NREL Solar Data: New Report Reveals Installer Pricing Trends
EnergySage saves solar customers thousands through price transparency and competition, according to independent government study
For many years, we at EnergySage have touted our ability to save consumers money through the Solar Marketplace due to the competitive nature of our site and by arming consumers with full quote transparency to help them negotiate the best deal. Now, we have data from an independent government research laboratory to support these claims. The National Renewable Energy Laboratory (NREL), funded by the US Department of Energy, recently published its report entitled Using Residential Solar PV Quote Data to Analyze the Relationship between Installer Pricing and Firm Size that shows two compelling conclusions:
- Larger installers charge more for solar
- EnergySage reduces solar prices by thousands of dollars
Large Installer Premium
The study demonstrates that larger solar installers (e.g, SolarCity or SunRun) offer consumers significantly higher prices for the installation of solar. In the chart below, the NREL study shows that larger solar installers offer prices that are, on average, $0.37 per watt higher than smaller installers, but often times much higher than that. For an average 8-kilowatt solar system (see more on the average system sizes in the EnergySage Market Intel Report), this premium amounts to nearly $3,000. That’s roughly a 10% premium, and represents a significant extra cost for consumers, reducing the financial savings that homeowners are able to enjoy from going solar.
Why do larger installers charge more? In many cases, according to NREL, this premium might exist simply because of “imperfect competition,” meaning that larger installers expect that few consumers will shop around to compare their quote. This is quite unfortunate, as smart shoppers should always look around to compare their options. Doing so not only helps homeowners save money, but also helps ensure that people find the right solar equipment for their specific property and the best possible solar installer to work with. There is no one-size-fits-all solar solution, and customers need the ability to find a tailored solution.
The EnergySage Solar Marketplace is largely comprised of small and mid-sized solar firms. These are the companies that were installing solar long before it was “cool” and these are also the firms that persist through the ups and downs of state incentive programs and other market challenges. By including smaller, more nimble solar companies, EnergySage helps to bring prices down for consumers. Additionally, the NREL study goes further to specifically parse out the effect that EnergySage has on market prices irrespective of installer size.
EnergySage Consumer Savings
The NREL study specifically looked at quotes submitted by installers on the EnergySage Marketplace (“internal quotes”) and compared them to quotes offered offline by solar companies (“external quotes”). The chart below summarizes the results and shows that external quotes are $0.30 / Watt more expensive than internal quotes.
This shows that consumers shopping on EnergySage can expect to save nearly $3,000 (again, assuming an 8-kilowatt system) just by leveraging the benefits of online comparison-shopping! While the difference in the average price is significant, consider the plight of customers who only received quotes in the upper end of that range. With that in mind, consumers could easily pay an additional $10,000 or more for the same solar energy system. The study suggests that installers participating on EnergySage may price their quotes lower because they expect greater competition on the site versus when they provide quotes to consumers offline. In addition, the price transparency provided to consumers on EnergySage helps them to easily negotiate lower prices with installers.
The value of simplicity, transparency & choice
We’ve always known that EnergySage provides tremendous value to consumers. The Solar Marketplace acts as a consumer protection tool, helping consumers to compare quotes from pre-screened, high quality providers to make an informed decision. We’ve also shown time and again that the Solar Marketplace helps consumers to get a better deal on solar, even when comparing the results to large discount programs. And now we have actual data from an independent source proving that these conclusions are not only true, but also significant. Solar customers on EnergySage can expect to save as much as $10,000 just by using this free, vendor-neutral site to compare their solar quotes. In the end, this savings helps to accelerate the payback from solar and puts more money in the pockets of consumers for other important household expenditures. As NREL states, “all customers could benefit from increased competition."
EnergySage runs the largest, and only truly vendor-neutral, online solar marketplace. Developed in 2012 with funding from the US Department of Energy, EnergySage is dedicated to information, transparency and choice. Our suite of online tools and resources help consumers research and shop for solar.
Our rooftop solar marketplace presents property owners with multiple solar quotes from pre-screened installers in a unique apples-to-apples format, and provides live support from expert Solar Advisors. The Community Solar Marketplace provides community solar FAQs and connects customers with projects in their area.
In addition to making these tools publicly available, EnergySage works with a range of organizations – from utilities like National Grid to state agencies like The Connecticut Green Bank – to aid their audience in getting started with solar.
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