How to Read a Solar Quote
Solar proposals are designed to be compared on one number: your new monthly payment versus your current utility bill. Nearly everything that decides whether the system is a good deal sits outside that comparison.
Ask this one question: "What is your cash price for this exact system?"
If it is lower than the financed price, the gap is a dealer fee you are paying to borrow — and it is frequently 15–30% of the system cost.
The dealer fee is the big one
Low-rate solar financing is not charity. Lenders charge installers a fee to originate those loans, and that fee gets folded into the system price you are quoted. Because it is buried in the price rather than the rate, an eye-catching 0.99% APR can conceal a far more expensive deal than a plain 7% loan.
Put both versions into the Solar Loan vs Cash Calculator — it has a dealer-fee field precisely because this is the most common way solar economics get quietly wrecked. On a typical system, adding a 25% fee can flip a deal from cash-flow positive to negative and nearly double what financing costs you over the loan.
Line by line
| Line | What to check |
|---|---|
| System size (kW) | Does it match your usage? Cross-check with the System Size Calculator. Oversizing is common where export rates are poor. |
| Cost per watt | Divide gross price by system watts. This is the only figure that lets you compare quotes fairly. |
| Production estimate | Stated in kWh per year. Ask whether it accounts for your actual roof orientation and shading, or is a generic regional figure. |
| Panel & inverter | Specific make and model, not "premium tier". Inverter type matters for shading and for future repair costs. |
| Incentives | Itemized, with what you actually qualify for — not the maximum available to someone else. |
| Warranties | Three separate ones: panel performance, inverter, and workmanship. Workmanship is the one installers vary on most. |
| Financing terms | APR, term, dealer fee, and whether the payment assumes a tax-credit paydown. |
| Escalator | On leases and PPAs especially — an annual payment increase, often 1–3%. Know whether yours has one. |
Assumptions worth interrogating
- Utility rate inflation. Proposals often assume aggressive annual increases because it makes 25-year savings look enormous. Ask what rate they used, then try a lower one in the Solar Payback Calculator and see how much the payback moves.
- Degradation. If the projection assumes flat output for 25 years, it is overstating savings. Panels lose roughly half a percent a year.
- Net metering. Frequently assumed at full retail value. In several states it is no longer close to that — see net metering explained.
- Inverter replacement. String inverters typically need replacing once in a system's life. Many projections omit it entirely.
Sales pressure is a signal
Same-day-only discounts, prices that drop steeply when you hesitate, and reluctance to leave a written itemized quote are all worth treating as information about the company rather than the offer. A system that genuinely pays back does not need a deadline to look good tomorrow.
Get three itemized quotes, compare on cost per watt, and run each through the calculators with your own assumptions rather than theirs.
General information, not financial advice. Incentive eligibility and financing structures vary — verify current terms before signing.
Frequently asked questions
What is a solar dealer fee?
It is a charge lenders levy on installers for offering low-rate financing, which the installer then builds into your system price. It commonly runs 15–30% of the system cost and is almost never itemized — you see only a higher price and an attractive interest rate. A 0.99% loan carrying a 25% dealer fee is far more expensive than a 7% loan without one.
How do I find out if my quote includes a dealer fee?
Ask a single question: "What is your cash price for this exact system?" If the cash price is lower than the financed price, the difference is the dealer fee. Get both numbers in writing. An installer who will not give you a cash price is telling you something.
What should a solar quote include?
System size in kW, panel and inverter make and model, a production estimate in kWh per year, the gross price, itemized incentives, the warranty terms for panels, inverter, and workmanship separately, and — if financing — the APR, term, any dealer fee, and whether the payment assumes you will apply your tax credit as a lump sum.
Why does my quote assume I make a big payment in year one?
Many solar loans are structured expecting you to apply your federal tax credit as a lump-sum principal payment, usually in the first 12–18 months. The advertised monthly payment only holds if you do. If you do not qualify for the full credit or use that money elsewhere, the loan re-amortizes and your payment increases — sometimes substantially.