Upfront Cost

[wgpajtdm@yahoo.com]

Upfront Cost

How much money is reasonable for a contractor to require up front before any physical work is done at the job site? In this case the project is funded outright by a homeowner, no loans, etc. The contractor is an experienced solar installer, is local, and has an excellent reputation with both consumers and in the industry.

[organic farmer]

I would think somewhere between one-third and half.

[SunEagle]

I agree with organic farmer. Depending on the cash flow of the Contractor they usually require enough money up front to purchase the equipment plus a little more which can be half the total price.

[Mike 134]

Zero. That's how it works for Electrical contractors in the Chicagoland area. Since they buy from a supply house which will bill them for the materials and expect payment in 30-60 days no reason to pay anything up front.

But that's just me having worked in the industry and know how cash flow works for them.
When I had my roof redone, I gave them a certified check for 1/3 the total when the material was placed on my property. That satisfied everyone.

[wgpajtdm@yahoo.com]

OP writing here. I appreciate your comments. I was thinking this way. The contractor does have to invest sales and design time, especially since this is a ground-mount project. While many of the materials he purchases may be used on other projects, others may not. Certainly there would be an inconvenience were I to back out. He could also be charged restocking fees by his vendors and there would be shipping costs, so I believe some upfront payment is reasonable but am not inclined to go above 50%.

[J.P.M.]

OP writing here. I appreciate your comments. I was thinking this way. The contractor does have to invest sales and design time, especially since this is a ground-mount project. While many of the materials he purchases may be used on other projects, others may not. Certainly there would be an inconvenience were I to back out. He could also be charged restocking fees by his vendors and there would be shipping costs, so I believe some upfront payment is reasonable but am not inclined to go above 50%.

I'm CA and as long as I've lived here - and as allowed by law, I've always paid any contractor doing home improvement contracts 10 % of the contract price or $1,000, whichever is less as a down payment. That included my PV array done in 2013.

Contractors have usually wanted more, as apparently many of their other costumers are usually not aware of CA law that limits such terms but they quickly back off at the mention of the law - but I sure don't blame them for taking a shot - it's just business.

I've also always been amenable to partial payments or progress payments as materials or work progressed or as negotiated, also as part of a contract - I very much appreciate they are running a business - but I've always held back at least the last 20% of the contract price against satisfactory completion of the work and/or project startup. I've always made all those things and more as conditions and terms of any contract I sign. Clean jobs start with clear communication and complete, and unambiguous contracts. You only get as much as you negotiate.

[azdave]

I believe some upfront payment is reasonable but am not inclined to go above 50%.

I was not required to put 50% down but I negotiated with the installer that if I paid 75% up front, I would received a 5% discount. I had saved up the cash for purchase but was able to convince them to let me use credit cards for payments. I got all the CC perks and they absorbed the transaction fees. I 100% trusted the installer so I had no fear of losing leverage but understand many people will not be in that position and should not take that risk. My payment negotiations netted me over $1000 of savings and got me to $1.68/watt for a turnkey install in Phoenix in late 2014 which was an awesome deal. ROI ended up being under 6 years.

[bcroe]

I would expect, the up front (non returrnable) on a ground mount is way
more than on a generic roof mount. Bruce Roe

[wgpajtdm@yahoo.com]

Bruce, your comment is most interesting, could you expand on your reasoning? I realize that ground mount requires additional hardware and increases overall cost, but that hardware is included in the overall cost and should not change the percentages I think. If the contractor had to return material, penalties, restocking fees and shipping costs should all be proportional. Is there another factor I am not considering? -- wgpajtdm, OP.

[Just Steve]

My contract required a 10% downpayment after site plan, building permit and POCO approval.
Final payment was sent after receiving PTO from POCO, just waiting for POCO to come on 8/23 to change my meeter then it will be all systems go.