FAQ: Why do solar panel system prices differ so much?

by Solar Selections on October 18, 2011

This is the first of our new Frequently Asked Questions articles, addressing some of the common queries that are raised by people looking to install solar energy systems in the UK. This article will look at the very frequently questioned matter on why different installers quotes can have such large price disparities. Does it really come down to product and service quality? Let’s find out..

There are a lot of companies now installing solar energy in the UK, and they all utilise specific approaches to carry out their work. It’s a complicated process involving them sourcing their components, transporting them across the country, storing products when needed, training and recruiting employed installers and subcontractors, generating leads and sales, conducting site surveys and organising an installation schedule. And that’s before they’ve even placed a bracket on the roof! Maintenance, post-installation customer service, marketing issues… There is a lot to consider, and it’s only within an understanding of this can we begin to contemplate how prices can differ so much for the end product; an installation.

 

The Organisational Structure of an Installer

Imagine, if you can, a scale on which an installation company exists. At one end, we have the local, small organisation in the form of your localised installer. Possibly a family-run business, only a handful of full-time employees and installation crews working out of one warehouse in a specific region, the local installer is a member of the neighbourhood that they’ve likely lived in for years. At the other end of the spectrum we have the multinational corporation, operating in countless countries with supply lines direct to production facilities with directly employed truck drivers and slogans glimmering away on television sets and uniforms.

The installation companies you’re considering are not likely to be one or the other, but they will exist at some point along this scale. The approaches of the two extremes can be further explained in order to gauge best where this pricing has diversified along the way. We shall start with the large companies to best explain their more business-oriented approach.

Large Installers

Running a large solar business across international borders or even simply nationwide in the UK is similar to many other business models. It is important to utilise economies of scale, direct lines to production and extensive advertising and exposure to gather the momentum needed to cut prices, appeal to the common customer and yet maintain quality service to ensure longevity. By purchasing components such as panels and inverters in their thousands, better rates can be achieved driving costs down. Priority is also given to such orders, so large numbers such as communities or commercial groups can be dealt with swiftly. Employees are used wherever possible to maintain control over the many facets of the business and incentivise staff in sales and delivery roles.

The large scale installer understands that as a big company, they can focus on the cost competitive end of the industry effectively. Whilst they will usually stock some of the products considered to be ‘premium’ for options, they more often go for the trusted brands of cost-effective components. By delivering such products in a timely manner and a price that suits they can gather up large numbers of orders and the whole process runs smoothly. The conclusion: Good products, great prices and company stability are the positives, less personalised service and communication can be the negatives.

The Locals

The approach of local installers is to gather support and business from their targeted regions with a customer service-oriented and quality approach. They more often than not source components that they can claim are superior to the cost-competitive approaches of their competitors, in order to justify their extra expense. The actual performance increases must be researched and appraised individually, because sales pitches don’t only come from the shiny suited salesmen. Your local installer must make his business somehow, so rather than holding their claims of super increased efficiency and reliability against them, simply consider your priorities at all times.

Altogether the approach is one of quality over quantity. The local installer needs customer referrals from neighbours and family members to keep running, so he is highly aware of providing an excellent service to his clients. You will be treated uniquely, your system an important symbol for the local community and your faith in the installer’s capacities. The conclusion: Excellent products, fantastic service and the peace of mind that they are just down the road work in their favour, however prices are usually more expensive and overall business longevity must be considered.

Considering the Two

These generalisations are not intended to pigeonhole companies currently installing solar in the UK, but rather offer some insight into why their prices can differ so much. The realistic suggestion is to consider your project’s priorities and identify them in an installer that has provided you with a quote.

The trick is to compare what you’re getting (product and service) with what you’re paying. Check the reputation of the components online and review the size and history of the company from their website. Don’t expect hand-holding from the national installers or rock bottom low prices from the chaps next door. Do expect to be treated fairly and honestly and that the product and installers are fully licensed, MCS accredited, tested and approved to the required International Standards (IEC61730, as well as either IEC61215 or IEC61646).

Solar Selections is here to assist with this process within our service of consulting you and organising your installation. Contact us today and allow us to do the hard yards of gathering information whilst you simply identify what you’re after and when you’d like it to be installed.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: 020 7205 2267

© Solar Selections Pty Ltd

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