You’re on the verge of a major decision. You’ve seen the potential of solar power to liberate you from high electricity rates and provide energy security for your family or business. The solar installer has presented you with a slick proposal, a promising projection of savings, and a contract ready for your signature. It’s an exciting moment.
But hold on. Before you pick up that pen, take a deep breath. A solar power system is one of the most significant investments you will make in your property, a 25-year commitment to a technology and a partnership. The financial details laid out in that contract will determine whether your solar journey is a smooth, rewarding flight or a turbulent ride filled with unexpected costs and disappointment.
In the Philippines, where the culture of “usap tayo” (let's talk) is paramount, a thorough financial discussion is not just acceptable—it’s expected. A professional installer will welcome your questions and provide clear, transparent answers. An installer who is evasive or pressures you to sign quickly is waving a major red flag.
This guide is your financial checklist. These are the crucial questions you must ask to dissect the quote, understand the true return on your investment, and protect yourself from hidden costs. Don't sign anything until you get satisfactory answers to every single one.
Section 1: Deconstructing the Quote – The True Cost of a Solar Power System
The total price on a quote is just a number. To truly understand it, you need to break it down into its core components and metrics. This is how you accurately compare offers and ensure you’re getting fair value.
1. Can I get a detailed, itemized breakdown of the total cost?
A single lump-sum figure is not enough. A transparent quote should clearly itemize the costs for all major parts of the project. This includes the solar panels, the inverter, the mounting hardware and racking, labor, and all associated professional fees. This level of detail is essential when you compare solar quotes from different companies.
2. What is the total cost in Philippine Pesos per watt (₱/watt)?
This is the single most important metric for comparing the core cost of different systems. To calculate it, simply divide the total system cost by the system's size in watts. For example, a 5-kilowatt (5,000-watt) system quoted at ₱250,000 has a cost of ₱50/watt. This metric helps you compare offers apples-to-apples, even if the proposed system sizes or brands are slightly different.
3. Are all permit and application fees included in this price?
A turnkey solar project involves a significant amount of paperwork. This includes fees for LGU Building and Electrical Permits, as well as application and processing fees for the Net-Metering program with your utility (like Meralco or your local electric cooperative). A professional installer should include these in their total package price, but you must confirm this explicitly to avoid surprise bills later.
Section 2: Understanding Your Savings & ROI – The Real Payback
The price is what you pay; the value is what you get. The financial attractiveness of solar lies in its long-term savings. You need to scrutinize how these savings are calculated to ensure the projections are realistic, not just optimistic sales tools.
4. Can you show me a detailed projection of my savings over 25 years?
A proper financial projection should be more than just a simple payback period. It should be a year-by-year cash flow analysis showing your estimated savings. It should clearly state the assumptions used, which leads to the next critical question.
5. What assumptions are you using to calculate my payback period and Return on Investment (ROI)?
The ROI is only as accurate as the assumptions behind it. Two key assumptions to question are:
- Your Current Electricity Rate: Did they use the average rate from your last few Meralco bills?
- The Electricity Price Inflation Rate: This is the most important one. What annual percentage increase are they assuming for future electricity prices? A high, aggressive assumption (e.g., 10% per year) will make the payback period look deceptively short. A more conservative rate of 3-5% is generally more realistic. Digging into the details is essential for creating a realistic solar ROI guide.
6. Does this savings projection account for solar panel degradation?
All solar panels lose a tiny fraction of their efficiency each year (typically 0.5% or less). While small, this adds up over 25 years. A meticulous and honest proposal will factor this slow degradation into its long-term energy production and savings estimates.
Section 3: The Payment Process – How and When You Pay
Understanding the flow of money is crucial for managing your budget and protecting yourself from risk. The payment schedule should be tied to clear, tangible project milestones.
7. What is your exact payment schedule?
There is no single industry standard, but a common and fair schedule might look something like this:
- 10-20% upon contract signing (as a deposit).
- 50-70% upon delivery of all major equipment to your site.
- The final 10-30% upon successful system commissioning and passing of final inspections.
Be extremely wary of any installer demanding a very large down payment (50% or more) before any equipment has even been ordered or delivered.
8. What specific project milestone triggers each payment?
Get this in writing. Payments should be tied to concrete progress—like "permit approval," "equipment delivery," or "passing final inspection"—not just the passage of time. This ensures the installer is motivated to keep the project moving forward.
Section 4: Financing and Incentives – Making It Affordable
For many Filipinos, paying cash upfront isn't feasible. A good installer should be knowledgeable about the different financing avenues available.
9. Do you offer in-house financing, and what are the detailed terms?
Some larger installers offer their own financing programs. If so, you need to ask all the standard loan questions: What is the interest rate? How long is the loan term? Are there any processing fees or pre-payment penalties? These are all critical installer financing questions to clarify.
10. Do you have partner banks that you can recommend for solar loans?
Many banks in the Philippines now offer "green" loans or specific solar financing products. Your installer should be able to guide you toward financial institutions that have experience with these types of loans, which can often streamline the application process.
11. How do government incentives, like the VAT exemption, affect my final cost?
The Renewable Energy Act of 2008 (RA 9513) provides incentives, including a VAT zero-rating on the sale of renewable energy equipment. Ask your installer how this benefit is reflected in your quote. It should directly lower the cost of the components.
12. Can you explain alternative options like solar leasing or Power Purchase Agreements (PPAs)?
These models involve a third party owning the system on your roof while you simply buy the power it produces at a fixed, lower-than-utility rate. While there are often no upfront costs, the long-term savings are typically less than with direct ownership. Ask if they offer these and for a clear explanation of the terms.
Section 5: The "What Ifs" – Protecting Your Investment from Hidden Costs
A contract should protect you not just when things go right, but when they go wrong. These questions probe the potential for unexpected financial burdens.
13. What are the potential hidden costs I should be aware of?
A professional installer will have already identified these during their site assessment, but it’s crucial to ask. Are there any potential additional charges for things like upgrading an old electrical switchboard, unexpected roof repairs, or extensive trenching for wiring? A transparent discussion about potential solar hidden costs is a sign of an honest installer.
14. What are the costs associated with a warranty claim?
This is a huge one. A product warranty might cover the cost of a new inverter, but who pays for the shipping of the new unit and the labor for the technicians to replace it? Clarify these details. Many installers’ workmanship warranties will cover this labor for an initial period, but you need to know for how long.
15. What will my electricity bill look like after going solar? Will it be zero?
For grid-tied systems, a "zero bill" is extremely rare. You will still have to pay fixed charges from your utility, such as distribution and metering fees. A good installer will set realistic expectations, explaining that your goal is to dramatically reduce your bill, not eliminate it entirely.
The financial conversation is the most important discussion you will have with your solar installer. By asking these tough but necessary solar financial questions, you are doing more than just vetting a company; you are taking control of your investment. You are ensuring that your contract is not a leap of faith, but a well-understood agreement that paves the way for a financially sound and rewarding solar future.