022. While Maxeon’s solar panels are very high in both quality and efficiency, they are also very high in cost.

With all the recent changes, where does that leave SunPower now? They still have access to some of the world’s most efficient solar panels (via Maxeon) and bundle these solar panels with their mounting system, third-party inverters, and an optional SunPower battery to create their Equinox system. SunPower sells this home solar system exclusively via local dealers and provides their own lease or loan financing. They have a nicely bundled offering, but the premium for a SunPower system isn’t right for everyone.