Solar companies flocking to Colorado. How to know if solar is right for your home, avoid scams

COLORADO SPRINGS, Colo. (KRDO) - 300 days of sunlight in Colorado. It's the calling card for investing in solar panels for your home. With an influx of out-of-state solar companies flocking to sunny Colorado to garner your business, how do you know if it's a worthy investment for you?

You've likely heard the sales pitch: solar panels will save you hundreds of dollars a month on your electric bill, and if you choose to go solar, you won't have an electric bill at all.

KRDO13 Investigates found both of these claims can be a way to get your business without telling you the full story.

One key with solar power is placing them on your home in an area with maximum sunlight exposure throughout the day.

"If you have a good south-facing roof and you're in an area that has high electrical rates. It has a very quick payback period," Co-owner of Steel City Solar in Pueblo West, James Brown said.

Homeowners who choose solar will still have a utility bill every month. However, experts say it will be significantly less once the panels are up and running, banking power each day for days with overcast skies.

"Down to $10 in a perfect world. But then you're paying sometimes more than what your bill was originally for the first 10, 15, 20 years," Devin Moeller, Senior Renewable Energy Manager for Black Hills Energy said.

Although a drop in your monthly utility bill is a profitable endeavor in the long term, Moeller says consumers must consider the full price tag of purchasing a solar system and compare that to their monthly utility bill every month.

The average solar system costs anywhere from $16,000 to $30,000, according to Steel City Solar. The majority of people take out a loan on it, similar to financing the purchase of a car. It does come with some attractive tax benefits, like a federal tax credit.

"I would say maybe 5 to 10% of people understand the tax credit and what it can be used for. It's a liability offset and not a credit to your purchase price," Moeller said.

The key there is tax liability. You must owe at least 30% of your solar system's price tag in federal taxes to receive the credit.

"Assuming you have the appropriate tax liability, that tax credit can then offset that. You would then benefit and be able to use those credits," Moeller said.

This valuable tax credit does not apply to people who choose to lease solar, instead of buying it outright, either by paying upfront with cash or by taking out a loan for it. If you do choose to lease solar, through what's called a power purchase agreement, the solar company is actually the one who reaps the benefits of that tax credit. This is typically why solar experts recommend against the leasing option.

"Usually it's a liability," Colorado Springs realtor, Shelly Roehrs said.

Roehrs holds a differing opinion on the value of investing in solar panels. She claims that solar isn't an asset until it is completely paid off, and if it isn't paid off when you go to sell your home, it could end up costing you money.

"Some solar panel mortgages, loans are not transferable, which means you either have to pay it off at closing or your buyer has to figure out how to pay for that at closing," Roehrs said.

The common ground for realtors and solar companies is agreeing that only people who are in their forever homes should consider it.

"If you're going to be in your home for 3 to 5 years, not a good idea. Not a good idea," Roehrs said.

With the solar industry growing, it's never been more important to find a reputable and reliable company to install the panels.

"I would say we've got 80 installers that are active within our service territory and probably 90% of those are from from out of the area, out of the state of Colorado," Moeller said.

The Better Business Bureau of Southern Colorado tells KRDO13 Investigates there are only six solar companies that are both licensed and trained to install solar panels.

Those companies are:

• Absolute Comfort, Inc.
• Adams Electric, Inc.
• Alternative Power Solutions
• Garman Energy Consultants
• Proud American Electrical & Solar
• Steel City Solar LLC

This is why experts recommend getting multiple bids, reading online reviews, and double-checking the licenses of companies you are considering. Even more importantly, they say never to pay for an entire solar project upfront.

"Choosing a good local contractor who has a service base, much like your plumbers, your local electrical outfits, they can come fix your lights because they're the ones that put your lights in," Tyler Surat, co-owner of Steel City Solar said.

Surat, Brown, and Moeller all recommend going local for your solar needs. They say this allows for quicker installation, same-day repairs, and a lower likelihood of getting ripped off once a contract is signed.

"Treat as if you were going to buy a car or if you're shopping for a home," Moeller said.