Is My Solar Proposal a Good Deal? 7 Things to Check

Price Per Watt ($/W)

This is the single most important number on the page. Divide the total gross system cost (before any credits or incentives) by the system size in watts.

Example: A 7.6 kW system priced at $24,320 = $3.20/W

Colorado benchmark (2026):

• Below $2.80/W: Very competitive. Make sure it's not cutting corners on equipment or warranties.
• $2.80 - $3.30/W: Fair market range for quality equipment and installation.
• $3.30 - $3.80/W: Premium tier. Justified if you're getting top-end equipment (SunPower, REC Alpha with Enphase).
• Above $3.80/W: Ask why. There needs to be a clear reason.

If the proposal only shows a financed price or a "net cost after incentives," ask for the gross cash price. You need this number to compare anything.

Production Estimate vs. Reality

Every proposal includes an estimated annual production number (in kWh). This is what the company predicts your system will generate per year. The problem: some companies use optimistic assumptions to make the savings look bigger.

How to verify: Go to NREL PVWatts, enter your address, plug in the same system size and panel tilt/azimuth from your proposal, and compare the output. PVWatts uses decades of weather data and is the industry standard.

Colorado benchmark: On the Front Range, a well-oriented residential system produces roughly 1,450 - 1,600 kWh per installed kW per year. An 8 kW system should produce approximately 11,600 - 12,800 kWh annually. If your proposal claims significantly more, the production estimate may be inflated.

A reasonable proposal should be within 5-10% of PVWatts. More than 15% above PVWatts is a concern.

Utility Rate Escalation Assumption

Solar savings projections depend on what your electricity will cost in the future. Every proposal bakes in an assumed annual utility rate increase. This is where proposals most commonly overstate savings.

What to look for: Find the escalation rate in the financial projections section. It may be labeled "annual rate increase," "utility inflation," or similar.

Colorado benchmark: Xcel Energy residential rates have increased roughly 3% per year on average over the past decade. Some years higher, some lower, but 3% is a defensible long-term assumption.

Financing Terms (If Applicable)

If you're financing your system, the loan terms matter as much as the system price. Look for these details:

• Interest rate (APR): Solar loans in 2026 typically range from 4.99% to 8.99%. Compare to a home equity loan or HELOC from your bank.
• Loan term: 10, 15, 20, or 25 years. Longer terms mean lower monthly payments but significantly more total interest paid.
• Dealer fee: Many solar loans include a dealer fee (15-30% of the loan amount) that gets rolled into the principal. A $25,000 system with a 25% dealer fee means you're actually borrowing $31,250. This is legal and common, but it should be transparent.
• Escalator (for leases/PPAs): If you're considering a lease or PPA, check the annual rate escalator. A 2.9% annual increase on a $120/month payment means you're paying $210/month by year 20.

The key comparison: Will your total monthly loan payment be less than your current electric bill? If not from day one, when does it cross? And what happens after the loan is paid off?

Incentives and Tax Credits

This is straightforward in 2026, but it's where some proposals are still getting it wrong:

What IS still available in Colorado:

• Property tax exemption: Your solar system is 100% exempt from property tax assessment (C.R.S. 39-1-104). This won't reduce your system cost, but it does mean your property taxes won't go up. Worth $200-400/year for a typical system.
• Net metering credits: Under SB 23-258, excess solar generation is credited at a reduced rate (approximately 75% of retail). This is a benefit, but it's less generous than the old full-retail credit.
• Some utility rebates: A few Colorado co-ops and municipal utilities still offer small rebates. Xcel Energy does not currently offer a residential solar rebate.

A trustworthy proposal in 2026 should show your cost without the ITC and shouldn't exaggerate remaining incentives.

Equipment Specifications

You don't need to be a solar engineer, but you should know what you're buying:

• Panels: Look for the manufacturer and model. Tier 1 panels (Longi, Canadian Solar, REC, Qcells, SunPower) all carry 25-year performance warranties. Panel wattage (400W+) matters less than overall system size.
• Inverter: String inverter (SolarEdge, Fronius) or microinverters (Enphase). Both work well. Microinverters add $0.10-0.20/W but offer panel-level monitoring and slightly better shade performance.
• Racking: Should be specified. IronRidge and Unirac are standard for roof mounts.
• Battery (if included): Make sure it's itemized separately. A Tesla Powerwall 3 adds roughly $12,000-15,000 installed. Batteries can make sense with Xcel's TOU-R rate, but they significantly change the system economics. See our red flags guide for more on battery upsells.

If the proposal doesn't specify exact equipment models, that's a problem. You should know what's going on your roof before you sign.

Warranty Coverage

A solar system should last 25-30 years. The warranty should cover you for most of that period:

• Panel performance warranty: 25 years is standard. Should guarantee at least 80-85% of rated output at year 25.
• Panel product warranty: Covers defects. 12-25 years depending on manufacturer.
• Inverter warranty: String inverters: 12 years standard (extendable to 20-25). Enphase microinverters: 25 years.
• Workmanship warranty: This covers the installation itself (roof leaks, wiring issues). Should be at least 10 years. Some installers offer 25 years. This is the one most likely to matter.
• Roof penetration warranty: Does the installer warranty cover any roof leaks from mounting holes? For how long?

The workmanship warranty is only as good as the company behind it. A 25-year warranty from a company that folds in 3 years is worthless. Look for established Colorado installers with a track record.