We have been asked why prices for a solar energy installation in BC can vary so much from one installer to the next.

The price for solar installations internationally varies even more. The price per watt for a residential solar in the United States can be three times as much as it is in Australia. Historically the prices in Canada have be less than the US but not as low as Australia. Now, we are starting to see pricing similar to the US in Canada from some newer solar installers. We think there are a few factors that increase prices as we see the “Americanization” of solar installations.

1. Customer Acquisition Costs. Some installers have begun using commissioned door to door salespeople and aggressive sales techniques. Given that only a few of these sales calls turn into actual sales the commission rate has to be high in order for the salespeople to make a decent wage. Alternately there is a high turnover of staff resulting in higher training and on-boarding costs. Other companies are using expensive but not well targeted social media campaigns. We believe that are more efficient ways to acquire customers.

2. Hidden Financing Charges.  As was the case in the U.S., some installers are now offering 0% financing over the first few years of loan contract.  The financing companies that offer these deals make up for the lost interest by charging a dealer fee.  The dealer fee is then added to the cost of the system.  Based on the agreement with the financing company, the dealer can not disclose that there is this hidden fee.  For this reason, sometimes solar energy purchases end up paying the higher amount even if they are not using the financing option.

When the 0% interest period is finished the interest rate goes up to over 13%.   We prefer to offer our customers financing at interest rates that are less than half that amount with no hidden charges.

3.  Sub-contracting.  Some solar energy companies are operate as sales organizations but don’t actually do the install.  They subcontract that work to installers.  And in some case the “installers” sub-contract work to electricians.  All of these layers each require a profit margin which increase the overall cost.  And some “Canadian” installation companies are owned by foreign holding companies which also take a cut.  We are able to keep costs lower by using a vertically integrated approach. 

4. Experience counts.  Companies that have been around for decades are able to negotiate lower prices with suppliers.  They are also able to streamline the permitting process which is often unique to each local area.  This also helps reduce costs.