How to Select Solar Panels

Posted by Solar Expert on February 29, 2020

Choosing the right solar panels for your PV system can be one of the most confusing parts of the whole buying process. You may have read blog articles or talked to several installers you know, or even looked at the solar panel spec sheets and warranties for a bunch of different manufacturers to try to figure it out yourself. If you are like many of our customers, you have done some research, but just don't know how to sort facts from fiction, and then apply the facts to make an intelligent decision.

A Little Background

There are different technologies generally used in the production of solar panels, and they have varying characteristics in terms of efficiency and cost of production. This discussion focuses on the most commonly used panels for residential systems, which are 60 and 72 cell mono panels. For solar panels, generally speaking, the higher the efficiency the better, since a higher efficiency translates to more electricity generated by a panel, which results in a greater reduction in the utility bill. As in most things, higher efficiency panels cost more, and lower efficiency panels cost less.

The next thing to keep in mind is that not all manufacturers are created equally. Some manufacturers are owned by massive international companies with names we all know - such as LG, Hyundai, and Panasonic. And there are manufacturers that none of us have ever heard of. As expected, the brand-name manufacturers generally have higher prices, and the ones we've never heard of cost less. The brand-name and the no-name manufacturers may or may not be using the same technology to produce their panels, so buying a higher cost brand name panel doesn't necessarily mean the solar panel system will produce any more electricity or last any longer than a no-name brand.

The specifications for each panel are provided by each manufacturer and include things such as annual expected production losses due to aging (i.e. "degradation"), and the minimum expected production over the warranty period (which is typically 25 years). In other words, the expected production for every panel over 25-years is published and warrantied by every manufacturer and can be analyzed/compared against other panels and manufacturers. There is also a workmanship warranty period indicated in the spec sheet. Most workmanship warranties are either 10 or 12 years, but there are outliers going in both directions. Obviously, the longer the warranty, the better.

While we are on the subject of warranties, it is good to keep in mind that comparing warranties is not as easy as it sounds. Yes, panels are made to be pretty tough, and will generally last a long time, but a 25-year warranty from a manufacturer that goes out of business in a year isn't worth the paper it is printed on - unless they have purchased warranty insurance coverage to help boost the value of their warranty to buyers.

The last item to keep in mind is that solar panels are usually priced on a per watt basis. This is one of the most confusing aspects of the decision process for many customers. In today's pricing scenario, higher efficiency panels produce more electricity per panel, but they cost more in two ways - the price per panel is higher because manufacturers charge more on a per watt basis for higher efficiency panels AND because the panels are higher wattage. Huh? Ok, here's an example to help illustrate: a higher efficiency 60 cell panel might be 330 watts and cost 80 cents per watt (330*$0.80) or $264. A lower efficiency 60 cell panel might be 300 watts and cost 65 cents per watt, (300*$0.65) or $195. IN THIS EXAMPLE, THE HIGHER EFFICIENCY PANEL'S DC ELECTRICITY CAPACITY IS 10% HIGHER ((330-300)/300), BUT IT COSTS 35% MORE (($264-$195)/$195). Now, maybe the higher efficiency panel is higher quality and may produce slightly more than 10% more electricity than the lower efficiency panel (say it's even 15%), but it won't likely go anywhere near producing 35% more. Other considerations may offset this difference - for example, in this case racking costs would be 10% lower on a per watt basis for the higher efficiency panels; also, if the roof size constrains the system size, the higher cost may be worth it to offset a larger part of the utility bill. The point is, there is almost always a disproportionately higher cost paid for higher efficiency panels.

All that being said, here's how we select solar panels for our customers

The first step we take is to eliminate all manufacturers that are not on the Bloomberg Tier 1 list. Many people are not familiar with it, but in short, it is a list of solar panel manufacturers published quarterly by Bloomberg New Energy Finance. The Bloomberg list documents which panel manufacturers have a minimum volume of projects for which banks or other financial institutions have loaned money for large scale solar projects - meaning that a certain number of banks or other institutions have performed enough analysis of the manufacturers' financial strength to be comfortable to provide the financing for projects with those manufacturers' panels. It is the primary such ranking list used in the industry, and we feel better providing panels to our customers from manufacturers that have passed this litmus test. It is the best, measurable indicator we have that the manufacturer will be around to make good on a warranty claim for decades to come. IN OUR OPINION, ANY PANEL FROM A MANUFACTURER ON THIS LIST IS A GOOD CHOICE. In the interest of full disclosure, some folks may argue that the Bloomberg list has its faults (which it does), but in our many years as a solar panel installation company, we have yet to see any credible alternative ranking system. And, every tier one company that we've bought panels from since 2012 is still around, and still honoring their warranties.

We take the Bloomberg list, and we then use industry-leading software modeling tools that utilize the exact manufacturer specifications for each contemplated solar panel to analyze the ones with the best payback characteristics for our customer based on the actual project design. That modeling includes the price of each type of panel, so it takes into consideration cost, expected production, degradation, and other factors to solve for the overall lifetime average cost per kWh of electricity. We have found over time that most often the lower efficiency panels provide a better lifetime average cost per kWh of electricity than the higher efficiency panels. That isn't always the case, but it is usually true, and we recommend that every one pricing out quotes ask the solar installation company for the overall lifetime average cost per kWh of electricity when deciding between solar panels. Note that comparing the overall lifetime average cost per kWh between different installers can be misleading since they often use different long term assumptions or software tools - but once an installer is chosen, asking the same installer to run different scenarios using a variety of panels can be a very useful exercise.

Often customers will want to maximize the system output for the roof space available or will prefer the aesthetics of a particular panel, so the one with the lowest lifetime average cost per kWh isn't always the panel chosen. Frequently a customer is willing to pay more for higher efficiency panels to save a larger gross amount of utility costs over the life of the system. In other words, the customer won't save as much on a per kWh basis but will save more money in total over the years because the higher efficiency panels produce more kWh of electricity in the same amount of space.

So, what do we see happen in real life? In our seven-year history, we have found that Canadian Solar, Trina Solar, and Talesun have been the panels most often selected by our customers based on the analytics we've provided for them. We don't have any special relationship with any of those manufacturers, and we use others frequently, but we thought it would be good to share what we've seen over the years.

Our Solar Energy Solutions

Are you thinking about a solar panel system for your home or business? Give us a call at 972-827-7651 or click HERE to get a free, no-obligation consultation, and we'll perform a detailed analysis to help you determine which solar panels make sense for you.

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