BUYER GUIDE · READ BEFORE YOU SIGN
How to Read a Solar Quote
A typical residential solar proposal runs 12 to 20 pages. Most homeowners read the first three: the cover, the monthly-savings chart, and the financed-payment headline. The other 9 to 17 pages are where the contract, the production guarantee, the warranty terms, and the fine print live. The dealer-fee structure, the lien language, and the change-order policy are almost always in the section nobody reads. The walkthrough below covers the document section by section, in the order worth reading it.
System spec, panels, inverter, racking
The first thing to verify is what is actually being installed. A reputable proposal names the panel make and model (for example, “REC Alpha Pure-R 430W”), the inverter architecture (string inverter, microinverters, or DC optimizers paired with a string inverter), and the racking system. If the proposal only states a kilowatt size (“7.2 kW system”) without naming the equipment, the buyer is being asked to sign before the components are pinned down.
The module and inverter spec sheets should be physically attached to the proposal. Spec sheets list real engineering data: rated wattage, temperature coefficient, degradation rate, warranty terms direct from the manufacturer. If the installer’s warranty conflicts with the manufacturer’s spec sheet, the spec sheet is the authoritative document. Without it attached, comparing two proposals across installers is guesswork.
Production estimate and guarantee
Every proposal includes an estimated annual kilowatt-hour production figure. The number to look at is how it was derived: at minimum, a reputable proposal references NREL’s PVWatts model or an equivalent tool, the exact array configuration (panel tilt, azimuth, shading factor), and the derate assumptions used. A figure stated without methodology is a figure stated without accountability.
Production estimates also come in two flavors most proposals do not label. A P50 estimate is the value the system has a 50% probability of hitting or exceeding, the modeled median. A P90 estimate is the value it has a 90% probability of hitting, lower but more conservative. Common sales practice is to show P50 on the proposal and write the production guarantee, if any, at or below P90. Asking which figure is on the page is one of the cheapest questions a homeowner can ask.
The production guarantee itself is the contractual commitment. Two patterns appear:
- Percent-based guarantee. “We guarantee 90% of modeled production over the first 10 years.” This is nearly meaningless because the modeled production is itself an estimate produced by the installer.
- kWh-based guarantee. “We guarantee 7,200 kWh in year one, with a stated annual degradation schedule.” This is a recourse number. If the system underproduces, the installer owes the homeowner cash or replacement equipment to make up the shortfall.
Few national installers will put a hard kWh number on the contract. The ones who will are the ones treating the production estimate as a real obligation rather than marketing copy.
Price structure and dealer fees
The proposal will state a total system price (or a per-watt figure, typically expressed as $/W). The question is whether that price is the cash price or the financed price. The two should be on the same page; in practice they rarely are.
The dollar gap between the cash and financed prices is the dealer fee: the financing-cost markup the lender charges the installer to offer “low APR” financing, which the installer then bakes into the headline price the homeowner sees. The CFPB’s August 2024 issue spotlight documented dealer fees of 10 to 30% as common across the residential solar industry, with some quotes exceeding 50%.
“Some consumers have reported being told they would receive a federal tax credit equal to 26% of the cost of the system, only to find out later that they were ineligible for the credit, leaving them holding loan balances they cannot afford to repay.”
The single most effective question a homeowner can ask at the quote stage: “What is your cash $/W if I pay outright, with no financing?” The answer either confirms the cash and financed prices match (rare), or it surfaces the dealer fee in plain dollars. Either way, the homeowner now has the real input to a payback calculation.
Financing, APR vs. cash equivalent
A $0-down 1.99% APR financing offer sounds straightforward. It almost never is. The financing is offered at the headline APR only because the dealer fee already paid the lender enough to make the math work. A homeowner taking the financing is paying both the dealer fee (as a higher principal) and the headline APR (on that higher principal). The effective cost of capital can be substantially higher than the stated rate.
The honest comparison is the cash equivalent: what does the system cost if the homeowner pays cash, takes a HELOC at the prevailing rate, or finances it through a non-solar-specialty lender. If the dealer- financed total is materially higher than the cash equivalent plus ordinary interest on a HELOC, the financing is more expensive than it appears, regardless of the headline APR.
Warranties, product, workmanship, production
A residential solar install has three separate warranties, written by three different parties. Each should be physically attached to the proposal as its own document.
- Module (panel) warranty. Typically 25-year linear performance, written by the panel manufacturer. Reads something like “97% of nameplate output in year one, declining no more than 0.5% per year to year 25.” This is a manufacturer obligation independent of the installer.
- Inverter warranty. Ten to twenty-five years depending on equipment. String inverters often carry shorter warranties (10-12 years) than microinverters or optimizers (20-25 years). The inverter is the component most likely to fail mid-life, so the warranty length matters more than it appears at signing.
- Workmanship warranty. Written by the installer, not the manufacturer. Covers the labor and roof-penetration work, and varies widely: anywhere from 1 year (a red flag) to 25 years (uncommon). Verify it covers roof penetrations specifically; a workmanship warranty that excludes leak damage is a workmanship warranty that does not cover the most common installer failure mode.
The fine print: UCC-1, escalators, change orders
The fine print is where the contract terms that affect the homeowner most live. Three patterns to check before signing.
- UCC-1 lien language. Most solar loans file a UCC-1 financing statement to perfect the lender’s security interest. The question is what the lien attaches to: the system equipment (acceptable, generally manageable at home sale) or the property itself (problematic, can complicate refinance and resale). The contract should specify. Homeowners have reported difficulty refinancing or selling because of poorly drafted UCC-1 filings; reading the lien language before signing is materially easier than unwinding it afterward.
- Production escalators (PPAs and leases). In a third-party-owned arrangement, the homeowner does not own the system; they buy the electricity it produces, or they pay a fixed lease. PPAs commonly include an annual escalator (the rate the homeowner pays per kWh rises each year). A 2.9% escalator over 20 years compounds to roughly 78% above the starting rate. Whether the deal pencils against current utility rates depends on whether the escalator outruns utility rate inflation, which is uncertain.
- Change-order policy. If the roof inspection during install reveals damage requiring repair before mounting, who pays? A reasonable contract states the per-square-foot or per-hour rate up front. A vague clause that lets the installer set the price after the crew is on the roof is a bad clause to discover mid-install. Get the rate in writing before signing.
The 48-hour rule
Any reputable installer will send the full contract by email and let the homeowner read it for 48 hours before signing. Pressure to sign same-visit or same-day is the single loudest signal that the process favors the close over the homeowner's review. Federal Trade Commission guidance flags high-pressure same-visit sales as a common deceptive pattern in residential solar. FTC Consumer Alert, September 2024 .