6 Problems When Buying A Solar System For Your Home In Australia
The main problems with buying a solar system in Australia are:
There are no household brands in the solar industry
There is a vast range in quality and price
Many installers are not honest, or at best, they are not looking out for the best interests of their customers. They are often referred to as solar cowboys
Solar is not one-size-fits-all
China has cornered the solar panel market, which is causing supply issues at the moment
Lead generation companies are pushing up prices and providing confusing information
1. There Are No Household Brands In The Solar Industry
Perhaps the biggest issue for people trying to install a solar system is that all of the brands are new. Unless you’ve installed solar panels before, you probably aren’t going to recognise the names of any of the panel manufacturers, inverter brands or even the installers.
It’s all new.
Up until recently, LG Solar was the leading solar panel brand. They made top-quality solar panels and the brand was one people trusted. Unfortunately, they pulled out of the market, leaving us once again with a number of manufacturers that no one has heard of before.
The Answer: We have a list of the top solar brands in Australia here: Top 5 best solar panels
In terms of the best inverter brands, Enphase and SolarEdge are the two top runners. These two systems offer panel-level optimisation and are what we call smarter, safer solar.
2. There is a Vast Range in Quality and Price
The next major problem is what we refer to as ‘cheap solar’.
People often try to compare solar to cars by saying that cheap solar is more like buying a Toyota and the Smart solar systems are just a luxury that you don’t need. This couldn’t be further from the truth.
To continue the analogy, cheap solar would be more like buying an old 2nd hand car from a dealership with a terrible reputation and then just expecting it to work as well as a new Toyota.
A good quality solar system should last 25 years or more. Over the years, we have consistently seen reliability issues with these cheap solar systems, including:
Solar panels failing due to cheap components or from poor quality control during manufacturing
Inverters breaking within 5 or 6 years, often sooner
Manufacturers disappearing or changing name, taking their warranty obligations with them
Panels getting water in them because they aren’t sealed properly
The Answer: this one is pretty simple. To get a good quality system that lasts a long time, you need to choose the top brands such as the 1KOMMA5° full black modules, and then have it installed by a reputable installer. This costs more money upfront, but as shown in the example above, on average, you should save more money with the system over time. In many cases tens of thousands of dollars more.
3. The Solar Cowboys
Many industries have serious problems with dodgy operators, and unfortunately, this is also true in the solar industry.
The main issue we see happening over and over is companies that sell really cheap solar systems, and then as the warranty claims start adding up, they simply change their name and ‘Phoenix’ into a new company.
This isn’t a small issue either. It is estimated that around 1 in 3 solar systems don’t have warranty support anymore because the installer or the manufacturer are no longer in business.
Some of the industry’s largest installers have the worst reputation for what this Choice article describes as ‘theft’.
“The less-than-honest outfits often use pushy sales techniques to sell large volumes of discounted, lower-quality systems that are poorly installed.
“Some appear to build up a big list of debtors – then go bust to avoid paying them. In the meantime, they have been paying themselves dividends and salary, and others simply appear to not want to be liable for the 25-year warranties.
“Marcus Lambert (LG Solar) says some are forced to wind up the company once the poorly installed or lower-quality components begin to fail, because the business can’t service them all and stay afloat. Or they never had any intention of sticking around to help anyway.
“After a few years the product fails – it usually has an 80% to 90% failure rate in a short timeframe, Lambert says.
“Then the installer’s phone is very busy and if the importer of the product has stopped answering his mobile phone, the installer has the choice to pay literally a few hundred thousand dollars from their pocket – or go bankrupt.”
It really is that bad.
Marcus Lamert continues:
Illegal ‘phoenixing’ is also recognised as a problem in the solar industry. This is when the director of a company that winds up forms another company under a new name doing exactly the same business, without any of the liabilities or debts of the previous entity.
“In Australia it’s easy for Solarshine to become Solarshinier in the wife’s name,” quips Lambert.
The Answer: Avoiding The Solar Cowboys isn’t so difficult, however, the main thing to accept is that it isn’t going to cost $3500 for a 6.6kW solar system. If that’s your budget, it will often be better to not get solar at all. Just put that money towards paying your power bills.
Good quality solar systems have fairly set price ranges, and more information is available here: Solar System Prices In Sydney
In terms of finding a good installer, it’s not always the easiest task. Many of The Cowboys actually have the best reviews and testimonials, and although we are sure that they aren’t all fake, solar installers have been fined by the ACCC in the past for posting fake reviews.
Two tips: look for installers that have been in operation for over 10 years, and importantly installers that have Premium Installer badges from the leading manufacturers such as from Enphase, SolarEdge and Tesla.
4. It Shouldn’t Be One-Size-Fits-All When It Comes To Solar
A lot of solar installers only offer 2 or 3 systems, typically a 6.6kW system and a 10kW system. We’ve even seen order forms where customers have to add on their own ‘extras’, such as a fee for a storey house or a certain roof type.
The problem, of course, is that a solar system should be fit to meet your needs. Some houses don’t use much power during the day, and so are advised to include battery storage. Others have big power usage in summer with pool pumps and air conditioning, and so need a larger system even though it will be too big in winter.
The Answer: Every house is different, and so to get the most out of a solar system it is important that the system is sized up properly.
This typically involves a 15-minute discovery call where we work out your power usage across the day, and across the year. We can then recommend a few options based on your budget, and your goals for why you want to go solar. For example, if it’s more environmental, then the larger the system the better. Or if it’s to be independent from the grid, then we will recommend a solar system that generates enough power to run your home for 24 hours and include a Tesla Powerwall Home Battery.
5. Supply Issues From China
China has essentially cornered the solar industry by providing all times of incentives such as interest-free loans. This has driven down prices to the point that it next to impossible to compete outside of China.
Many companies have pulled out of the solar panel industry, including Bosch and LG Solar. Others were bought out, for example, Q Cells was bought by Korean giant Hanwha. Others were forced to move to Asia, such as REC Solar.
With China now dominating the industry, anything that happens in that country causes serious disruptions here in Australia. For example, the trade war between China and The USA is causing issues in the solar industry.
The US Department of Commerce recently threatened retroactive tariffs for solar panels because the Americans think the Chinese are circumventing U.S. tariffs by moving components for solar panels through Southeast Asian countries such as Malaysia and Thailand.
The threat of retroactive tariffs has effectively stopped imports of solar panels and components from Cambodia, Malaysia, Thailand, and Vietnam, and these four countries provide 82% of the most popular type of solar modules used in the United States.
There have also been serious disruptions to the supply of solar panels into Australia because of the strict Covid lockdowns in China. Many smaller solar installers weren’t able to get their hands on any stock, which meant that many installers had to leave the industry to find work, often as an electrician.
The current supply chain issues are making it very difficult for solar installers such as ourselves to get our hands on a regular supply of stock. For now, we are very happy to be able to offer top-quality panels from 1KOMMA5° and Trina Solar, and we hope that is able to continue for the years ahead.
The Answer: Currently, there are only a small handful of manufacturers that are supplying Australia with good-quality panels that aren’t linked to China. The two that we are installing at the moment are 1KOMMA5° and Trina Solar.
6. Solar Lead Generators Pushing Up Prices
The final problem with the solar industry at the moment is to do with lead generators. These are essentially digital marketing companies that don’t have anything to do with the installation or service of a single solar system, and yet position themselves as industry experts.
At face value, it would seem like a good idea for an independent 3rd party to be offering advice for consumers, however, often this advice is based on little to no industry knowledge, and it comes at a big price.
When you ask for 3 quotes from one of these Solar Quote companies, they essentially take your details and sell them to solar installers for about $50. If they sell your details to 3 installers, that means they make $150 for every lead that they generate.
There is no incentive for these Solar Quotes companies to generate good quality leads, only that they are ‘good enough’ for the lead to not be rejected. Typically we find that the conversion rate is about half compared to enquires from all other lead sources, including from Google, and from advertising.
This means that if only 1 in 10 enquiries buys a solar system from us, we are paying $50 x 10 per sale, or $500. That’s how much more customers are having to pay for the service of getting 3 quotes.
Furthermore, Solar Quote companies advertise aggressively on Google, YouTube and other digital platforms. This pushes up advertising costs for installers even if the customer clicks directly on one of our ads. The price per click (not enquiry) can be over $10 or even $20 for Google searches such as ‘solar power quote’. That’s fine for a solar quote company because they are making $150 per enquiry, but it’s completely unaffordable for most solar installers.
Again, this cost is passed on to all solar enquiries because the cost per lead across the board is hundreds of dollars more than it should be.
The Answer: It’s a bit the same for everything online these days. Airlines want people to book tickets on their website, hotels want you to book your stay directly with them. The only way this situation will improve is if people start bypassing the lead generators and conduct business directly.
If you were searching for solar power quotes in Sydney, clicking on 3 of the 5 ads on this Google Search are costing you up to about $500 extra compared to if you made an enquiry directly:
If you want to compare three quotes, make 3 enquiries rather than getting a Solar Quotes company to do it for you. It is literally costing people up to about $500, so it’s worth making the change.
Even better, clicking on organic search listings on Google rather than ads helps keep costs down for local businesses. It’s a well-known problem that larger companies don’t pay much tax here in Australia, and so all of us are able to help local businesses during these uncertain times one click at a time by simply clicking on organic search results rather than ads.
Summary
Like every industry, there are issues to watch out for when going solar, but most of it can be avoided by simply paying ‘enough’ to ensure you are getting a good quality solar system, installed by a reputable installer.
Now that you have a better idea of your options, we would recommend calling a few solar installers to get some advice. See which companies are willing to listen to you, and be aware of the companies that go for the hard sell.
Once you have a better idea of what solar system you need, you can then start comparing prices.
Be sure to check the installer’s history and reputation for after-sales support. A simple Google search can reveal a lot, especially if a company has changed names over the last few years.
If you’d like to give our team a call, we’d love to help you. It normally takes around 15 minutes for us to be able to give you 3 key numbers:
The right-sized system for your home
The price points for various systems
How much you can expect to save