Pricing With Project Solar - How It Works and How to Analyze

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The solar industry is ripe with abusive pricing models.

For most companies, the price they charge is directly tied to the benefit solar offers. In areas with more sun and/or higher electricity rates, traditional solar companies charge more. . . even though their costs are the same. 

These abusive companies price as high as they possibly can while still saving you 10-15%. It appears to be a win-win, but in reality, people are way overpaying for solar. 

Imagine GM charging twice as much for the same 4x4 truck in SLC, UT, where it snows, vs. Phoenix, AZ, where it's almost always warm and sunny. Shipping from the factory in Detroit is a negligible difference. People would be outraged and probably go to Arizona to buy their truck. This happens ALL THE TIME in solar. Companies take advantage of local conditions.

We believe in flat pricing. The same pricing for all. We don't manipulate our pricing based on your state incentives or jack OUR rates because your utility rates are high (looking at you, California). 

The truth is, flat pricing is hard. In order to have the same price for all, we had to price based on the lowest denominator. We needed solar to make sense, even in states with the lowest utility costs and mediocre sunshine. 

Door-knocking salespeople making $300k/year simply wouldn't work with our goals. To make our flat and fair pricing a reality, we needed a breakthrough in efficiency. We needed the internet. 

THIS is how Project Solar was born. 

Our Pricing

pricing chart with project solar

Unfortunately, there is variability in the raw cost of going solar. Permit fees vary by locality, and there are many fixed costs such as site design, engineering, and electrical hook-ups. These fixed costs are the same whether you are installing a 3 kW system or a 15 kW system.

These fixed costs, spread out over larger systems, reduce the total amount on a cost per watt basis. So while you can reasonably assume that a bigger system costs more in total, the cost per watt will go down. These are basic economies of scale. 

Therefore, to maintain a fair and flat pricing model, we too must charge customers on a sliding scale where smaller systems are more expensive per watt and larger systems are cheaper. However, the range does not need to be dramatic to offset the relatively low amount of fixed expenses. 

Our DIY pricing is simple: any system larger than 13kW is priced at $1.41/watt, and any system below 4 kW is priced at $1.69/watt. Anything in between is priced at a sliding scale, so it's equally and fairly proportionate to the upper and lower bounds.

NOTE: These prices per watt reflect what we actually charge and do not take into account state and federal incentives. Those incentives belong to you, are designed for you, and we do not charge more based on them. An average DIY install is less than $1/watt after incentives.

Equipment costs are reducing globally as the industry matures, and we update our pricing to reflect the pricing improvements. That being said, pricing has appeared stable in the last 2 years as maturity (pending any technological breakthroughs) seems to have been reached. The incremental improvements in pricing/efficiency are lower than the missed opportunity costs of going solar now. 

For full-service install, we use our DIY pricing as the base and simply add on the EXACT cost we pay our install partners. . . with whom we have negotiated amazing rates.

How to Analyze ROI From a Solar Project

We like to look at solar projects from an ROI perspective. Other companies like to make ROI claims as well, calculated in a whole bunch of different ways and often with many assumptions about how utility rates and home values could increase over 20 years.

We do ROI the simple way, calculated as follows:

[energy cost savings year1 / cost of going solar]

For my house (Project Solar CEO), it looks like this... 

System size: 9.9 kW
System production/year: 15,899 kWh
Total cost: $9655.51
Local utility rate: $0.09/kWh.
Energy cost savings = system production * local utility rate
15899*.09 = $1,430.91

That is $1,430.91 saved a year on a $9,655.51 investment. Or 15% ROI. 

This beats S&P 500 averages, real estate, and most other investments in both total return AND stability. This doesn't even take into consideration the home value increase, which conservative estimates place at at least $2.50/watt. 

So let's take this example one step further and project that I plan on moving in 5 years.

Total savings over 5 years: 5*1430.91 (yearly savings) = $7,154.55
Home value increase: 2.5*9,655.51 (system cost) = $24,138.78

Total return$7,154.55 + $24,138.775 - $9,655.51 (original investment) = $21,637.82
ROI = [$7,154.55 + $24,138.78] / $9,655.51 = 324%

Do this, and you've more than tripled your money in 5 years, and you have earned your place amongst the Wall Street elite as a premier money manager! Congrats!

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