Cost of a 4kw solar system

[Smidgen]

Yes I know this is a how long is a piece of string question, and I may get shot down in flames but

is 5-6 k a realistic price for a 4kw system at the moment?

 

[SolarCity]

I wouldn't worry too much about price. If you're getting that price AND a good system/service then you're doing well. If you get that price and the installer cuts corners then you'll wish you chose more wisely.

 

[Smidgen]

Yes I am looking for a guide price really.

Could you tell me what you would ask to avoid getting someone who cuts corners?

I generally get a few quotes and see who I think will do the best job, who sounds like they take pride in their work, but its often difficult to tell. Had a double glazing disaster where the owner of the business was great, seemed competent ,enthusiastic, a genuine type and in the event was; but the window fitter who also turned out to be the surveyor once the deposit was paid,was a disaster. After the windows were installed really badly I discovered the word "sub contractor". Which is something I must be aware of this time I guess. The owner did put most things right but there must have been about 15 return visits.

So if 5-6k is realistic what sort of deposit should I be prepared to pay, someone wants 2/3rds up front which has put me off him completely, although he was my front runner til then.

 

[SRE]

Not sure how a business can install at 5k and be sustainable. We certainly couldn't.

 

[SRE]

You're only allowed to ask for 25% upfront under RECC guidelines. Anyone asking for 66% is potentially having financial problems perhaps as a result of cheap as chips prices.

 

[Smidgen]

You're only allowed to ask for 25% upfront under RECC guidelines. Anyone asking for 66% is potentially having financial problems perhaps as a result of cheap as chips prices.

Thank you, both comments are helpful. He wasnt the cheapest, but up til then I thought he was the best. I will possibly have to start over.

 

[SpitfireW'sale]

Thank you, both comments are helpful. He wasnt the cheapest, but up til then I thought he was the best. I will possibly have to start over.

You would do well to post the town / city you live in and invite a couple of nearby installers who post regularly on this forum to give you a price. There are some knowledgeable people here.

 

[Worcester]

According to RECC you are allowed to take 60% as advanced payments in accordane with RECC guidelines.

No more than 25% as deposit

We have done this in the past, and has no reflection on our financial stability

Of course those sums must be placed in escrow based Client accounts AND protected by insurance.

6.3 Deposits and further advance payments

If a member requires the consumer to pay a deposit when the contract is signed, this will constitute a reasonable percentage of the estimated overall costs of the work as set out in the contract, for example 15 per cent. It should not exceed 25 per cent under any circumstances. Members may only use this money for work under the contract, for example for purchasing goods. Members will repay it promptly if the contract is cancelled in line with the conditions set out in section 6.2 of this Code. This is a very important requirement of the Code.


If the member subsequently requires a further advance payment to be made by the consumer, this must constitute a reasonable percentage of the overall costs of the work and will only be used for work under the contract, for example for purchasing goods. Under no circumstances can the deposit and the further advance payment, taken together, exceed 60 per cent of the estimated overall costs of the work. Members can only require a further advance payment no more than three weeks before the agreed delivery date of all the goods to be installed. Members will set out clearly in the contract the amount and timing of all payments required.


Members must protect any deposit and any further advance payment, such that, if they should fall into receivership, administration or bankruptcy before the contract has been completed, the consumer will be able to have his or her contract completed at no additional cost by another Code member.

Members can place such funds in a 'client' or other third party account or use the protected payment scheme which the Code administrator has arranged for members. The Code administrator has prepared guidance on third party accounts here. Such funds must be separate from those accounts linked to the member's own credit and banking facilities and should only be used with the consumer's consent. (This can be obtained in advance when the consumer signs the contract.)

In addition, any deposits and advance payments must be insured. For this purpose, the Code administrator arranged an insurance scheme with Quality Assured National Warranties (QANW) in November 2010. In February 2012 this became part of the Deposit and Workmanship Warranty Insurance (DAWWI) Scheme. Members who take deposits and advance payments, and who cannot demonstrate that they have equivalent cover in place should take part in the Scheme. (See also section 8.1 below.) Members must inform consumers accurately about the arrangements they have in place to comply with this section of the Code.
Where a member uses a consumer's money, paid in advance, to purchase goods, and where those goods are delivered to the member, the member will hold the goods on trust for the consumer and will keep them separate from its own goods and those of third parties. The member will keep such goods properly stored, protected, insured and identified as the consumer's property. The consumer should be able to inspect or repossess the goods at any time. The legal title to those goods, or the proportion of them that has already been paid for, should pass directly to the consumer. In this way, if the member falls into receivership, administration or bankruptcy before the installation takes place, the goods will remain the consumer's property.

So someone asking for 2/3 is breaking the codes by which they MUST work, 60% subject to the above is OK. (25% deposit + 35% no more than three weeks before the agreed installation date.)

 

[FB.]

someone wants 2/3rds up front which has put me off him completely, although he was my front runner til then.

Sounds like a business that's lacking working capital - how long will it be before the business decides to close (or goes into administration)? How will your warranty claim or after-sales support be affected if the business isn't trading in a year or two?
Probably your money will be needed to buy most or all of the kit, with the remaining balance around £1.5k being to cover labour charges and back-office paperwork, certification, profit margin etc.

 

[Smidgen]

You would do well to post the town / city you live in and invite a couple of nearby installers who post regularly on this forum to give you a price. There are some knowledgeable people here.

OK Will do. TBH I had thought of it but had presumed it was against the rules. Will start a new thread.

I also wondered whether there are any feedback sites you would recommend? I have found a couple googling but most businesses seem to have 1 recommendation written by themselves or their immediate family.

 

[SRE]

Maybe just me then - on a 4kwp system I can't see why anyone would need to take 60% deposit. If you're worried about payment pay for a credit check on customer and include it in the price. It's a different kettle of fish with bigger systems.

IMHO this is what's killing the pv business for installers who want to maintain a sustainable business. We went to a cheap as chips install last week where 6 months after installation there were leaks in the roof & when the roofer got on the roof to sort it out (the installation company were nowhere to be found) 2 of the panels weren't even connected. Not so cheap for the installation now. You get what you pay for.

 

[SRE]

Yougen is quite good

 

[Smidgen]

Re the other posts. Thank you.It does sound like my chap is working within the rules, he's asked for 15% on ordering, 35% 2 weeks prior to install, rest on completion. But I thought that a bit high and yes I dont think its building trust in the industry

 

[Smidgen]

Yougen is quite good

That is really helpful thank you, just what I was after.

 

[jason121]

We stopped taking deposits a while back, got to messy

 

[Gavin A]

Re the other posts. Thank you.It does sound like my chap is working within the rules, he's asked for 15% on ordering, 35% 2 weeks prior to install, rest on completion. But I thought that a bit high and yes I dont think its building trust in the industry

for reference, we ask for 10% initial deposit, 50% invoiced 21 days in advance of the installation, payable before 7 days of the installation, then 40% due upon completion of the work and receipt of the MCS certificate and paperwork.

The reasons for this are twofold

1 - This massively reduces our risk level as a company, as it prevents us ending up in a situation where a customer has the full installation, and ends up dragging out payment for months, or deciding to cancel the installation after we've bought the equipment. This in turn allows us to reduce the profit margins that would otherwise be needed to cover that level of increased risk, and pass those savings on to our customers. To put this another way, why on earth would any customer that we've had no previous dealings with think that we should be installing £6,000 worth of equipment on their house without any up front payment - you'd not expect to be able to have £6,000 worth of shopping delivered from tesco on account (unless you'd built up a long trading history with them / were paying high interest rates on that credit), so why would you expect a solar company to instantly grant you that level of credit facility?

2 - Yes, it is to do with cash flow. In a busy month we can turnover £250,000 of stock, in a quiet month maybe just £30k. Any business that has £200k lying around in the bank to cover their busy months is doing something wrong in my opinion, that's dead money. If they don't, and they don't take deposits, then their ability to cover the costs of your equipment in the busy months could well rely on the speed with which other customers make their payments. Get 2-3 customers in a row paying by cheque, and they could well struggle to actually pay for your kit on time if their credit limit at the supply is maxed out. We don't have that problem, even though the 60% doesn't actually even cover the costs of the kit, 60% from every customer gives us a sufficient financial buffer to mean that we can always pay for the kit on time, and at busy periods can order in the kit weeks in advance to ensure that our customers don't end up losing out when the suppliers run out of panels.

In the november 2011 rush period we were able to place orders for around £350k of stock inside the first 14 days of the announcement, including probably £200k inside a 2-3 day period, which covered us for a massive ramp up in orders for that 6 week period purely on the basis that we were taking deposits from customers as soon as we were allowed under the REAL rules. There's a hell of a lot of companies out there who had to let a lot of customers down in that period because they simply couldn't get the stock because they hadn't taken deposits and didn't have the cash or credit available to buy the stock early enough - we didn't let a single customer down.

So no, I don't see it as being a sign of anything other than a sensible policy to absolutely minimise the potential for anything to go wrong with the ordering process in advance of any installations.

I hope this gives you a bit of an insight into the likely rationale behind the company wanting to take that level of up front deposit.

 

[infinity]

So where about's are you based Smidgen??

 

[Smidgen]

Hi, I am in Watford, Herts

 

[infinity]

Can i ask what panel/ inverter combination you have been offered for that price?

 

[Smidgen]

Some forum members have approached me and may be quoting. I dont think it would be sensible to start posting that as it might put them off. Also no-one has been to site. Sorry if that seems coy, but from what is being talk about elsewhere on the forum I dont think its poor quality kit if that is what you are thinking.

 

[pwboston]

Im afraid there are people out there doing jobs for <£5k, we recently won an order, using an SMA 3600TL inverter and solarworld panels (good quality kit) and a scaffolding company because it was on a house with obstructions below etc etc, and 2 days into the customer saying yes, the customer rings up and cancels because someone is doing the whole job, all in for £5k. (Not SMA or solarworld though).

So in answering your question (and our customers) can we do good quality work for <5 grand, the answer is no, so we said you go to the other chap and get it done. We cannot move on our price.

 

[puddy]

I never pay up front. Most installers have 30 day credit accounts with their suppliers. If you're being asked to pay upfront it may show a company in trouble.

I have just brought brand new audi Q3 4x4 the dealer asked for a deposit in may and I refused, but I have pride in myself and always pay my bills on time when the work been done. The dealer got paid on the 1 Sept




And always pay by credit card

 

[Gavin A]

I never pay up front. Most installers have 30 day credit accounts with their suppliers. If you're being asked to pay upfront it may show a company in trouble.

I have just brought brand new audi Q3 4x4 the dealer asked for a deposit in may and I refused, but I have pride in myself and always pay my bills on time when the work been done. The dealer got paid on the 1 Sept




And always pay by credit card

we'd not work for you then.

yes we have credit terms, no we don't have big enough credit terms to manage 10 installations at a time.

credit card means an extra 1.5% in costs to the supplier, and you want to pay by credit card after you've already had the installation carried out.... bit of a **** take tbh.

 

[puddy]

I would always check payment terms before work started. It works both ways if I paid you up front how do I know if that's the last time I would see you again

 

[SRE]

As Gavin says 30 day credit accounts don't go anywhere near covering the credit needed for multiple installations in a month. Indeed if an installer only uses their 30 day credit facility they are more likely to go under because at the prices we're getting screwed down to at the moment you wouldn't be able to make a minimum wage.

To put the boot on the other foot - how do we as an installer know that you have a good credit history and pay your bills on time and how do we know that even if you do have that you'll pay us on time? I have sweated for 10 days over the odd customer here or there who were realy nice people but had no urgency to make payment for the work they had had done.

I'd also suggest that an Audi dealer has a much healthier cash flow than most pv installers and also extended credit from Audi themselves. Personally I'd never take the risk of ordering bespoke equipment for a customer who wouldn't commit to a deposit. Your deposit is lodged in a client account completely separate to the main business account and protected in case the business goes bust. There's no risk to the customer but potentially a large risk to the installer.

If you decide not to pay for your Audi you're not given the keys, if we've installed panels in your roof how do you suggest we remove them if you haven't paid for them and how would we retrieve the labour costs for a job that isn't paid for?

Personally, I prefer working with business people every time. They are usually prepared to pay the right rate for a quality installation and completely understand the normal T&C's of a pv installer.

 

[jason121]

I thought the deposits were locked into a third party account until customer gives permission to release money ?????

 

[jerriais]

I would always check payment terms before work started. It works both ways if I paid you up front how do I know if that's the last time I would see you again

All the deposits paid by our customers are protected by deposit insurance so the money would be refunded even if we ceased trading. I agree with Gavin, the installer takes a greater risk than the customer.

 

[whinmoor]

All the deposits paid by our customers are protected by deposit insurance so the money would be refunded even if we ceased trading. I agree with Gavin, the installer takes a greater risk than the customer.

Ditto here.

 

[puddy]

I have never heard of deposit insurance. Some of you say you'd would rather work with businesses' are these the one who change from 30 day to 60 to 90 day payment terms after you done the work?

 

[jerriais]

I have never heard of deposit insurance. Some of you say you'd would rather work with businesses' are these the one who change from 30 day to 60 to 90 day payment terms after you done the work?

We are with QA National Warranties. They insure our deposit and also our 10 year workmanship warranty.

Solar panel installers are quite lucky in that to claim Feed In Tariffs a customer needs to have proof that they have paid in full for the PV system so they're usually very keen to pay asap.