Contractor bids, explained like you're 5
Three bids put on the same footing in plain words: what each covers, how the equipment was sized, payments, licenses and warranties, and how to check an incentive. It names no contractor or brand.
Explain it like I'm 5
A bid is a contractor's written offer to do a job for a price. Think of it like comparing grocery lists, not just totals. Bids from different contractors often cover different work. Lining them up part by part shows what each one includes.
This explains. It does not advise.
Where all four AIs agree is the solid ground. Where they disagree is exactly what to ask each contractor, your local permit office, and the program that offers an incentive. This guide names no contractor or brand and never says an incentive applies to you. Incentives change, so check the dated rules on this page and the program itself.
Got bids? Put them side by side.
Attach up to three bids for the same project (contractor, solar or heat pump) as PDFs or photos. ChatGPT, Claude, Gemini and Grok line up scope, equipment, size, price, payments and warranties, list what each bid leaves out, and say how to check any incentive a bid counts. Cover your name, street address and account numbers first, and turn on Private mode to keep the chat out of your history.
Compare my contractor bidsFree account: 3 questions, no card.
What to line up across bids
Six parts of a bid. A low total can leave work out, so compare part by part.
Scope of work
Scope of work means the exact tasks the bid includes and leaves out. Check removal of old equipment, repairs, cleanup, hauling waste, and finishing. A task that is not written down may not be included.
What to compare
- Compare every task included in each bid
- Check removal, repairs, cleanup, hauling, and finishing
- Mark tasks one bid leaves out or leaves unclear
Watch out for
- Vague words can hide extra charges
- Do not assume silence means inclusion
- Verbal promises may not be enforceable as bid terms
Equipment and sizing
This part lists the materials and equipment and explains how the system size was worked out. For a heat pump, compare a heating and cooling load calculation. For solar, compare past energy bills, the roof, and shade, along with the system size and listed equipment.
What to compare
- Compare system size and listed equipment
- Ask how solar bills, roof, and shade shaped the size
Watch out for
- A guess based only on home size may not explain the choice
- Generic equipment descriptions make bids hard to match
- Bigger or smaller is not automatically better
Price and payment schedule
This shows the total price, what it includes, the deposit, and when later payments are due. It should also explain how job changes are priced and approved. Put these terms beside the work and equipment they pay for.
What to compare
- Compare total prices and included costs
- Compare the deposit and payment stages
- Check written approval for changes and added costs
Watch out for
- A low total may leave out needed work
- Unclear change terms can increase the final price
- A large advance payment can reduce your protection if work stops
License, insurance and permits
A license is government permission to do certain work, insurance can cover certain losses, and a permit is local approval followed by inspections when required. Check that the contractor has what this job needs and handles the required permits. Rules differ by state and town, so confirm them with the local permit office.
What to compare
- Check the license required for this job
- Ask for proof of insurance
- Confirm who pulls permits and arranges inspections
Watch out for
- State and town requirements differ
- Do not assume the contractor handles permits
- Work without required permits can create later problems
Warranties
A warranty is a written promise about repair or replacement under stated conditions. The equipment warranty comes from the maker, while the workmanship warranty covers the contractor's installation work. Compare coverage, exclusions, and who handles a claim.
What to compare
- Compare equipment warranty coverage
- Compare the contractor's workmanship warranty
- Check who honors each warranty and handles claims
Watch out for
- Parts coverage may not include labor
- Equipment and installation problems may have different warranties
- A promise not included in writing may be difficult to enforce
Incentives and rebates
Incentives and rebates can affect a bid's stated price or savings. They change over time and differ by place, so check the program itself. Get any incentive counted in the price or savings in writing, including who is responsible for applying.
What to compare
- Separate the bid price from claimed incentives
- Check the program offering the incentive
- Get every claimed price or savings effect in writing
Watch out for
- A contractor's estimate is not confirmation
- Eligibility can depend on your documents and location
- Time-sensitive program details can change
Rules to know
- Energy Efficient Home Improvement Credit
- The IRS page says this federal tax credit can be claimed only for qualified energy-efficient improvements made through December 31, 2025, so improvements made in 2026 or later do not qualify.
- Energy Efficient Home Improvement Credit | IRSchecked November 3, 2026
- Residential Clean Energy Credit
- The IRS page says this federal tax credit, which covered home solar panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage, is not available for any property placed in service after December 31, 2025.
- Residential Clean Energy Credit | IRSchecked November 3, 2026
- How a solar system is sized
- The FTC says the size of a home solar system depends on your average energy use and your home's characteristics and location, so look at the electricity you used in the last year on your utility bills. How much power it makes depends on the system's size, the hours of direct, unshaded sunlight your roof gets, the roof's pitch, age, condition and direction, and snow, dust or shade. Bids should state the system's size and expected output, the full installation cost including permit fees, and the equipment and workmanship warranties.
- Solar Power for Your Home | FTC Consumer Advicechecked November 3, 2026
- State-run home energy rebates
- Energy.gov says the Department of Energy's Home Energy Rebates (the HOMES and HEEHR programs) are now available in select states, with details on active state, territory and Tribal programs to come. Contact your State or Territory Energy Office for their status and eligibility rules where you live.
- Home Energy Rebates Program | Department of Energychecked November 3, 2026
- Three days to cancel a sale made at your home
- The FTC's Cooling-Off Rule gives you until midnight of the third business day to cancel certain sales made at your home, and the seller must tell you about that right and give you cancellation forms. It does not cover sales under $25 at your home, a sale finished at the seller's permanent place of business, a sale needed to meet an emergency, or a repair you asked the seller to come and do. Some state laws give you more rights.
- Buyer's Remorse: The FTC's Cooling-Off Rule May Help | FTC Consumer Advicechecked November 3, 2026
- Before you hire a contractor
- The FTC says to consider only licensed and insured contractors (check the license with your state or county, and ask for proof of insurance), to get multiple written estimates that describe the work, materials, completion date and price, and not to pay the full amount up front. Some states limit how much a contractor can ask for as a down payment.
- How To Avoid a Home Improvement Scam | FTC Consumer Advicechecked November 3, 2026
How to compare three bids, step by step
- Put the three written bids beside each other.
- List every included and excluded task in matching columns.
- Match equipment, system sizes, and sizing work across bids.
- Match total prices, included costs, deposits, payment stages, and change rules.
- Verify licenses, insurance, permits, inspections, and warranties with the relevant parties.
- Check any incentive with its program and record all claimed effects in writing.
Common mistakes
- Comparing only totals can hide missing removal, repairs, cleanup, permits, or different equipment.
- Treating spoken promises as written terms can leave important work undocumented.
- Accepting a system size without its supporting calculation can make equipment comparisons misleading.
- Ignoring payment and change terms can expose you to added costs.
- Counting an incentive without checking the program can make the comparison inaccurate.
Questions to ask each contractor
Ask each contractor, your local permit office, and the program that offers an incentive.
- What work is included, and what work is left out?
- How did you work out the system size for my home?
- What does the total include, and when are payments due?
- How are changes priced and approved in writing?
- What license and insurance do you have, and who handles permits?
- What do the equipment and workmanship warranties cover, and who honors them?
Official help:
How sure is this guide?
How closely the four AIs agreed
ChatGPT, Claude, Gemini and Grok each researched comparing contractor bids on their own, with web search. The score is how closely their answers matched.
92/ 100Strong agreement
Sources
The AIs searched the web and used these. AI can get details wrong, so the dated numbers above are copied by hand from the official source beside each, and your own documents and the people who issued them are the final word.