6 min read

Seven things worth checking in a solar agreement

You do not need a specialist to read the seven things below. Each one is a place where what is written and what was explained sometimes turn out to be different, and finding that yourself is a perfectly good reason to ask for a review.

1. The payment, and what it includes

Find the monthly figure and check it against what you remember agreeing to. Then check what it is a payment on. On a loan, the amount financed is often larger than the price of the equipment, because costs associated with arranging the financing can be built into the balance. Whether that was explained to you is a fair question.

2. The length of the term

Twenty and twenty-five year terms are common. Multiply the monthly payment by the number of months and compare the total against the system price. For long terms the difference can be substantial, and it is rarely the number that gets discussed at the table.

3. Whether the payment changes

Some agreements raise the payment on a schedule. Leases and PPAs frequently include an annual increase, often expressed as a percentage. Some loans have a lower introductory payment that steps up later, sometimes on the assumption you will put a tax credit toward the balance.

Look for any wording about the payment changing, increasing, or adjusting, and find the schedule it refers to.

4. What was actually promised about production

Compare the estimate you were shown against what the agreement commits to. Estimates are often presented persuasively while the agreement itself promises considerably less, or nothing at all, about how much the system will produce or save.

5. What happens if you sell

Find the transfer or assignment section. A loan is usually settled or assumed at closing. A lease or PPA normally passes to the buyer, who has to be approved first. Either way there is a process, and knowing it before you list the house is much easier than learning it during escrow.

6. Warranties, and who honours them

There are usually several: the panels, the inverter, the roof penetrations, and the workmanship. They frequently sit with different parties and run for different lengths of time. Note who is named for each — that matters a great deal if the installer is no longer trading.

7. Who the parties actually are

Check the names at the top and the signature pages. It is common for the company that sold to you, the company that installed, and the company that finances to be three different businesses. Knowing which is which tells you who to contact about what.

Three ways to start

Start wherever you are right now

All three end up in the same place. Pick whichever one matches what you have in front of you.