Bulk pricing for solar installations?

[russ]

The question is where will the discount come from - what item will it really be on?
1) Panels? Doubt it - they are not going to beat a container price on panels
2) Wiring, conduit, switches? Doubt it - you can get the same price at an electrical discount house if you have a business
3) Fees, permits etc? Nope
4) Installer? Probably - they will try to use Tony 2 guys and pickup (normally hauls away refuse) to do the work

[J.P.M.]

The question is where will the discount come from - what item will it really be on?
1) Panels? Doubt it - they are not going to beat a container price on panels
2) Wiring, conduit, switches? Doubt it - you can get the same price at an electrical discount house if you have a business
3) Fees, permits etc? Nope
4) Installer? Probably - they will try to use Tony 2 guys and pickup (normally hauls away refuse) to do the work

FWIW, +1, especially on fees in San Diego county (waived for solar last I checked). If a deal seems too good to be true, it probably is (too good to be true).

Still, since Sensij is willing to chance it, at least the quote, and seems to be aware of most of the risks, especially probable limitations on material and vendor selection, I'll note my cautions, watch him do a little recon for us all, and note the results. We'll all probably learn something and at worst, it'll only winding up costing one of us. Such a deal ?!?!

[sensij]

FWIW, +1, especially on fees in San Diego county (waived for solar last I checked). If a deal seems too good to be true, it probably is (too good to be true).

Still, since Sensij is willing to chance it, at least the quote, and seems to be aware of most of the risks, especially probable limitations on material and vendor selection, I'll note my cautions, watch him do a little recon for us all, and note the results. We'll all probably learn something and at worst, it'll only winding up costing one of us. Such a deal ?!?!

I'm really not confident that it will work out, but so far it has only cost me some time and a credit check. It turns out I was wrong about employers subsidizing part of the cost, per this article, the employers who sign up are only providing access and information.

I've pondered similar questions as Russ, and have tried to break it down. Let's look at a hypothetical 7.2 kW system, with LG300's and an SMA string inverter.

24 Panels, wholesale = 1.14 / Watt, $8210
7 kW Inverter, wholesale = $2430
Racking, say, $50 per panel = $1200
Other electrical = $1000
That gets to $12840, plus 8% sales tax is $13670

Ballpark guess of 70 hours labor, at $40 / hour = $2800

Let's add a little under $1000 to round it up to $17500. It would take 44% mark-up to get that to $25200, which is $3.50 / W.

At $3 / W for the same system, that is $21600, or $3600 less. If the panels and inverter were 20% less by skipping the wholesaler, choosing something less pricy than LG300's, and getting a "bulk" price direct from the mfg, and the same multipliers were applied, that would account for $3300 of difference.

I have not included financing costs and could certainly be missing other factors. However, it seems believable to me that $3 / W could be obtained without resorting to Tony and his two brothers as installers.

We'll see what equipment actually gets quoted, and who they find to install it. Despite my optimism, if it turns out to be shady, it will be disappointing, but not too surprising. I haven't drunk the kool-aid yet.

Edit: According to a random guy on the internet, 20% wholesale markup and 40% retail markup is typical, so I don't think these numbers are completely in outer space.

[russ]

1) The manufacturers mark up is not in play

2) You buy from the wholesaler - no other choice - such as the electric or builders supply houses

3) Retail never comes into the question - or it shouldn't

[sensij]

2) You buy from the wholesaler - no other choice - such as the electric or builders supply houses

You are right I had a longer conversation with them today, and got some more visibility into their approach. Basically, they are taking the equipment out of the installers hands. The equipment will come from the normal wholesale supply chain, so the risk of 2nd rate equipment should be no higher than it would be with a local installer. They've offered a SolarEdge inverter with either LG, Canadian Solar, or Suniva panels, any of which would be fine with me.

The installer is not involved in design or procurement, and therefore they only get paid whatever they want to charge for the labor. As far as I can tell, a local solar installation company that is making good money on design and equipment markup will not be too interested in working under this arrangement. A company that has trained installation crews that are not fully utilized might be. Tony and his untrained brothers might be too, so it comes down to what kind of filters they have in place to get good installers without blowing the budget. Another company with this business model was still able to attract and hire a well known and respected electrician, but they charged more too.

At this point, I'm unreasonably curious, and I'm going to give it a go. J.P.M.'s good luck wish ought to be enough to carry me through. If you are reading this and also intend to take advantage of this "group rate" pricing, email or PM me and we might be able to help each other save an extra couple hundred dollars.

[jd31]

Very curious to see how this plays out for you in San Diego. Looking for a system myself.

[DaninDana]

You are right I had a longer conversation with them today, and got some more visibility into their approach. Basically, they are taking the equipment out of the installers hands. The equipment will come from the normal wholesale supply chain, so the risk of 2nd rate equipment should be no higher than it would be with a local installer. They've offered a SolarEdge inverter with either LG, Canadian Solar, or Suniva panels, any of which would be fine with me.

The installer is not involved in design or procurement, and therefore they only get paid whatever they want to charge for the labor. As far as I can tell, a local solar installation company that is making good money on design and equipment markup will not be too interested in working under this arrangement. A company that has trained installation crews that are not fully utilized might be. Tony and his untrained brothers might be too, so it comes down to what kind of filters they have in place to get good installers without blowing the budget. Another company with this business model was still able to attract and hire a well known and respected electrician, but they charged more too.

At this point, I'm unreasonably curious, and I'm going to give it a go. J.P.M.'s good luck wish ought to be enough to carry me through. If you are reading this and also intend to take advantage of this "group rate" pricing, email or PM me and we might be able to help each other save an extra couple hundred dollars.

Please keep posting on your experience. I might be interested in this too. PM me.

Dan

[sensij]

So far, so good. This isn't really a hand-holding operation, but they got back to me pretty quickly with a preliminary system design, using SolarEdge (at my request) and Canadian Solar CS6P-260P's. A site visit from the installer is the next step, and presumably a contract will follow shortly afterwards. I may have slowed things down slightly by mentioning this offer to a friend close by who was also interested in solar. He and his wife have also decided to go with them, and so the site visits and installation work for the two systems are being coordinated for the sake of efficiency. My friend also requested SolarEdge, and I think chose LG panels (LGXXXNIC-G3) for a small premium. He was quoted $3.25 / W for a 5 or 6 kW system.

Based on my experience so far, I think this approach is more appealing for someone who is willing to do their own research. If I had gone down this road early in my shopping experience, I would be uncomfortable with the communication so far. However, as long as the installer seems competent, I will continue to see how it goes.

[DaninDana]

So far, so good. This isn't really a hand-holding operation, but they got back to me pretty quickly with a preliminary system design, using SolarEdge (at my request) and Canadian Solar CS6P-260P's. A site visit from the installer is the next step, and presumably a contract will follow shortly afterwards. I may have slowed things down slightly by mentioning this offer to a friend close by who was also interested in solar. He and his wife have also decided to go with them, and so the site visits and installation work for the two systems are being coordinated for the sake of efficiency. My friend also requested SolarEdge, and I think chose LG panels (LGXXXNIC-G3) for a small premium. He was quoted $3.25 / W for a 5 or 6 kW system.

Based on my experience so far, I think this approach is more appealing for someone who is willing to do their own research. If I had gone down this road early in my shopping experience, I would be uncomfortable with the communication so far. However, as long as the installer seems competent, I will continue to see how it goes.

The installation would be my biggest concern. I did some research on this company, and it seems that they are backed by NRG and Solar City among others. It would be an installer within their network, hopefully.

What was the inverter that they wanted to give you initially?

The Price seems very fair.

[sensij]

The installation would be my biggest concern. I did some research on this company, and it seems that they are backed by NRG and Solar City among others. It would be an installer within their network, hopefully.

What was the inverter that they wanted to give you initially?

The Price seems very fair.

Their recommendation for my roof was the SMA SB3000TL-US-22, with the SPS. I am not personally sold on the usefulness of the SPS, and for other reasons that could very well be more marketing than fact, I preferred SolarEdge.

[sensij]

OK, 4 weeks later, the site visit for design verification has been scheduled for this weekend. They haven't shared with me the name of the installer, but my friend was pushier and got some more information. We think it is a relatively new firm coming down from L.A. We'll see how it goes... there are a lot of good installers in San Diego, and it is surprising that they wouldn't choose to use one of them (or maybe not so surprising, all things considered).

[Amy@altE]

love SPS

I love the SunnyBoy SPS (Secure Power Supply) feature. It gives you a little bit of power when the grid is down, not enough to power the house, but enough to charge your cell phone. laptop, rechargable flashlight. The feature came about as a result of Japan's tsunami, when everyone with solar couldn't charge up their phones for communication, even though the sun was shining on their solar array. You may not lose power enough in CA for it to be a big deal, but here in New England, we lose power for days or sometimes weeks at a time with crazy ice storms, so I love the feature.

[J.P.M.]

OK, 4 weeks later, the site visit for design verification has been scheduled for this weekend. They haven't shared with me the name of the installer, but my friend was pushier and got some more information. We think it is a relatively new firm coming down from L.A. We'll see how it goes... there are a lot of good installers in San Diego, and it is surprising that they wouldn't choose to use one of them (or maybe not so surprising, all things considered).

I'd not be surprised if they solicit bids for potential jobs and take the lowest one $$ wise consistent w/ their overall goals.

[sensij]

I'd not be surprised if they solicit bids for potential jobs and take the lowest one $$ wise consistent w/ their overall goals.

Yes, I'm sure that is what they believe they are doing. Whether or not their vendor selection process is truly consistent with their goals is hard to say... the actual performance of those vendors will have a lot to do with it, as will the word-of-mouth reputation that follows.

[thejq]

So how much do you think you're actually saving by going this route? Are you comfortable with some guy from LA who you don't know getting up on your roof? What if there's a problem down the road? In the best case, you save some money. What's the worst case? Not trying to be negative -- I think it's a good exercise you're doing and provides lots of information for the readers. But I'm sure you're smart enough to weight the cons and pros before signing the dotted line.