Most "how to read your solar proposal" guides give you a generic checklist: check the system size, check the equipment, check the financing. That's not wrong, but it's not what actually costs people money. What costs people money is specific numbers on specific lines — numbers that are technically accurate and functionally misleading. Here's what to check on each line, and why.
The Tax Credit Line That Shouldn't Be There Anymore
Start here, because it's the single most common error on 2026 proposals and it's a big one. Under the One Big Beautiful Bill Act, signed July 4, 2025, the 30% Residential Clean Energy Credit (Section 25D) ended for any system where you pay the expenditure after December 31, 2025. If you're buying a system for cash or financing it with a loan in 2026, there is no federal tax credit. Full stop.
If your proposal shows a "price after 30% federal tax credit" line and you're purchasing (cash or loan) in 2026, that installer is either running an outdated pricing template or deliberately padding your expected savings. Ask them directly: "Is this credit actually available to me, and under what section of the tax code?" A straight answer will either correct the number or explain a narrow exception that doesn't apply to most homeowners.
There's one real exception worth knowing: leases and PPAs. In those structures, the solar company (not you) owns the system and can still claim a 30% credit under Section 48E, as long as the system is placed in service by the end of 2027. Some of that value gets passed to you through a lower monthly payment — but it's the installer's credit, not yours, and it shows up nowhere on your tax return. If a salesperson tells you "you still get the 30% credit" on a lease, ask them to point to exactly where.
The Cash Price vs. the Financed Price
Compare these two numbers side by side, and if the proposal only shows one, ask for the other. The gap between them is usually a dealer fee: a markup the lender charges the installer for offering you a low advertised rate (0.99%, 1.49%, sometimes even 0%), which the installer then rolls into your loan principal rather than eating themselves.
Dealer fees typically run 15-30% of the system cost. On an $18,000-$31,000 system — the typical range for a residential install in 2026 — that's $2,700 to $9,300 added to what you finance, invisible unless you ask for the cash price. Before 2026 this was partly masked, because the 30% tax credit refunded some of that overpayment. Now that the credit is gone for purchased systems, a dealer fee is a straight, unrecovered loss. The math: Dealer Fee = Financed Amount − Cash Price. Ask for both numbers and do that subtraction yourself.
The Per-Watt Price
The national average for a fully installed residential system in 2026 runs roughly $2.50 to $3.50 per watt before any incentives, with most sources clustering around $2.60-$3.00/W. To find your per-watt price: take the total system cost and divide by system size in watts (a 7.5 kW system is 7,500 watts). If your number comes out north of $3.75-$4.00/W without an unusual reason (steep roof, complex electrical work, premium panels with materially better warranties), ask what's driving the difference. "Financing convenience" is not a good enough answer — that's the dealer fee again, showing up in a different line.
The Production Estimate and Its Degradation Assumption
Every proposal shows a Year 1 production estimate in kWh. Buried in the assumptions (sometimes in an appendix, sometimes not shown at all) is the annual degradation rate used to project output over 25 years. NREL's meta-analysis of over 2,000 real-world panel measurements puts the median at 0.5% per year for standard crystalline silicon panels — meaning a system producing 10,000 kWh in year one is producing roughly 8,800 kWh by year 25, about 88% of original output.
The manufacturer's performance warranty usually guarantees a floor, not a forecast: at least 80% output at year 25 is the industry-standard warranty minimum, which is a legal guarantee, not what the panels will actually do. If your proposal's savings projection uses a degradation rate lower than 0.5%/year without specifying a premium panel line (Panasonic and SunPower-tier panels can run 0.25-0.3%/year, hence the better output), that's an optimistic input inflating your 25-year savings number. Ask which rate they used and why.
The Escalation Rate Driving Your "Savings"
This is the line that does the most quiet damage to a savings projection, and it's rarely labeled clearly. Somewhere in the proposal's financial model is an assumed annual increase in your utility's electricity rate — the number the whole "you'll save $X over 25 years" claim is built on. Industry proposals commonly assume 3-4% annual escalation, and some go conservative at 2%. Recent utility rate escalation studies put real-world increases closer to 6% in several markets — meaning a 3% assumption can materially understate what you'd pay without solar, which sounds good for you, except when proposals go the other direction and use an inflated escalation rate to make an expensive lease or PPA escalator clause look like a bargain by comparison. Either way: ask for the specific percentage used, and independently check your utility's actual rate history for the last five years rather than taking the assumption on faith.
If You're in California: the Export Credit Line
Under NEM 3.0 (technically the Net Billing Tariff), solar exported to the grid is credited at a rate tied to the Avoided Cost Calculator — what it would have cost the utility to buy that power wholesale at that hour — not your retail rate. In PG&E territory that blends out to roughly $0.05-$0.09/kWh across the year, against a retail rate of $0.35-$0.55/kWh. SCE and SDG&E run similarly. If a proposal still shows export credits calculated near your retail rate, or describes "1-for-1 net metering," it's using NEM 2.0 math that hasn't applied to new interconnections since April 2023. There is a small standard adder ($0.0088/kWh for 2026 interconnections, $0.036/kWh for CARE/FERA customers) locked in for nine years from your Permission to Operate date — real, but not enough to change the fundamental math that batteries, not exports, are what make NEM 3.0 solar pencil out for most California homeowners.
The Line That Isn't There: Contract Cancellation Terms
Finally, check what's missing. A proposal should specify — or point you to a contract section that specifies — your right to cancel, any restocking or design fee if you do, and what happens if permitting or utility interconnection takes materially longer than promised. If none of that is addressed anywhere in the paperwork you're handed before signing, that's not neutral; it's a document written for one side.
None of this means solar is a bad deal in 2026 — the underlying economics for many homeowners, especially with a well-sized battery under NEM 3.0 or a rate-escalation hedge in high-cost utility territory, still work. But "still works" is a conclusion you should reach after checking these specific lines against real numbers, not one you should take from a proposal's bottom-line savings figure.