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Sara Carbone is a content writer for Aurora Solar, developing educational content to help solar companies work more effectively. She also has her own freelance copywriting business creating tailored content for solar marketing campaigns based on several years of experience researching the industry and working with solar contractors around their pain points and goals.


Sara Carbone

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Sara Carbone is a content writer for Aurora Solar, developing educational content to help solar companies work more effectively. She also has her own freelance copywriting business creating tailored content for solar marketing campaigns based on several years of experience researching the industry and working with solar contractors around their pain points and goals.

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How To Secure Online Reviews For Your Solar Business

Posted by Sara Carbone on Jun 26, 2019 10:35:14 AM

Online reviews are a key part of a successful solar contracting business, given the fact that many consumers look to them as a trusted source of information.

Jon Eyre, director of content at customer interaction software provider Podium, told Solar Power World (SPW) that “sometimes customers [are] your best salespeople. No matter how much you train your staff, people are more apt to listen to someone that doesn’t work for your business.”

Many solar contractors strive to offer the best customer service, something that can often lead to more positive online reviews. However, securing reviews can be a challenge. Only one in ten people writes reviews all of the time though half of adults under 50 consult reviews before making a purchasing decision.

This article discusses ways a solar contractor can develop an effective review acquisition strategy. In addition to related research, Aurora spoke with Danny O'Malley, Client Engagement Manager for Utah-based solar contractor Auric Energy. Auric has a well-developed strategy for securing online reviews; they are the most positively reviewed solar provider in the U.S on SolarReviews.com.

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Why Online Reviews?

One of your best sources of leads is online reviews. They are an effective referral device and referrals convert at three to five times the rate of other channels, have a higher lifetime value, and are more profitable reports SPW.

A 2016 survey by marketing company BrightLocal found that 84% of customers trust online reviews as much as personal recommendations from family and friends. A Podium survey found that 93% of respondents said online reviews impacted purchase decisions and 82% said the content of a review convinced them to make a purchase.

Online reviews play an important role in business success. Auric’s O’Malley states that being the most positively reviewed solar company in the country on SolarReviews has been quite instrumental in his company’s success. Making your business stand out online with positive reviews on your website and various third-party sites allows prospects to research your company’s reputation and compare it to other providers.

Effective Places to Have Reviews

An obvious place to include reviews is on your company website. You can place them on your home page, sprinkle them throughout your site, and include them on a dedicated review page. Reviews can take a number of forms, from short quotes, articles about customer success stories, or even videos. Videos can be particularly effective for reaching prospects: 55% of U.S. adults say that they have watched product review videos online.

Auric Energy uses video testimonials because of the popularity of this medium. O’Malley explains that they incorporate videos in a number of places, like on social media platforms.

O’Malley also recommends looking to interview customers that “are real characters” in order to distinguish your company. He adds that Auric interviewed one of their customers who had legally changed his name to Santa Clause, asking “if you can get a video interview of a Santa Claus promoting your company, why not do it?”

Aside from featuring customer reviews on your website, it is important to have a presence on at least a few third-party review sites. In a 2018 Online Reviews Survey by ReviewTrackers, over 60% of consumers said that they are likely to check online reviews on Google before making a purchase, with Yelp ranking second at 45%, and Facebook ranking third.

Industry-specific sites that cater to solar are also helpful like Angie’s List or SolarReviews. SolarReviews, a solar business reviews site offers solar reviews categorized by product and service. O’Malley says that, aside from Google, “anybody who is a serious solar contractor should definitely have a profile on SolarReviews and should direct their customers there. Another strong candidate is Energy Sage, if the contractor feels like branching out.”

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Best Practices for Securing Online Reviews

There are a number of strategies to keep in mind when seeking to increase your number of online solar reviews.

Find the Frequency and Timing That Works Best For Your Business

Test things out to find the ideal frequency for outreach to customers about solar reviews. O’Malley describes how his company recently adopted an email marketing tool that helps them track outreach efforts and gather data on what yields the best results.

He notes that his team expects to touch base with customers at least a few times in the first year after system activation, probably at the ninety-day, six-month, and one-year marks. Since one of Auric’s offerings is a production guarantee, their customer service agents contact customers to discuss production numbers and ask for a solar review at the same time.

It also helps to contact customers when they are happiest about going solar says SPW. Perhaps this is after a week with the finished system or after their first year with solar. Experiment to see what works best.

“We usually ask for a review after they’ve received their first bill, usually about 30-45 days after their solar system is fully activated, because that's when the rubber actually meets the road,” says O’Malley.

Use the Optimal Combination of Contact Methods

Contact customers in a way that works best for your business and your particular customer profile. Text messages or phone calls can be effective as they are harder to ignore. Collect emails so that you can conduct a post-install email drip campaign that includes review requests. Marketing site HubSpot found that simple, brief, text-only emails have a better conversion rate for review collection than slick, graphic-heavy ones.

O’Malley describes how his team uses texts, emails and phone calls. First, they send a text asking for a solar review, followed by a phone call regarding the fact that they are sending over warranty paperwork and the owner’s guide with a request about leaving a review. They continue contact with periodic emails. You can also leave review request cards in person, keeping the language simple and direct with clear link information and instructions.

A note card at a Spacious co-working space in New YorkSpacious, a company that provides coworking spaces in restaurants, uses request cards to gather online reviews.

Make It Easy for Customers to Review

Make it as easy as possible for customers to review you; part of that is keeping the idea of reviewing your company top of mind. Place the request throughout your website like at the bottom of blog posts, in company emails signatures, on print marketing materials, or on the back of business cards. Download icons like the “Find us on Yelp” banner to use on both print and online marketing materials.

Send people straight into the review process rather than having them navigate multiple pages. For example, direct them right to your Google Places page or your website’s reviews page. The faster and easier it is for customers to leave a solar review, particularly on a third-party site, the more likely it will be that they will take the time to give one.

It can also be helpful to let customers know what to expect and what topics are helpful to focus on in their solar review. Asking for feedback on a specific aspect of your business can help improve the content of your online reviews.

Communicate the Importance of Reviews to Your Business

Make sure your customers know how much positive reviews matter to your company. “One of the things that's made it easier for us is priming the customer from the get-go by talking about how important word of mouth is to us and how important the reviews are. So that asking them for it later is not so much of a surprise or difficult ask,” remarks O’Malley.

Auric sends customers a survey after their first consultation with a project manager asking how it went and if they would be willing to recommend the company in the future.

Get Creative With How You Ask

It can be effective to think outside the box when asking customers for reviews. Encourage customers to share positive reviews on social media. This is a popular option for consumers, 39% of U.S. adults say they have shared their experiences or feelings about companies or products on social media sites like Facebook or Twitter.

Highly visual platforms like Facebook, Twitter, and Instagram present good opportunities for customers to share solar system photos. You may consider supplying them with high-quality photos of their own system during and after the install so they can share about the process. You may run an ad on Google or Facebook specifically asking for reviews from customers, targeting them by uploading your customer email addresses to Google or Facebook when running the ad.

Software company Dokmee asking for reviews on TwitterDokmee used a playful image on Twitter to request reviews.

O’Malley notes that Auric only uses social media for brand awareness, not to get new reviews. He states this is because, with platforms like Facebook and Google, anybody can leave a review, not necessarily just actual customers. If you do choose to pursue solar reviews on social media you can set up Google Alert using your business name to catch reviews that show up on blogs, social media, or forums—allowing you to quickly respond to both negative and positive ones.

You can include review requests on your hold message when people call. Another option is to offer incentives like a simple reward. This could be a gift card, or an offer to donate to a nonprofit that you partner with. Make sure that customers disclose they are receiving an incentive and check the rules of a third-party review site as they make have restrictions regarding incentives.

You do want to be careful not to look like you are buying reviews. You can help avoid this by specifying that you are not just asking for positive reviews or by doing something like randomly picking a reviewer each month for a special giveaway.

Handle Negative Reviews Professionally

More Americans report being influenced by highly negative reviews than by highly positive ones. Therefore, it is important to handle your negative reviews quickly and in a way that does not damage your business’s reputation.

O’Malley recommends that companies avoid overreacting to negative reviews and respond professionally. “This means not turning it into a blame game. I've always tried to turn it into a platform where you’re showing the individual customer that you're going to do the best to help them.”

He goes on to say that negative reviews can be an opportunity to show prospects that your company knows how to handle difficulties and “did their best to leave the person better than they found them.”

Marketer Neil Patel has the following recommendations for handling negative reviews: pay attention to what is said, acknowledge their comments and let them know you’re doing something about it, and don’t argue or get defensive even if you disagree. It may be helpful to dedicate review monitoring to a specific employee, particularly with regards to responding to negative reviews.

A Sunrun response to a negative online review acknowledges the customer’s feelings and offers solutions.A Sunrun response to a negative review acknowledges the customer’s feelings and offers ways to remedy the situation.

An effective online review presence can certainly help bolster your business growth by convincing more prospects to become customers. However, reviews and review sites can do more than function as marketing tools. They can allow you to connect with satisfied and dissatisfied customers and get real-time feedback on how to improve your business and the customer experience.

Have you found success with other strategies for getting online solar reviews? Let us know in the comments below!

 

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Topics: Solar Marketing, Solar Business Tips

How to Get HOA Solar Approval: Tips for Success

Posted by Sara Carbone on Jun 19, 2019 9:00:00 AM

In some areas, Homeowners Associations (HOAs) can present significant barriers to homeowners’ ability to install solar.

Before Texas enacted protective solar access laws that limited what restrictions HOAs could place on solar installations in their neighborhoods, HOAs meant a lot of frustration. Speaking to the New York Times in 2009 when he was chief executive of Houston-based residential solar company Standard Renewable Energy, John Berger (now CEO of Sunnova Corporation), said HOA prohibitions had cost SRE over $1 million in business.In Missouri, a state without policies protecting from HOA solar restrictions, there are a number of cases in court where HOAs are butting heads with homeowners that install solar.

As a solar contractor, the extent to which HOAs impact your business is dependent on your state’s laws and the HOA bylaws in the neighborhoods you target. However, there are a number of strategies you can employ to help ensure HOA approval for your customers’ PV solar systems, regardless of where you do business.

In this article, we discuss techniques compiled from interviews with solar contractors with extensive experience working with HOAs and online research to help ensure successful outcomes on projects in HOA communities—and guide your prospective customer through the process as well.

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How an HOA Can Impact Your Solar Business

HOAs are neighborhood organizations that create and enforce rules for houses or condominiums in established communities. Solar Power World states that “a major directive of the HOA is neighborhood uniformity and/or a high standard of appearance for each property.” HOAs’ concerns, and resulting rules, about solar installations tend to relate to how PV panels will affect the look of neighborhoods or property values.

These rules can impact a homeowner’s efforts to go solar. A significant proportion of American homeowners interact with an HOA: over 351,000 HOAs in the U.S. regulate about 40 million households or 53% of owner-occupied households. Therefore, there is a good chance that your prospect needs to work with one. However, about half of U.S. states have laws preventing HOAs from denying solar for aesthetic reasons, so the impact on your business is partially dependent on where you operate.

Getting Solar Approval from an HOA

It is helpful to understand the typical process for getting approval for a solar installation from an HOA so that you are better able to guide your customer through it. Usually, a customer requests an application from their HOA or gives the contractor permission to do so. While there are some customers who choose to fill out the application and send it in themselves, others prefer that the contractor do this.

Mike Busby, Co-Founder & President of Victory Solar, a leading residential and commercial installer in Texas, spoke with Aurora about his company’s extensive experience working with HOAs. He states that his company does all the HOA paperwork on the homeowner’s behalf, only getting the homeowner involved if they have to.

Bobby Custard, Solar Consultant for Pur Solar & Electrical, an Arizona-based contractor with over 40 years of electrical contracting experience, also shared his insights about interacting with HOAs. He says that after Pur Solar has given the customer everything they need to review and sign, the company notifies the HOA when they begin the permitting process. They send the HOA a copy of the plans, the proposal, and images of what the project will look like.

If the application is approved by the HOA, you can move forward with the installation. If not, you should understand the applicable laws in your state in case you are able to help your customer appeal the decision.

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4 Strategies To Expedite the HOA Application Process

There are a number of best practices to keep in mind that may help make the process of getting HOA solar approval as easy as possible and increase the likelihood of a successful outcome.

1. Know Your State’s Laws

“Solar access” laws that protect homeowners’ rights during the HOA solar approval process have been adopted by many states, including California, Utah, and Florida. Given that you may be the one educating your customers about their rights in this respect, it is important to know your state’s existing laws, whether provide protections from HOA solar restrictions, and what forms they take.

Solar access laws prevent HOAs from prohibiting solar panel installations or having contracts that restrict homeowners from installing them. However, HOAs can usually make certain requests about a system, as long as they don’t make the proposed solar system less effective or more expensive. Often HOAs are allowed to place certain restrictions on systems, like retaining the right to influence design elements of a rooftop solar array, such as requiring that all electrical wiring be placed out of sight.

California has had The Solar Rights Act since 1978, which has helped encourage the growth of solar in the state and is the basis for many other states’ protective laws. It includes protections that limit HOA ability to pass prohibitive laws but allows an HOA to impose “reasonable restrictions” on solar energy systems. These restrictions are currently limited to ones that don’t increase the cost of a proposed system by more than $1,000 or decrease its potential performance by more than 10%.

Under this law, a homeowner does have some responsibility to their neighbors when they seek to go solar. For example, in multifamily dwellings with common roof areas an applicant must notify each owner in the building about a proposal. Additionally, they might also be required to have homeowner liability coverage and provide proof of this to their HOA annually.

Arizona has solar access laws that are similar to those of California but with less stringency and specificity about what an HOA can and cannot do. For example, the “reasonableness” of HOA solar installation restrictions is decided on a case-by-case in the courts.

However, Custard explains that protective Arizona laws have made the HOA approval process very easy for Pur Solar & Electrical. 60-80% of Pur Solar’s installations involve HOAs, and they have never been rejected. He states that even when his company installed several systems near upscale private golf courses, they were able to install the panels facing the fairway for one and facing the putting green for another.

The actual provisions of solar access laws vary widely by state and comprehensive information about state and local rules is available at the Database of State Incentives for Renewables and Efficiency (DSIRE).

2. Be Your Customer’s Guide Through the HOA Approval Process

Functioning as your prospect’s expert on how to navigate their HOA’s solar stipulations and state laws from the beginning of the sales process can go a long way towards winning the deal. Find out the HOA’s rules about PV panel installation early, particularly any rules they may have regarding design and placement. These can impact aspects of the installation process, such as system price, even if your state has solar access laws.

Gauge your prospect’s level of familiarity with this topic and make sure they are aware of their HOA’s rules as well as their state’s laws. “Many homeowners are not aware of their rights,” says Custard.

He states that a homeowner may have just bought their house or might be new to the area; “they may have just gotten their HOA rule book, and they’re trying to figure out what direction they can put their car or what their yard has to look like. So they’re a little bit overwhelmed and gun shy.” Victory Solar’s Busby adds that while some people know how the approval process works or are even on their HOA board, others are completely unaware of how it works.

Custard explains that prospects are often concerned about what their HOA will say regarding installing solar. Therefore, his team makes sure to show the homeowner information about Arizona’s HOA solar laws via emails or printed articles. As a result “the prospect feels much more comfortable moving forward knowing that if they put down a deposit and get the ball rolling with solar, the HOA isn’t going to be throwing speed bumps in the path.”

3. Have a Streamlined HOA Application Process

It helps to show your prospects that you and your team are aware of how to achieve an expedited approval process. For example, there are ways you can reassure a prospect’s HOA and address their concerns. This can be done by demonstrating how PV panels can increase property values and providing examples of successful installations you have done for similar neighborhoods and home types.

Busby notes that Victory Solar has a streamlined process in place to ensure HOA solar approval given that they deal with HOAs on about 90% of their projects. He told us, “we probably submit too much paperwork but have a 100% approval rate. The paperwork has got to be very detailed and ironclad. An HOA can rarely oppose that.”

Busby also asserts that an important part of a smooth HOA solar approval process is having an operations team that gets paperwork together efficiently. He states, “you have to make the right hires within the operations group of your organization because they're just as important as your roof crew. If they're fast on the paperwork approval it flows down through every part of the operations side. As a result, we’re very quick. We install systems within 30 to 40 days while the industry average is 150 days.”

Be Prepared to be Creative and Flexible

HOA rules may require that you adjust your approach and think outside the box, even in a state with solar access laws. Victory Solar was able to secure approval for a client with a Spanish tile roof whose HOA had already rejected ground mount system proposals from three different contractors. They did this by suggesting a ballasted ground mount system with a black mesh fence screen to obscure the system from view. It included removing the grass and putting in white rock for a flat roof commercial system on the ground and ensuring the system was below the fence line.

Busby also describes one customer in an affluent neighborhood where the HOA wanted the solar system to be installed out of view. Noticing that the customer had an old unused concrete tennis court and, Victory suggested the customer repurpose the court as a solar pad for a ballasted ground mount solar system.

You may also consider adjusting the equipment you use. Custard talks about the benefits of using solid black panels: “HOAs very much prefer a solid black panel with a black screen instead of a white paper backing with a silver frame. When we use these kinds of panels they are more receptive to the installation and are less likely to come back with any questions, even in places that have really specific, stringent rules.”

4. Educate Solar Prospects and HOAs

In an effort to improve the HOA approval process and help ensure solar’s growth, you may look for opportunities to provide educational information to both prospects and HOAs. Laura Ann Arnold of the Indiana Distributed Energy Alliance, a state that currently has a host of solar related HOA challenges, says that “the solar industry as a whole needs to stay vigilant on HOA solar issues and work to educate the public as more people want to go solar.”

This may mean providing homeowners with information about HOA prohibitions and restrictions regarding solar in order to encourage them to ask questions before they buy a home. It may also mean seeking ways to educate HOA boards about removing outdated strictures or easing overly prohibitive rules. Arnold describes how some boards don’t understand the impact of certain rules like limiting solar to the back of the house or away from the street when it faces north. “There is a lack of understanding about the technology and the economics,” she declares.


Employing best practices when working with a customer and their Homeowner’s Association can help you offer the best customer service and increase the likelihood of closing the sale. A key part of this can be coming from a position of cooperation and consensus, which can lead to an expedited approval process. As Custard explains, “as long as you're civil with an HOA so that you don't end up on their radar as a ‘problem person,’ they're much more likely to help instead of hinder the process.”

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Topics: Solar Business Tips

Solar and the Environment: Surprises from the Value-Belief-Norm Theory

Posted by Sara Carbone on May 9, 2019 3:55:22 PM

The connection between Americans’ concern for the environment and solar adoption is clear. In a 2016 Pew Research Center survey, 55% of homeowners under age 50 in the United States said they had given serious thought to installing solar or had already installed solar panels. The second most common reason why? Environmental concerns.

For many solar contractors, this is not news. However, there are nuances to this connection. Whether pro-environment or not, consumers’ feelings about the environment are impacted by other beliefs and social factors that can influence their decision making process about adopting solar.

Being aware of these related factors and how they influence prospects can help you make your sales and marketing efforts more effective and avoid the pitfalls of assumptions about what prospects value.

The National Renewable Energy Laboratory (NREL) conducted a study to explore the social and psychological factors influencing homeowners considering adopting solar. This final article in our series about this study looks at some of its conclusions and how they can bolster your solar sales and marketing strategies.

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This Blog Series and the NREL Study

In this blog series, we take a closer look at insights from a 2016 NREL-funded study, Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories. The study’s researchers surveyed 904 homeowners from four U.S. states who did not adopt solar in order to understand how psychological and social factors affect consumer interest in residential solar. The factors were drawn from three behavioral theories that shed light on the decision making process of prospects, and from conversations with solar industry professionals.

Each article in our series examines one of the behavioral theories used in the study, exploring insights it offers for the process of solar customer acquisition. Where applicable we also add information from related research.

In this final article in the series, we examine what the “value-belief-norm theory”—which offers an explanation for individual environmental decision making—tells us about the decision making process for homeowners considering solar. In the previous two articles, we looked at insights from a theory that views solar as a new innovation and a theory that focused on purchasing behavior in a rational decision making process.

Value-Belief-Norm Theory

The value-belief-norm theory (VBN) argues that pro-environmental behavior is value driven. The most important of these values are social altruism, concern for other humans, and biospheric altruism, concern about other species and earth’s biosphere. Additional values shaping a person’s environmental related behavior are self-interest, openness to change, and feelings about tradition.

VBN asserts that these values have an impact on a person’s general beliefs about the human-environmental relationship and their sense of responsibility or moral obligation to take particular actions.

Source: Kimberly S. Wolske, Paul C. Stern, Thomas Dietz, “Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories,” Energy Research & Social Science, Volume 25, 2017.

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Impact of VBN Factors on Solar Adoption

The study’s researchers found that VBN variables accounted for 11% of the variation in interest in solar adoption after they accounted for other household characteristics (demographics, financial status, etc.).

The study’s conclusion was that these values have a variable impact on how prospects perceive solar. Both types of altruism made prospects more liable to be open to considering solar since they identified solar as a technology that would reduce the stress on the environment. However, this impact was mediated by their views on climate change, sense of obligation to address it, and their awareness of the effect of humans’ actions on the environment. These factors made them either more or less willing to consider solar.

Self-interest helped reduce interest in solar by lessening a prospect’s concern about the environment while their personal perception of the economic benefits of solar increased their interest. Additionally, while an openness to change helped promote curiosity about solar, traditionalism provoked skepticism.

How These Findings Can Help with Solar Customer Acquisition

Understanding how these value-belief-norm variables shape a homeowner’s decision making process can offer valuable insights to bolster your sales conversations and marketing messaging.

Address Concerns That Can Eclipse Prospects’ Pro-Environmental Feelings

The study revealed that there are VBN values that do predispose certain people to take pro-environmental action, something that can help you identify homeowners who may be more inclined to adopt solar. However, the impact of these values is shaped by behavior-specific beliefs and attitudes.

One such factor is a prospect’s personal norms, or expectations they may have about themselves and their behavior in relation to the environment. This could include be whether or not they feel guilt when they waste energy or feel obligated to take action about the future use of renewable energy. It could also be related to their feelings about the kind of social support they think they would receive for the choice they make about going solar.

Personal norms have such a significant impact on a prospect’s perception of solar’s benefits that it can even eclipse their pro-environmental values. It may be helpful to keep this in mind when shaping your marketing messaging and engaging in sales conversations. You might look to strike a balance between emphasizing the environmental benefits and discussing the other advantages of solar adoption, particularly when moving past the initial stages of the conversation with a prospect.

You may also help your sales teams avoid assumptions about a prospect’s feelings about renewable energy and have them be on the lookout for how a prospect factors in the opinions of others when it comes to making a decision about something like solar.

Avoid Assumptions About a Prospect’s Opinions About Change and the Environment

Past studies show evidence of the strong link between pro-environmental values and residential solar adoption. The 2016 Pew Research Center survey found that 87% of the surveyed consumers who installed solar or seriously considered it did so to help the environment. A 2011 survey of Dutch consumers found environmental concern to be the most important driver of a household's intention to generate its own power.

However, the NREL study concluded that the impact of pro-environmental sentiments can be moderated by factors like doubts about climate change or traditionalism. Given this, you may consider creating marketing materials that account for the varying beliefs of your prospects.

One strategy is to create several different buyer personas, or mock profiles of your company’s ideal customers, in order to speak to their specific opinions and needs. You can use digital marketing tools like emails, blog posts, videos and webinars to offer valuable content for each specific buyer persona you want to approach. Additionally, members of your sales team may seek to find out where a prospect stands on issues like climate change or changes to the status quo early on in a sales conversation.

Capitalize on Green Business Values

On the commercial side of your business, you may consider appealing to a company’s stance on sustainability in your marketing efforts. Discuss the benefits of solar in differentiating their company and impacting customers’ perceptions, particularly for companies that know many of their customers and shareholders have pro-environmental views. Business owners and CEOs set business strategy so you may try to help them understand how going solar can demonstrate their companies’ values in relation to the environment.

SunPower points out the relationship between sustainable business practices and brand reputation. They highlight four ways a sustainable business practice like going solar can bolster a company’s reputation: 1) “Follow the lead of environmentally-conscious Fortune 500 companies, 2) Position yourself to consumers and investors as a forward-thinking company, 3) Initiate a “green marketing” strategy, 4) Highlight your ability to align sustainability in business with profitability.”

You may also choose to appeal to prospects’ VBN related values and profitability on the commercial side of your business in this way.


 Accounting for the psychological and social variables that shape a prospect’s decision-making process in sales conversations and marketing materials can improve your solar contracting company’s ability to effectively engage consumers. Insights from the value-belief-norm theory can be particularly useful, given the close relationship between solar adoption and pro-environmental behavior.

Because there are a number of beliefs and social factors that impact a person’s feelings about the environment and how they view solar, it is helpful to consider VBN variables in relation to the behaviors addressed by the two other theories used in the NREL study: the diffusion of innovation and the theory of planned behavior, which we covered earlier in this series. This synthesis of three distinct theories about consumer behavior allows contractors to gain a more robust understanding of what ultimately drives homeowners to adopt solar.

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Topics: Solar Sales Tips from 3 Theories of Solar Adoption

Solar Sales Insights from the Theory of Planned Behavior

Posted by Sara Carbone on May 2, 2019 1:59:22 PM

Residential solar customer acquisition can be an expensive process. In 2017 GTM estimated that the average cost of getting new solar customers was 17% of the total residential system cost and set to grow to 20%. Therefore, making your sales and marketing process as effective and targeted as possible is important.

There are many factors that influence consumer behavior. The more you understand the various factors at play when a prospect considers adopting solar, the better equipped you are to speak to their specific concerns and present them with the most engaging information.

NREL funded a study to shed light on the social and psychological factors influencing homeowners when they consider solar PV. This second article in our three-part series on this study looks at some of its findings and how they can support your solar sales and marketing process.

See how Aurora Solar software can help you close more sales in a free  consultation.

The Theory of Planned Behavior offers some insights on consumers' decision process to buy solar.Understanding your prospect's decision making process for buying solar can help you improve your solar sales conversation. 

This Series and the NREL Study

In this Aurora blog series, we examine the insights of a 2016 NREL-funded study, Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories.

Researchers from several universities surveyed 904 homeowners from four U.S. states who had not already adopted solar to understand the impact of certain psychological and social factors on consumer interest in residential solar. These factors were selected based on three behavioral theories that offer insights about prospects’ decision making processes, as well as input from professionals in the solar industry.

Each article in our series looks at one of the behavioral theories included in the study, examining insights it offers for the solar customer acquisition process. Where applicable we also pull in other related research.

In this article, we consider what the “theory of planned behavior” has to reveal about the adoption of solar as a consumer good. In the first article, we looked at insights from a theory viewing solar as a new innovation and in the final article, we’ll highlight findings from a theory related to environmentalism.

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The Theory of Planned Behavior

The theory of planned behavior (TPB) asserts that the intention to perform a behavior comes from a rational decision making process involving the consideration of three things:

1) one’s attitudes toward the behavior,

2) subjective norms or one’s perceived social pressure to engage in the behavior, and

3) perceived behavioral control (perception of one’s ability to perform that behavior).

The Theory of Planned Behavior posits that attitudes, norms, and perceived control influence consumers’ intent to buy. Source: Kimberly S. Wolske, Paul C. Stern, Thomas Dietz, “Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories,” Energy Research & Social Science, Volume 25, 2017.

According to TPB, during the purchasing process, all three of these factors are impacted by the value a consumer expects to gain from the purchase and their beliefs about the purchase’s consequences. As applied to residential solar, this might be the fact that a solar system is a relatively expensive consumer good that requires some significant alterations to their home. Therefore, the solar decision making process can be partially explained by the weighing costs and benefits, such as the impact on one’s home and finances.

TPB Factors and What They Mean for Contractors

The study found a number of TPB variables related to consumer beliefs that influence attitudes toward residential solar. The researchers found that these factors accounted for 29% of the variation in interest in solar adoption, after accounting for other household constraints.

Understanding how these variables impact the prospect’s decision making process can offer valuable insights to improve your marketing materials and sales conversations with homeowners.

Inform Consumers About the Feasibility of Solar

Strategically counteracting negative perceptions about solar can help increase solar sales success. Prevalent positive ideas about the benefits of solar were found to include: belief in solar’s ability to protect against rising electricity costs, improvement in home value, and reductions in environmental pollution. The perception that had the strongest direct effect on those considering solar was the belief that they would personally benefit, followed by the idea that it could address environmental problems.

However, drawbacks that could potentially interfere with these perceptions about solar’s benefits were misconceptions about maintenance costs, unreliability, and the risks involved with altering one’s house. Researchers found that a particular barrier was worry about the price of the installation and maintenance, particularly given that solar’s price and operating costs are generally less well-known when compared to other large consumer purchases like cars or appliances.

There was also the common idea that, given fears about potential risks, it was better to wait until the quality and cost-effectiveness of solar improved, particularly since some prospects knew that panel costs had been going down in recent years. It may be important to clarify solar’s current—and potentially quite affordable—installation and maintenance costs since many prospects simply don’t have information about them.

Help customers understand financing options and incentives that can put solar in their budget.Help your customer understand some of the financing options and incentives that can put solar within their budget; many assume that solar is not feasible for them without knowing the actual cost. 

A 2015 Texas study using TPB to examine prospect decision making found a “low awareness of solar costs” among respondents. The researchers found that many said they would install solar if they could afford it and felt there would be only low financial returns, despite the existence of federal and local incentives and leasing options.

In light of this, researchers suggested that solar companies work to educate consumers about solar by making them more aware of incentives like rebates, declining prices, and lease options. They also advised that education about incentives is more effective if it includes information that clearly enables prospects to assess how incentives actually impact key criteria like affordability. Therefore, it may be effective to not only educate about the typical price of installation and maintenance but also present information about incentives in a way that is particularly attractive and relevant to a prospect’s particular set of criteria.

Aurora’s financial analysis tools can be particularly helpful here—because you can model the cost of the customer’s system given any applicable incentives. You can also how financial metrics and cash flows differ under different financing options.

Aurora's financial analysis tools can illustrate the finances of a solar purchase, including the impact of incentives.Aurora's financial analysis tools can help you illustrate the finances of a solar purchase, including the impact of relevant incentives. 

Create Positive Social Pressure: Connect Prospects with Neighbors Who Have Gone Solar

Find opportunities to encourage interactions between homeowners considering solar and others in their area who are happy solar customers. The study found that a belief in peer support (or lack of it) was the second most impactful variable when it came to solar adoption. This is based on the idea that a large number of prospects view group approval or disapproval as important. Researchers found that the feeling that friends and neighbors supported solar adoption often counteracted their concerns about the perceived risks.

Peer-to-peer marketing is one way you can encourage sharing about the benefits of solar. Inc.com states that “as a marketing decision...getting some early adaptors to tell their friends is more efficient and more effective than just about anything else you can do.”

If your company has successfully installed the first system in a particular neighborhood, you may look to capitalize on this through localized marketing efforts. Some of our team members who have previously sold solar for leading installation companies suggest that one way to do this is to use Aurora to create custom solar designs for neighboring houses, and distribute them on the day of the install. Securing positive online reviews, requesting referrals, or creating high quality, engaging content that is easily shareable in person or online.

Interactions with others who have installed solar can help prospects feel they have peer support for a solar purchase.Finding ways to encourage interactions with others nearby who have installed solar can help prospects feel that they have peer support for a solar purchase.

Help Prospects Feel They Can Go Solar By Addressing Their Concerns

The results of the study showed that even peer influence can be overridden by a homeowner’s belief that they are not able to adopt solar. Given this, it is helpful to explicitly identify a prospect’s concerns and address them in the sales conversation.

Typical reasons customers believe solar is not feasible for them were found to be: concerns about local climate, exposure to sunlight on their property, and expectations about having to move soon.

Concerns About Shade

The study stated that “homeowners may quickly dismiss [residential PV] if they believe their homes or locations unsuitable” because of things like inadequate sunlight due to the local climate or the shadiness of their property.

Interestingly, however, researchers found that this particular concern made a prospect more likely to want to talk to a contractor, reflecting a genuine interest in confirming whether their property was truly unsuitable for solar.

This is something you may wish to use to shape your initial messaging or early stages of sales conversations. Aurora users can also take advantage of the irradiance map feature, which helps you show a prospect how much shade and solar access a home has, to address these concerns.

An Aurora Solar irradiance map is a helpful tool for solar sales to show homeowners how much sun reaches their property.Aurora's irradiance map tool is one way to educate prospective solar customers about how much solar energy reaches their roof and if they are a good candidate for solar.

Concerns About Moving

Another common concern brought up by prospects was that “I may not be in my home long enough to get the benefits of investing in solar.” You may consider addressing this by offering information about solar’s impact on their home’s value during your sales conversations.

There are a number of studies that demonstrate that U.S. houses with solar sell faster and for more money. A 2015 Lawrence Berkeley National Lab study examined sales data for 23,000 homes in eight states from 2002 to 2013, 4,000 of which had a solar system. The study found that buyers were willing to pay a premium of $15,000 for a home with an average-sized solar PV system, compared to a similar home without one.


You can leverage these social and psychological factors that shape prospects’ perceptions about solar and its suitability to effectively target your solar sales and marketing efforts. These findings based on the theory of planned behavior highlight how to engage homeowners and address their specific concerns. In the next and final article of this series, we’ll look at findings from a behavioral theory related to environmentalism and examine how they can assist in the solar customer acquisition process.

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About This Series: Solar Sales Tips from 3 Theories of Solar Adoption

In 2016 the National Renewable Energy Laboratory (NREL) conducted a study that examined the decision making process of residential solar prospects through the lens of three behavioral theories. They sought to provide solar industry professionals with insights about the social and psychological factors influencing homeowners when they considered whether or not to adopt PV solar, in order to help increase the solar adoption rate.

In this three-part series, we look at each of these theories and discuss the key variables explored in the study and in related research. The series seeks to provide contractors information that can enhance their sales and marketing efforts.

Part 1. Increase Solar Sales Success with the Diffusion of Innovations Theory

Part 2. Solar Sales Insights from the Theory of Planned Behavior

Part 3. Coming soon!

Topics: Solar Sales, Solar Sales Tips from 3 Theories of Solar Adoption

Increase Solar Sales Success with the Diffusion of Innovations Theory

Posted by Sara Carbone on Apr 24, 2019 12:12:34 PM

Getting new customers is a persistent challenge in the residential solar industry. In fact, while other components of the cost of solar have fallen over time, in 2017 GTM reported that the cost to acquire a residential solar customer had actually gone up!

But what if you could have a better sense of what factors influence whether a potential residential solar customer will be interested in taking the first step of talking with a solar contractor?

Could you more precisely target prospects who are more likely to install solar? Could you better tailor your solar sales and marketing messages to address the considerations that play the biggest role in their decision-making process?

With that in mind, NREL funded a study with exactly that focus. This article, the first in a series of three, examines some of the findings of that study and what they mean for your solar sales and marketing strategy.

See how Aurora Solar software can help you close more sales in a free  consultation.

About This Series and the NREL Study

The three articles in this Aurora Blog series explore the insights of a 2016 NREL-funded study entitled Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories.

Through a large survey of homeowners who had not already installed solar, researchers from several universities examined the impact of different psychological and social factors on individuals’ interest in residential solar. The factors were drawn from three behavioral theories that offer potential explanations for why people decide to pursue solar.

The study used survey data from 904 homeowners who had not already installed solar in four U.S. states: Arizona, California, New Jersey, and New York. The content of the surveys was built from each of the three theories and conversations with leaders in the residential solar industry.

Our series examines the findings of this NREL study, and other related research. Each article explores one of the behavioral theories considered in the study, highlighting what insights it offers for solar customer acquisition.

In this article, we share takeaways from “diffusion of innovations” theory that explains solar adoption through the lens of how people perceive and adopt new innovations. In future articles, we’ll highlight findings from the other theories considered.

The Diffusion of Innovations Theory

The diffusion of innovations theory (DOI) describes the process by which an innovation diffuses through society as a result of media communication and person-to-person interaction.

Source: Kimberly S. Wolske, Paul C. Stern, Thomas Dietz, “Explaining interest in adopting residential solar photovoltaic systems in the United States: Toward an integration of behavioral theories,” Energy Research & Social Science, Volume 25, 2017.

According to the DOI theory, a consumer’s process for adopting an innovation occurs in five stages: 1) their knowledge or awareness about it, 2) persuasion or the formation of their attitude about it, 3) their decision about whether to adopt the innovation, and if so, 4) implementation and 5) confirmation (deciding whether or not to continue using it.

There are a number of factors that impact the speed at which the individual moves through these five stages. One is the “innovativeness” of the potential adopter—the earliest adopters tend to be innovators who actively seek information about technology to assess its benefits.

Five additional factors about the way an individual perceives an innovation like solar influence their likelihood of adopting it and how quickly they decide to adopt it:

  1. Relative advantage: whether solar is perceived to improve a person’s status financially, environmentally, or socially
  2. Perceived compatibility with the individual’s existing values, needs, and practices
  3. Perceived complexity, such as whether the individual feels it will require a lot of effort to learn about solar
  4. Observability: whether consumers are able to observe that technology in use
  5. Trialability: the ability to test an innovation before committing
    (The researchers note that residential solar’s lack of trialability is one potential barrier to adoption. This is one reason you may want to capitalize on the other factors above in your messaging.)

The study survey included questions related to each of these variables drawn from DOI theory to assess how they impacted a prospect’s decision-making process. These factors offer some valuable insights into how you may want to frame your marketing messages and sales conversations.

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How DOI Factors Affect Solar Adoption

The researchers found that DOI variables accounted for a full 31% of the variation in individuals’ responses to survey questions.

In particular, the study found that a prospect’s perception of the relative advantages of going solar was the most significant indicator of their interest in talking with a solar contractor. Having observed solar (such as seeing solar on a neighbor’s house) helped increase their sense of relative advantage and reduce their perceived sense of solar’s riskiness.

Exposure to solar increases individuals' interest in talking to a solar contractor, a helpful insight for solar sales
Observing solar, including conversations with peers with solar, was one important factor in prospects' interest in talking to a solar contractor. Read on to find out about some of the other key factors and what they mean for your solar sales and marketing strategy.

Additionally, prospects’ interest in seeking out new technologies (a measure of their “innovativeness”) had a strong positive impact on their interest in contacting a solar installer.

Implications for Improving Solar Customer Acquisition

There are a number of practical implications of the study’s findings based on diffusion of innovations theory. Contractors and their sales and marketing teams can keep these insights in mind when shaping their messaging and considering how to approach sales conversations.

Emphasize Solar’s Relative Advantage and Compatibility with Customers’ Values and Lifestyle

Consider framing your marketing and sales messages in ways that emphasize the advantages of solar compared to the customer’s status quo. For instance, you may want to highlight the savings and greater control it offers over utility bills or increased home value. Although the study focused on prospects’ existing perceptions of solar, this was one of the most important factors in study participants’ interest in solar.

And, since compatibility with the customer’s lifestyle and whether the process is perceived as simple or complex are also important factors, you want to ensure that you make the process as simple as possible,

Early Adopters of Other Innovative Technologies May Be Good Solar Prospects

Because “innovativeness,” or a person’s eagerness to adopt new technologies, is a strong indicator of their interest in talking to a solar contractor, one customer acquisition strategy may be to target your marketing and sales outreach toward those who have adopted other innovative technologies.

Many contractors currently target consumers who are early adopters of other environmental technologies like hybrid and electric vehicles. The NREL researchers suggest also approaching consumers of other innovations such as “smart home” technologies, like smart thermostats. They point to the fact that homeowners who use home automation may be attracted to an online solar platform that allows them to monitor their energy usage and generation.

The Importance of Trust and Overcoming Prospects’ Sense of Risk

Finding ways to connect your customer with trusted sources of information about residential solar can help with sales success. The researchers state that “potential adopters need assurance from trusted sources of the personal benefits of RPV.” These can be neighbors with solar or neutral, third-party sources like government agencies or nonprofit organizations.

This kind of information impacts a prospect’s curiosity about solar as well as their willingness to talk to a contractor. The researchers also suggest offering contractual guarantees of system performance to increase consumer confidence. Aurora users could also highlight the NREL validation of the accuracy of their solar software.

Observability and the Power of Peer Influence

Because observability plays such a big role in customers’ decision-making, it may be helpful to think about creating opportunities for interactions between homeowners that help share the benefits of solar. Other studies have documented this, such as a 2012 California study that found the more common solar was in a zip code, the greater the likelihood of another household adopting it.

A 2015 study of Texas solar adopters found that the decision-making process is significantly shortened when homeowners see PV panels in their neighborhood or talk to neighbors who have solar. It found that the presence of PV system owners in a neighborhood had a significant impact—both passively, when consumers witnessed PV systems in their neighborhood, and actively, via peer-to-peer communication.

Contact with neighbors who had installed solar before an installation was the single most effective strategy for speeding decision times as it increased confidence, a sense of trust, and an understanding about solar’s convenience and relevance.

The Texas study suggested that contractors design incentive structures and communication platforms that facilitate peer-to-peer interactions, such as online social platforms or referral programs, because they have the potential to decrease individual decision-making time by over six months.

You might also want to target your marketing and sales outreach to neighborhoods where solar is already present, since neighbors of current solar customers will likely feel more comfortable with solar.


Understanding the psychological and social factors that impact the decision making process of homeowners considering solar can help contracting companies frame their marketing and sales communications. Findings from this study based on diffusion of innovations theory, offer insights into effective ways of engaging prospects and increasing solar sales success. In subsequent articles, we’ll discuss findings from two other behavioral theories that offer implications for solar customer acquisition.

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About This Series: Solar Sales Tips from 3 Theories of Solar Adoption

In 2016 the National Renewable Energy Laboratory (NREL) conducted a study that examined the decision making process of residential solar prospects through the lens of three behavioral theories. They sought to provide solar industry professionals with insights about the social and psychological factors influencing homeowners when they considered whether or not to adopt PV solar, in order to help increase the solar adoption rate.

In this three-part series, we look at each of these theories and discuss the key variables explored in the study and in related research. The series seeks to provide contractors information that can enhance their sales and marketing efforts.

Part 1. Increase Solar Sales Success with the Diffusion of Innovations Theory

Part 2. Solar Sales Insights from the Theory of Planned Behavior

Part 3. Coming soon! 

Topics: Solar Sales, Solar Marketing, Solar Sales Tips from 3 Theories of Solar Adoption

Lessons From Down Under: Ways to Lower PV Solar Soft Costs

Posted by Sara Carbone on Apr 17, 2019 9:00:00 AM

In recent years, costs for solar in the United States have come down, largely due to decreasing solar PV module costs. However, soft costs—including customer acquisition and the cost of services like installation, interconnection and permitting—have remained high, now making up approximately 64% of the total cost of a new solar system. If those costs were reduced it would help make solar more widely accessible in the U.S.

Australia’s thriving solar market offers a number of lessons about how contractors can reduce soft costs. Solar contractors there have focused on creating more efficient processes, resulting in increased profit due to more installations in less time.

This article explores the findings of a 2014 report on Australia’s solar market from the Rocky Mountain Institute (RMI) and the Georgia Tech Research Institute (GTRI) entitled Lessons From Australia - Reducing Solar PV Costs Through Installation Labor Efficiency.

See how your solar contracting business can work smarter with Aurora.

Background on Australia’s Solar Industry

Australia has a booming solar industry. Currently, 20% of Australian households have rooftop solar. Clean Energy Regulator General Manager Michelle Crosbie states, “Australia has the largest uptake of household solar installations and capacity per capita in the world.”

The Australian solar industry has experienced significant growth in the past few years. Electricity generated by new rooftop solar was 86% higher than the average annual growth during the previous three years, and utility-scale PV output is projected to reach more than 1 TWh in 2019. And the number of small business solar installations grew from over 9,663 in 2017 to 16,596 in 2018.

There are several reasons why the country’s rooftop solar market is doing so well. There is considerable policy support from federal and state governments for PV systems less than 10kW, and residential electricity prices are very high compared to those of other countries. Both the sunny climate and the fact that a large percentage of Australia’s houses are stand-alone structures with large roof spaces make it a region conducive to solar. Finally, prices are low for solar, with the typical system cost averaging about $7,000 compared to $16,000 in the U.S.

While many of these differences are beyond the control of solar contractors, when it comes to this final difference, the cost of solar installations, Australia may offer some lessons for the U.S. solar market.

Australia's solar industry offers lessons for the U.S. Twenty percent of Australian households have solar installations. The Australian solar market offers some lessons for the U.S. industry, according to a study by the Rocky Mountain Institute (RMI) and Georgia Tech Research Institute.

Lessons for American Contractors

The RMI/GTRI report has a number of insights for American solar contractors about ways to lower costs around installation labor. The authors acknowledge that there are certain fundamental differences in the structural and policy context of Australia’s solar industry. Some of these include the country’s high electricity costs, simplified permitting process, streamlined architecture, and greater efficiencies regarding building and electric codes.

However, the authors of the report highlight a number of instructive best practices that have led to a shorter, more cost-effective installation processes in Australia. While the report found that the American median total install time is 9.4 labor hours per kW, it states that “based on benchmarked Australian installers, our analysis highlights an opportunity to reduce total installation time by nearly 2.3 labor hours per kW, thereby approaching the Australian median total install time of 6.1 labor hours per kW.”

The report suggests that the primary way to do this is for U.S. PV contractors to make efforts to shift their installation practices to make one-day installs more common.

See how Aurora helps solar companies grow revenue, cut costs, and impress their  customers!

An Expedited Installation Process

The report found that Australian solar contractors spend approximately the same proportion of time on each category of installation activities as U.S. companies but are able to perform discrete activities much more quickly. This is due to their use of highly specialized roles and simplified processes and components.

Pre-Installation Process Optimization

There are several aspects of the pre-installation process that have been streamlined by Australian solar companies. They have shorter prep time for activities that take place before arriving on site.

At the warehouse, contractors prepare and load the trucks more quickly, partly because their trucks are stocked with universal equipment and loaded with system-specific components by job. The study authors suggest that American contractors could benefit from increased warehouse organization and task identification.

On-site pre-installation is simplified, with system installation often beginning within approximately 20 minutes of arrival. Australian contractors demonstrate high levels of task specialization and efficiency when loading and unloading racking and mounting materials. Modules are largely prepped and fully unpacked before arriving on site. Additionally, less time is spent setting up safety gear, though this is partly due to differing roof types and local safety requirements in Australia.

Lessons from Australia, like streamlining equipment pickup from warehouses, can help reduce solar costs in the USThe study authors suggest that efforts to streamline the pre-installation process, including equipment pickup, can help reduce U.S. solar costs. 

Faster Racking Installation

While Australian system components and finished products are similar to those of the U.S. market, differences exist regarding the sequence of activities and implementation of specific components.

In Australia, bases and rails are ready to be installed with minimal preparation. Contractors have more efficient processes around array measurement and squaring, moisture protection installation for racking and mounting system base components, and preparation for clay tiles.

Given the predominance of clay tile roofs in key U.S. markets, it is helpful to note Australian solar contractors’ expedited install process for them. They assemble bases prior to roof transfer or use a very simplified base design that requires very little assembling.

They also opt for bases that self-seal or reduce the need for additional flashing and choose racking systems that require fewer base attachments and penetrations. Integrated or rail-less racking systems decrease installation times by removing an entire hardware component.

In an effort to expedite the install process, the RMI/GTRI team is working on a new racking design that includes features like minimal base preparation, integrated string and grounding management, and no conventional rails.

Solar racking is streamlined in Australia, particularly for tile roofsRMI and GTRI found that racking approaches that require less preparation and installation time have helped make one-day installs common in Australia.

Simplified Electrical Procedures

There are certain aspects of the electrical and monitoring systems that help expedite the installation process. Grounding and combiner box activities tend to have simplified component and overall system design. Australian contractors use grounding systems with a fewer number of contact points with the racking systems and choose combiner boxes that allow for a faster installation process.

Off-roof electrical processes are also expedited, largely due to the use of fewer system output monitoring meters. American companies typically install two meters on a single PV system while Australian solar companies often don’t use any. The RMI/GTRI report states that “time spent on off-roof electrical activities to connect the solar array to the home electrical panel is consistently the highest (or tied for highest) cost area of any of the bucketed activities.” Given this, the team is developing PV-ready electrical circuits that would accept a single connection from a PV system.

Conclusions

By implementing processes that move them closer to a one-day installation, American contractors could see a $0.10/W reduction in total install cost according to the study authors. The RMI/GTRI authors state “the 9.4 labor hour per kW in the U.S. can be decreased to 7.1 if our key changes are undertaken to improve process efficiency and work towards a one-day installation goal.”

High soft costs have been a stubborn problem in the U.S. solar market, hindering solar cost reductions that could make the technology accessible to more Americans. Applying some of the tactics that have contributed to greater installation efficiency in Australia could help American solar businesses put a significant dent in that vexing issue.

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Topics: solar installation, solar industry

Don’t Give Up Too Soon on Solar Leads or Referrals

Posted by Sara Carbone on Apr 2, 2019 6:57:24 PM

For a capital-intensive technology like PV solar, trustworthy information is imperative. That means prospects often “turn to trusted information networks made up of family, friends, and neighbors…[to] benefit from and tap into the knowledge stock of existing users.” This means that referrals from past customers can be a particularly effective source of solar leads for contractors.

In a two-year study about customer acquisition in the solar industry, the National Renewable Energy Laboratory (NREL) found that it is common that solar contractors give up too soon on referrals from past customers, as well as some of their leads—whereas more persistence could generate additional sales.

In this article, the seventh and final article in our 7 NREL-Backed Ways to Close More Solar Sales series, we look at strategies for long-term follow up with potential solar leads and referral sources.

Outreach to old solar leads or past solar customers can generate solar sales in the long term.Periodic outreach to past customers can help maintain relationships that can generate future referrals. You may also want to occasionally follow up with solar leads that haven't closed, in case their circumstances have changed. Maintaining contact over the long term can help generate additional solar sales. 

See how Aurora Solar software can help you close more sales in a free  consultation.

About This Series and the Research by NREL

This Aurora Blog series examines seven common mistakes contractors make when selling solar identified by NREL, based on its 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS). In this study, NREL researchers aimed to ascertain why certain prospects adopt solar while others don’t, to provide solar contractors with insights to help lower the cost of customer acquisition.

The study involved surveys of homeowners from four states who installed solar, considered solar, or did not consider solar to understand their decision-making process. Researchers also gathered input from approximately thirty contracting companies on their solar sales processes.

Every article in this 7 NREL-Backed Ways to Close More Solar Sales series includes insights from an interview with one of the lead NREL researchers, plus information from the field and related research. In the first six articles of the series, we addressed rapid follow-up with solar leads, the need to avoid assumptions that prospects share your opinions about solar, not confusing customers with too many options, effectively addressing the competition, how to ask for referrals from customers, and keeping in touch with past customers.

Why It Pays to Persist

NREL stresses the importance of pursuing solar leads and referrals beyond when most solar contractors give up. Closing a sale with a prospect or securing a viable referral from a customer often requires persistence and strategy.

Not Giving Up On Leads Too Soon

NREL point out that most installers make the mistake of giving up on a lead within three months. Ben Sigrin, one of the NREL researchers, says that “sometimes installers have a touch point with a lead, and then if they get turned down they discard that lead or don't enter a reminder to follow up.”

He talks about the need to stay in touch with prospects over the long term. This is because a prospect’s situation can change. “What is right for them one year may not be right for them the next year. Maybe the household just had a new child so their electricity has gone up, or maybe they have a little more free cash flow than they did last year.” By periodically reaching out over the long term you are more likely to be top of mind when a prospect is ready to go solar.

Lifestyle changes can impact customers' interest in solar—one reason to keep in touch with old solar leads. People's needs can change over time; life events like a new child or a raise can make a solar purchase more relevant. Keeping in touch with old leads will help ensure your company is top-of-mind when they may be more ready to purchase. 

Sigrin also talks about staying organized and being selective with prospect outreach. This means managing your data so that you are tracking prospects’ changes and your touch points with them. As a result, you are better able to make decisions about how and when to reach out. As Sigrin says, “If you can't measure it, you can't manage it.”

Getting Referrals Later On Down The Line

Sigrin says that solar contractors tend to make a similar mistake when seeking referrals from customers. He notes that they often stop trying to get referrals after about six months. “There are a lot of opportunities to win a customer or referral after the initial three to six months… the earlier you give up, the more money you might be leaving on the table,” says Sigrin.

He suggests periodically asking for referrals over a long period of time: “we have heard of solar companies getting referrals from customers who had gone solar several years earlier.”

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Strategic Outreach Over the Long Term

Additional sources confirm that persistent, strategic outreach for both leads and referrals can be beneficial. Matt Johnson, Residential Sales Manager at Namasté Solar, a leading employee-owned solar contracting cooperative based in Colorado, shared that his team has a systematic approach to staying in contact with prospects and existing customers over the long term.

Johnson explains, "we definitely have ongoing email drip campaigns.[1] We do email marketing to our existing customer base as well as new customers on a periodic basis. Typically, we'll do a quarterly email reminding folks about our referral program.” He adds that his team is careful to make sure they don’t inundate people by sending them emails every month.

It can be helpful to think of follow-up with solar leads and customers as having three elements: education that provides valuable information, repetition of the key messages you want to convey, and variety of channels such as direct mail, phone calls, emails, social media, and webinars.

Using a combination of phone calls and emails can be particularly effective. A follow-up email after a phone call can include relevant company materials, like a case study showing how solar can solve the challenge of high electricity bills or a blog article about what differentiates your company.

Finding a Balance When Following Up on Solar Leads

There are certain methods that can work particularly well for lead follow-up. Sales teams often focus on the hottest leads, which may mean the “warm” ones get neglected. Dan Kennedy, business coach and author of the book No B.S. Ruthless Management of People & Profits, states that this can be problematic.

“Instead of doing the tedious, follow-up grunt work, sales reps usually wait for a new batch of leads to come in. In the meantime, the warm leads from the last batch get cold, and they're soon forgotten.” It helps to strike a balance when deciding which kinds of leads to pursue over the long haul.

Of course, it also helps to know when to walk away so that you don’t waste resources on a dead end. Sometimes a solar system is clearly not a good fit for a prospect’s budget, or they are just not sold on the ROI after repeated conversations and review of educational materials.

Surprisingly, communicating that your outreach will cease can sometimes be what solicits a positive response. It may be that a prospect was busy but was interested and the communications you sent left a positive impression. Marketing company HubSpot writes that this can mean that the prospect was “relying on you, like every other salesperson, to keep trying to get in front of them.” HubSpot also points out that a final email is often the one that gets the highest response rate.

Periodic emails or newsletters can be an easy way to stay in touch with past customers as well as solar leads. Periodic emails or newsletters can be an easy way to stay in touch with past customers as well as solar leads. 

Timing and Creativity When Pursuing Referrals

Matt Johnson at Namasté Solar notes that their company has multiple points in their relationship with a customer where they reference the referral program. The referral program is mentioned during the proposal development process, at the time of the installation, and after the installation via follow-up email campaigns from their marketing department.

Johnson highlights post-installation as a key time for follow-up requests for referrals, as customers may not be ready to refer until then. He states, "most people tend to be much more willing to make referrals once they see results and are satisfied."

In an article based on the same 2014-2016 SEEDS study discussed in this series, NREL’s Ben Sigrin and several other researchers wrote that long-time customers tend to be the most valuable referral sources. They write that “it’s worth checking in with existing customers from time to time, especially the long-time ones who can attest to the long-term solar experience.”

They also suggest being creative about how you ask customers to refer, given that people are busy. Customers may be open to placing a small sign on their lawn, posting a testimonial on social media, or hosting a solar party. While these aren’t direct referrals, they can be a great way for you to reach their network. In fact, one study estimates that increased peer-to-peer interaction, such as talking with a neighbor who installed solar, can potentially “decrease individual decision times by over six months.”

House with solar panels. Interaction with neighbors or other peers with solar can help solar prospects decide.Get creative about how you ask solar customers to refer others; a sign on their lawn or a recommendation on solar media can be as smaller ask with big results. Studies show peer-to-peer interactions about solar can decrease decision making time for people considering a solar purchase. 

Additional Solutions for Outreach

There are a variety of additional strategies to consider when staying in touch with solar leads and referral sources. Johnson talks about how Namasté Solar distributes a quarterly email reminding people about their referral program. You can send out periodic newsletters to customers with tips on deciphering bill and understanding savings as well as invitations to customer events and other opportunities. Test the frequency of your outreach to find what works best for your company and customers.

Keep your prospect and customer database organized and use relevant tools, like a customer relationship management (CRM) software, to ensure systematic follow-up. Consider offering a robust referral program with incentives and encourage sharing via social media.

You might also consider designating someone to keep your solar leads warm when sales staff is not actively reaching out to them. Kennedy writes that “every business has a lead generation department (marketing) and a lead closing department (sales), but they’re lacking a lead warming department.”

No matter how you maintain contact with prospects and past customers, being in communication with them over the long term can be a valuable way to gain new customers.

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[1] If you're unfamiliar with the term, a drip campaign refers to a series of messages sent on a predetermined schedule—typically a drip campaign is sent by email though it can also include other methods of outreach. They can be a great way to share information about your company and keep in touch with prospects over a period of time.

 


About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers in to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

Why and How to Keep In Touch with Past Solar Customers

Posted by Sara Carbone on Mar 26, 2019 4:25:26 PM

Given the nature of a PV solar system, a solar contractor’s past solar customers are one of their best marketing resources. This is because, for many people, solar is an unfamiliar technology and they have a fear of making the wrong decision about it. As a result, people “often turn to their friends and neighbors to find out if their experience was positive and whether the return in energy savings is worth all of the effort.”

It is not surprising then that word-of-mouth can be a significant source of solar leads. According to Nicole Litvak, Solar Analyst at Wood Mackenzie Power & Renewables (formerly GTM Research), in 2015 50% of all residential solar sales were derived from referrals. This makes it all the more important for solar companies to stay in touch with their customers after the PV system is installed, as this can ensure more referrals.

Since leads are such a valuable commodity for solar contractors, it is vital to avoid the mistake of losing contact with past customers, particularly ones who have had their system for a long time. In this article, Part 6 in our 7 NREL-Backed Ways to Close More Solar Sales series, we examine reasons and strategies for staying in touch with your customers.

See how your solar contracting business can work smarter with Aurora.

About This Series and Related NREL Research

In this Aurora Blog series, we take a closer look at seven common mistakes contractors make when selling solar identified by the National Renewable Energy Laboratory (NREL). These observations are based on NREL’s Solar Energy Evolution and Diffusion Study (SEEDS) conducted from 2014-2016.

In the study, NREL sought to understand why certain prospects adopt solar while others don’t, to provide solar contractors with insights to help lower the cost of customer acquisition. The researchers surveyed homeowners from four states who installed solar, considered solar, or did not consider solar to understand their decision-making process. They also gathered input from approximately thirty solar contracting companies on their sales processes.

Each article in this 7 NREL-Backed Ways to Close More Solar Sales series includes observations from an interview with one of the lead NREL researchers, plus insights from the field and related research. In the first five articles of the series, we examined the need for quick follow-up with solar leads, avoiding assumptions that prospects share your opinions about solar, not confusing customers with too many options, addressing the competition effectively, and ways to ask for referrals from customers.

The Importance of Staying in Touch

Ben Sigrin, one of the NREL researchers involved in the study emphasizes the usefulness of being in contact with past solar customers, especially early ones. He notes that “staying in touch with all previous customers—even if only occasionally—can provide you with a wealth of testimonials and the trust they confer on your business.”

NREL also points out that strong referrals and testimonials are particularly important for solar businesses. This is because a solar system is not something a customer can test out before buying. Sigrin states that the solar customer “faces an all-or-nothing proposition: either you bolt a solar array onto his house or he can't experience it all.”

As a result, more weight is given to referrals, especially ones from customers who have had a system for many years. These longtime solar system owners can credibly address concerns a prospective customer may have about reliability, maintenance, and ROI.

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Stay Front of Mind To Ensure Referrals

Additional research supports the importance of referrals given the nature of solar as a product. Terence A. Shimp’s Integrated Marketing Communications discusses the extent to which “trialability,” or the ability to test drive a product, helps increase adoption of innovative technology.

Shimp asserts that products that can be tested prior to purchase are adopted more rapidly. He writes that “the trial experience serves to reduce the consumer’s risk of being dissatisfied with a product after having permanently committed to it through an outright purchase.” Unfortunately, this trial experience is not possible with solar.

However, Shimp goes on to state that another key element to easier adoption of innovative technology is observability, “the degree to which...other people can observe the positive effects of new-product usage.” When a product, and its benefits, are clearly visible to others, the consumer becomes a kind of billboard for the product.

While a person observing a solar system on their neighbor’s roof does not directly see the positive impacts on their neighbor’s electric bill, the system does function as a highly visible reminder of the benefits of solar. Ultimately, you want to be front of mind when that neighbor asks your customer about their PV system. One of the best ways to do this is to stay in touch with your customers.

Staying in touch with past customers over the long term gives you access to their success stories, a very strong form of solar marketing. Residential and commercial case studies humanize your brand and are a powerful way to engage prospects since “happy customers are often the best, and most authentic, spokespeople for your company.”

A well-presented residential success story helps prospects identify with homeowners who have already adopted solar, “allowing them to better visualize what their lives will look like once they make these changes.” This makes it easier for the customer to move further along in their buying process. Commercial case studies show firsthand the financial benefits and help demystify the solar education process.

The easiest way to gain access to these stories, whether presented as short blog posts, longer articles or brief testimonial blurbs, is by maintaining consistent contact with your customers over time.

Strategies To Maintain Long-Term Customer Relationships

There are a number of ways to stay top-of-mind with your customers. One effective method of staying in touch is by sharing valuable content, such as solar and renewable energy-related news, articles, and events. You can share these insights through social media, email, or direct mail like a quarterly newsletter. However you reach out, aim to strike a balance between enough outreach to be remembered without becoming annoying.

It can also be effective to personalize your communication with details about your customer that are outside the business relationship such as birthdays, promotions, family news, or milestones. Your sales teams may consider occasionally reaching out for personal contact via a phone call, something that may help ensure future leads.

A customer relationship management (CRM) tool, such as Salesforce or Zoho, can help your team organize their efforts and information about past clients to keep outreach consistent, particularly over the long term. You can also encourage customer sharing via social media and a referral incentive program. Offering additional services like operations and maintenance, monitoring, and upsell opportunities can extend the relationship and increase customer lifetime value.

No matter how you connect with past customers, staying in touch with them beyond the installation can be a significant boon for your solar business.

How do you stay in touch with past customers? Let us know in the comments below!  

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About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: NREL-Backed Ways to Close More Solar Sales, referrals

Stop Missing Out on Solar Customer Referrals

Posted by Sara Carbone on Mar 15, 2019 10:26:50 AM

Solar is a highly competitive industry and a chronic issue for contractors is the high cost of customer acquisition. While the average cost of customer acquisition is $2,000-4,000, solar companies typically pay about $500 per referral, making referrals an affordable source of high quality, exclusive solar leads. Additionally, according to Nielsen, 83% of surveyed consumers say recommendations from people they know are their most trusted source of information.

But it’s not always straightforward how to get referrals. You might ask customers to keep referrals in mind but your request is easily forgotten. The customer may not think about their PV system on a daily basis or know how to identify good candidates for solar in their network.

However, there are ways to increase the likelihood of referrals, many of which involve the way you follow up. In this article, Part 5 in our 7 NREL-Backed Ways to Close More Solar Sales series, we address effective strategies for asking for referrals from customers.

The NREL Study and This Series

This Aurora Blog series looks at seven common mistakes contractors make when selling solar according to the National Renewable Energy Laboratory (NREL). NREL’s observations are based on its 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS).

The NREL study was conducted to understand why some prospective customers adopt solar while others don’t—in order to offer insights to help solar contractors lower their customer acquisition costs. NREL researchers surveyed homeowners from four states who installed solar, considered solar, or did not consider solar, and also gathered insights on sales processes from interviews with approximately thirty solar contracting companies.

In each article in this series, we offer insights from an interview with one of the lead NREL researchers, as well as observations from the field and related research. In the first four parts of the 7 NREL-Backed Ways to Close More Solar Sales series, we looked at following up quickly with solar leads, not assuming prospects share your opinions about solar, being careful to avoid confusing customers with too many options and how to address the competition effectively.

customer and salesman shaking handsLearning how to ask for referrals effectively can help you generate a pipeline of cost-effective new leads. 

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Strategies for Success When Asking for Referrals

The NREL researchers state that many sales reps don’t actually ask for referrals, or ask ineffectively, such as by using timid phrasing or only asking in passing. It helps to be strategic about how you approach the process of asking for referrals to maximize success.

Find the Right Timing

In our interview with NREL researcher Ben Sigrin, he highlighted that understanding the optimum time to ask for referrals is important. He notes that NREL’s study asked questions like “do referrals tend to be generated immediately after the contract is signed, after the first month of interconnection, or years after interconnection? And how does the quality of the referral depend on that?”

Sigrin asserts that contractors should be sure to ask about referrals after the system is activated and beyond. He describes the customer’s perspective in this way: “If I'm referring someone before my system is connected, then I don't have any experience about whether the system is performing according to my expectations. But if I have had it for several years, then I am probably a more reliable source of information for my friends and family, because I can speak to how it's actually performed over the last few years.” Therefore, says Sigrin, consistent, long-term follow up is key, whether in the form of a periodic check-in, a “solar party” or other event with your customers, or physical reminders like a referral card or gift.

Pamela Cargill, former Principal of solar management consulting firm Chaolysti, concurs, noting that the best time may be after the installation is complete and the customer has received the first utility bill showing solar savings so “you’re likely to catch them on a high note.”

It also helps to think of the customer relationship as one that exists over the long term, beyond the installation. Matt Johnson, Residential Sales Manager at Namasté Solar, a leading employee-owned solar contracting cooperative based in Colorado, points out that having multiple touch points leading up to and after installation helps capitalize on the fact that “most people tend to be much more willing to make referrals once they see results and are satisfied.”

Engage the Customers That Want to Refer

Namasté Solar's Matt Johnson also notes that, to increase the likelihood of referrals, it is important to identify customers who are most likely to refer and focus your efforts on them. He reports that Namasté Solar’s market research has revealed that although some people “are never going to refer anybody just because they don't make referrals for anything,” an estimated 20% of customers will refer more than one person. He calls these people “solar advocates.” 

happy solar customers that might be willing to referSome solar customers—who Matt Johnson, Residential Sales Manager at Namasté Solar refers to as "solar advocates"—are likely to refer a disproportionate number of customers. It may make sense to focus additional efforts on making sure these strong proponents are empowered to refer. 

Johnson describes how Namasté Solar takes note of these customers’ willingness to refer. “We try to mark those individuals in our system when our sales staff or project managers feel like they're a solar advocate. We then direct more of our marketing efforts towards those people, reaching out to them more proactively to try and help them generate even more referrals.” He adds that providing a cash incentive for referral is effective as well.

NREL’s 2014-2016 SEEDS research also looked at the willingness of solar customers to refer others. Writing in GTM, several of the study's authors including Sigrin, report that in their survey of 1,662 solar adopters 80% reported making referrals (the median amount being three). While they acknowledge that the customers in their survey may have been “early adopters”—who could be more likely to refer—it’s clear that effectively asking for referrals could result in a lot of new business opportunities for your company.

Other research has also found that many businesses fail to take advantage of consumers’ willingness to refer. A Texas Tech study found that 83% of satisfied customers are willing to refer others, but only 29% actually do, partly because they were never asked to do so. Don’t assume that good service alone will result in a referral without asking or let discomfort get in way of the ask. The inbound marketing experts at HubSpot suggest a substantial percentage of your customers are willing to have a conversation about referrals, “but not unless you bring it up. Not all of them will give you referrals on the spot, but some will do so over time.”

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Six Solutions to Maximize Solar Referrals

In addition to asking for referrals at the right time and trying to identify the customers that are likely to be your biggest advocates, there are a number of different strategies to consider that may make it easier to get referrals. Here are a few tactics you may want to consider as you work to increase the number of clients you get through referrals.

1. Experiment with Other Phrasing

Consider other language aside from the word ‘referral.’ This could mean asking questions like, “Is there anyone else I might be able to help?”, “Do you know anyone else who would want to learn about solar?”, or “Who do you know that’s concerned about their electric bill?”

2. Provide a Template

If your client is interested in referring but not sure where to start, they may appreciate pointers on what to say or how to approach the topic. You could suggest that they share their experience on their social media platforms with photos or feedback about the install process or their bill savings (or provide them with nice photos or sample language if you want).

3. Make Your Content Easy to Share

Making your content, like blog posts and case studies, sharable is a great way to tap into your customer’s networks and maybe spark some conversations about their experience. Add a 'Share This With a Friend' link to the educational and marketing information that you provide to customers.

4. Create Incentivized Customer Loyalty or Referral Programs

As Johnson notes, referral programs with incentives can be helpful. To support this, you could consider creating your own referral app to offer customers or using an existing one like GetTheReferral. Some companies include solar system monitoring and review capabilities as well with these apps.

5. Deliver Top-Notch Service

Another strategy is to simply deliver an excellent customer experience because when this happens, customers are much more likely to provide a referral. Meet or exceed a customer’s expectations during all stages of the installation, including before and after.

Pam Cargill states that “making customers feel comfortable involves spending a lot of time educating and communicating with them…[ensure] the expectations you set during the sales process are true, realistic and carried through during project delivery.” Ultimately, she asserts, it is a satisfying customer experience and not the sales process that will be “more likely to lead to them referring.”

6. Keep in Touch

Finally, as discussed above, make sure to stay in touch over time. Carefully manage the timing of your follow up throughout the sales process and after the install. Cargill suggests finding where you can automate certain aspects of the communication process during sales to help you track how often the follow up occurs. Additionally, look to set reminders in the calendar or CRM to ensure that your team will periodically check in with customers. 


As NREL’s Sigrin puts it, “installers should look to keep high levels of customer satisfaction and find ways to solicit referrals from customers” including finding“ways to reconnect and remind their customers without unnecessarily annoying them." This, he says, is good business practice.

Given how referrals can provide a very cost-effective source of solar leads in an industry with high customer acquisition costs, having powerful strategies for making your customers a good source of referrals can be vital to your company’s success.

Have you found other approaches to getting more referrals? Let us know in the comments below!

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About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

How to Effectively Address the Competition in Your Solar Sales

Posted by Sara Carbone on Mar 8, 2019 12:48:50 PM

These days the American solar industry is highly competitive. GTM points to “intense competition” as one cause of rising customer acquisition costs since installers "spend more money to win a bid." Addressing the competition is a necessary part of most solar sales conversations.

However, talking about the sales competition in your conversations with prospects takes careful thought. This is particularly true given the sensitivity of the subject and the fact that prospective customers may not yet be sold on solar itself, let alone who will install it. GTM reports, “solar companies are far more likely to lose considerers to uncertainty and doubt than to other competitors.”

Avoiding mistakes in your conversations with prospects, particularly with regard to how you discuss your sales competition, is important given the challenges of customer acquisition. In this article, Part 4 in our 7 NREL-Backed Ways to Close More Solar Sales series, we look at how to effectively address the competition in your solar sales conversations.

See how Aurora Solar software can help you close more sales in a free  consultation.

The NREL Study and This Series

In this Aurora Blog series, we examine seven common mistakes contractors make when selling solar. These mistakes were identified by the National Renewable Energy Laboratory (NREL) based on its 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS) study.

NREL’s 2014-2016 SEEDS study was conducted to ascertain why particular prospects adopt solar while others don’t, to provide solar contractors with insights to lower customer acquisition costs. It surveyed homeowners from four states who installed solar, considered solar, or did not consider solar, to understand factors that affected their decision making. It also included input from approximately thirty solar contracting companies.

In each article in this series, we share observations from an interview with one of the lead NREL researchers, as well as insights from the field and related research. In the first three parts of the 7 NREL-Backed Ways to Close More Solar Sales series, we focused on the importance of quick follow-up with solar leads, not assuming prospects share your opinions about solar, and not confusing customers with too many options.

Choosing the Right Time to Bring Up the Sales Competition

NREL researcher Ben Sigrin discusses the perils of criticizing the competition before the customer is completely sold on the idea of going solar. The researchers acknowledge the need to “sell against the competition” but state that “doing so when solar prospects are not fully engaged with solar will hurt not just your competitor, but you, too.”

He suggests that understanding the stages of a prospective customer’s decision-making process can help contractors address competition effectively. He describes the idea that awareness and interest come before the evaluation process, when customers weigh options like which contractors to go with.

Ushering a customer beyond the awareness stage means avoiding scare tactics. As Sigrin acknowledges, “no doubt, it's tempting to try to get to the customers first by spiking the other guys' offer with some good, old-fashioned F.U.D.—fear, uncertainty, and doubt.” But he emphasizes that using such tactics in your sales strategy is more likely to scare prospects away from going solar altogether.

Understanding The Customer’s Decision Making Process

Research has shown the value of knowing the customer decision making stages. The fundamental idea is that a consumer moves through various stages on their journey to making a purchase in a sales conversation. A funnel is a helpful metaphor for understanding how this process occurs. That’s because as consumers move through the stages, the number of viable customers decreases. The select ones that reach the bottom of the funnel have progressed to the point where they are ready to make a purchase.

The stages as they relate to solar are: awareness (about solar and what it can provide), interest (enthusiasm about the idea of going solar and/or feeling it is feasible for them), decision (assessing various vendors), and action (committing to buying a system). A final stage would be advocacy (acting as an ambassador for solar adoption).

In your solar sales conversations, try to get a sense of where your prospect might be. This can help you and the members of your sales team address their needs and avoid any missteps. This is particularly useful given that prospects are likely coming to the conversation from different points.

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A Sales Strategy That Focuses on the Relationship

Studies reveal that it might be worthwhile to consider not bringing up competitors at all or avoiding being too negative. You may want to think about keeping the criticism brief and carefully consider how you want your team to approach the sales competition when they do discuss it.

Your team may want to focus more on establishing a positive relationship than disparaging competitors. “Your prospect doesn’t want to know why someone is bad; they want to know why you’re the person they should work with. By focusing your sales strategy on how you can help prospects achieve their goals, you’ll earn their trust and show them why nobody can compete with you,” according to LinkedIn.

Linda Richardson, founder of the sales training firm Richardson and author of numerous books on sales, describes two important aspects of selling against the competition. One is knowing how your offering differs from that of the competition so that a customer might find your product or service more attractive. The other is guiding the conversation with a prospect so that the superiority of your offering becomes clear.

Richardson recommends that you avoid bad-mouthing a competitor because it can give the impression of pettiness, making your competitor look good in comparison. Instead, consider asking questions about your customer’s needs that get the prospect thinking about differences in how you and competitors would meet those needs. For instance, are they looking for a personal touch from a local company that you can deliver better than some larger competitors?

Writing in Forbes, author and sales expert Ian Altman agrees that focusing on what the customer needs is more effective than bashing the sales competition. He emphasizes that you want customers “to select you because they feel you best understand their situation and they see you as most likely to deliver the best value”—not because they felt there were no other good options.

Solutions for Success

As a salesperson, learning how to understand where the customer is in the decision-making process is a good first step in finding the right time to address competition in the conversation. This might mean asking certain questions, or identifying signs that they have moved beyond the early stages and are ready for more detailed information about making the purchase. These signs could include asking questions about pricing and terms or what solar is capable of in some scenario related to their specific situation.

Whatever you choose to do, be cautious about disparaging the competition and focus on positively highlighting the unique value your company adds. This can go a long way towards avoiding missed sales opportunities.

Enjoyed this article? Subscribe to the Aurora Blog for our latest updates!


About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

Engage Solar Leads with the Right Use of Choices

Posted by Sara Carbone on Feb 27, 2019 10:29:03 AM

Have you ever done an Amazon search and ended up so overwhelmed by the number of choices that you just gave up or decided to shelve the search until later? Ever landed on a homepage of a website with so many options you didn’t know where to click? That same phenomenon can apply in solar.

Contrary to what you might expect, too many choices can actually be harmful when selling solar. While offering a large number of solar choices might sound like service to a prospective customer, in reality too many options can make decision making difficult and lead to fewer solar sales.

Solar leads are a valuable and often expensive commodity, so it is important to be aware of mistakes—like overwhelming prospects with too many choices—that can interfere with closing the sale. In this article, Part 3 of our 7 NREL-Backed Ways to Close More Solar Sales series, we examine why giving a customer too many options in a solar sales conversation can be problematic.

See how Aurora Solar software can help you close more sales in a free  consultation.

About This Series and Related NREL Research

In this series, we look at seven common mistakes contractors make when selling solar identified by the National Renewable Energy Laboratory (NREL) in a study conducted from 2014 to 2016. This Solar Energy Evolution and Diffusion Study (SEEDS) study was conducted to learn more about why certain customers adopt solar while others don’t, in order to help solar contractors lower customer acquisition costs.

The study surveyed homeowners in four states and worked with approximately thirty solar contracting companies. It also included the application of mathematical modeling and testing.

It was conducted by NREL, Lawrence Berkeley National Lab, and behavioral scientists and psychologists at a variety of universities, with funding from the Solar Energy Technologies Office at the US Department of Energy.

In our series on the seven common solar sales mistakes identified from this research, we explore each one in more depth based a conversation with one of the lead NREL researchers, related research, and real-world perspectives from solar contractors. In the first two parts, we discussed the importance of quick solar lead follow-up and avoiding assumptions that solar leads share your opinion about solar.

The Right Number of Options

In almost every solar sales conversation, understanding the perspective of your solar lead is essential. According to NREL’s findings, a key component of that is finding the approach that offers them enough options without inundating them.

Ben Sigrin, one of the lead researchers on the study, asserts that "people tend to assume that more actions are better, but—and I'm sure many people can relate to this—sometimes having more options is confusing and can be overwhelming.” He points out that for a wavering prospect, feeling the pressure to make a whole lot of decisions can push them to default to inaction or to stick with what they know—getting their electricity from the utility.

Sigrin does emphasize that prospects often want solar choices, just not in excessive amounts. He says, “sometimes I think it is in the salesperson's best interest to define a few options that show different ends of the spectrum and not overwhelm the customer with choice."

It’s wise to tailor the options you offer to the particular solar lead, since customers who are less knowledgeable about solar tend to want more direction, while more sophisticated customers may appreciate a wider range of options.

Offering fewer options in a solar sales conversation can let customers focus on the choices that matter
Offering a smaller number of options, such as solar design configurations, based on your solar expertise, can help the solar customer avoid being overwhelmed by choice. 

Tyson Peschke, Co-Founder and Chief Revenue Officer of Blue Raven Solar, agrees with the idea that it is important to avoid overwhelming prospects with too many choices. Blue Raven Solar is a leading solar installation company operating in ten states. He says his sales team keeps it simple to engage customers and establish trust.

“You don't want to explain to customers how 10 different panels work so they think they have to choose the one that best fits them,” Peschke explains. “You want to let them know that ‘panels are basically the same, except for, say, these two things. And we've chosen these two panels because we feel like they represent the best value’.”

He says that this kind of approach sets prospects up to trust you—the contractor—because you are helping to reduce the number of decisions they need to make so they can focus on the ones that really matter.

See how Aurora helps solar companies grow revenue, cut costs, and impress their  customers!

The Hazard of Choice Overload

Other studies support the idea that too many options in sales conversations can impede the process. One phenomenon identified by psychologists is choice overload. This is the idea that when a prospect does not have a very specific sense of what they want or a clear way to categorize choices, they tend to feel discomfort over the number of products to choose from.

Choice overload can derail a sales conversation. Barry Schwartz, author of The Paradox of Choice, asserts that choice overload can lead to anxiety, dissatisfaction, bad decisions, and decision paralysis. These negative emotions can distract from the decision itself, impairing decision-making abilities and causing someone to postpone or avoid making a decision. Schwartz writes, “Even if you've made a good decision, when your choice isn't perfect, knowing there were alternatives out there makes it easy to imagine you could have made a better choice.”

A study about limited choice vs. extensive choice demonstrated this when customers in a store were asked to sample jams. The study found that only 3% of those who sampled 24 flavors made a purchase, while 30% of those who sampled 6 flavors made a purchase. The authors of the study state that too many options can lead people to choose not to choose even when it goes against their self interest.

Too many choices can undermine solar sales by giving the customer choice overload.Too many choices can overwhelm a customer and make them less likely to make a choice at all.  

Using Choice Effectively in Your Solar Sales Conversations

There are a number of ways you can work with sales staff to present solar choices without overwhelming prospects. Emphasizing simplicity and clarity is one; as Peschke puts it, look at how to offer “fewer options, more clear choices. Three is better than ten options.” Work with them to make choosing easier for prospects by keeping decisions real, immediate and concrete, and focused around a specific, positive outcome.

Additionally, help your team remember to tailor their approach to the customer's level of understanding. As Ty Simpson, Regional Sales Manager of Bland Solar, says, “solar is not sales, it’s education. You’re teaching something unorthodox... Getting people to that a-ha moment.” However you help prospects find that a-ha moment, understanding how to effectively present options in the conversations is a key factor in facilitating their solar sales decision.

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  About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Posted by Sara Carbone on Feb 13, 2019 3:05:58 PM

The cost of customer acquisition in the solar industry is high and continues to rise. In 2018 the Solar Energy Industries Association (SEIA) reported that customer acquisition costs had been steadily increasing over the previous four quarters, and two years earlier, GTM put the average cost of customer acquisition at $0.52 per watt.

This, in addition to increasing competition and market saturation, means that solar contracting companies want to use their most effective strategies when trying to win prospective customers (leads). In an effort to help contractors avoid pitfalls that could jeopardize solar sales, the National Renewable Energy Laboratory (NREL) conducted a study to comprehend why certain customers adopt solar while others don’t.

This series examines seven common solar sales mistakes NREL identified through its study, based on a conversation with one of the lead NREL researchers, additional related research, and real-world insights from solar contractors. In Part 1 of our 7 NREL-Backed Ways to Close More Solar Sales series, we explored the importance of quick solar lead follow-up. In this second article, we explore problems associated with assuming prospective customers share your opinion about solar.

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About NREL’s Study

Funded by the Solar Energy Technologies Office at the US Department of Energy, NREL’s 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS) study was conducted by NREL researchers, members of the Lawrence Berkeley National Lab, and a number of academics in behavioral science and psychology. The team surveyed homeowners in four states, collaborated with approximately thirty solar contracting companies, and applied mathematical modeling and testing to their results.

The study sought to better understand the decision making process of potential residential solar customers in an effort to help solar industry professionals identify ways to reduce customer acquisition costs.

The Importance of Avoiding Assumptions

NREL’s study found that understanding the customer's perspective is essential in a solar sales conversation. Doing this helps you refrain from making assumptions about the solar lead’s level of interest and makes you better able to address their needs. 

Customers sometimes have concerns or misconceptions about solar. These may be feelings related to system aesthetics, installation and maintenance expense, or ROI. Ben Sigrin, one of the lead researchers on the study, explains that there is a lot of variation in how homeowners perceive solar, and that many have particular misconceptions about solar’s economics and backup capabilities. He says that consumers may have “a lack of understanding of how the economics of solar work: how much it costs, how much will be saved on their bill, what the payback period will be.”

Additionally, Sigrin states that “some consumers assume that solar will always provide backup power during a grid outage, and that's not always true. They should be made aware of whether it is or isn't.” Ultimately, it is important to ensure that your enthusiasm about solar doesn't lead you to overlook these kinds of potential misconceptions or assume the customer shares your excitement about solar’s benefits.

Assuming a lead shares your opinions about solar or failing to address misconceptions can result in lost solar sales.Assuming your prospective customer shares your opinions about solar, or failing to understand misconceptions they may have, can lead to missed solar sales opportunities.

Patrick Perry, Director of Sales at Momentum Solar—one of the fastest-growing solar companies in the nation, with an impressive 4,617% revenue growth over the last 3 years—agreed that it is important to be mindful of a customer’s misconceptions. Perry points out that consumers sometimes have misconceptions about solar partly because “internet research can provide some useful information, but also could provide inaccurate information as well."

Perry explains that for his team, “providing clarity and perspective is our goal. Our approach is an educational one.” As a starting point, his team seeks to carefully “determine what the customer knows about solar, what their needs are, and where they got their information—whether it be from a friend or family or their own internet research.” By understanding this, Perry explains, they are then able to provide clarity to help the customer comprehend solar’s benefits.

Listening to Understand

Other experts in solar and sales emphasize the need to appreciate the customer’s perspective in sales conversations. Jim Jenal is the founder and CEO of Pasadena, California-based solar installation company and regularly writes about commercial solar and customer service. He talks about the importance of understanding where your solar lead is coming from: “knowing the concerns, wishes, and assumptions of the [prospect] allows you to anticipate their needs so you can offer them the best experience and clearest understanding of how solar can improve their bottom line.”

Ivan Misner, Founder of Business Network International, explains that a lot of selling has to do with finding what the customer wants. Misner states, “buyers are multifaceted, and when they shop, they weigh the many pros and cons of a potential purchase... Learning and adapting to the issues and whims of the buyer while moving the sale forward to a conclusion is a complex and intricate task – and it’s the responsibility of the sales professional to ensure it happens.”

An integral part of adapting your approach so as to guide the solar lead through this process is listening carefully to understand what factors the customer might be weighing regarding solar.

Active listening during the solar sales conversation can help you understand and address concerns of your solar leadsActively listening to prospective customers’ concerns and ideas about solar can help you more effectively address what’s important to them—and have a greater likelihood of closing the sale.

Listening is a key aspect of being able to effectively adapt in your solar sales conversation. Active listening is the art of asking thoughtful questions for true understanding and “making sure that you concentrate, respond, and remember what was heard.” Not only do you learn a customer's perspective, you build trust by validating what they feel.


It is possible to help your sales team avoid the pitfalls of making assumptions in solar sales conversations. Training in how to anticipate and identify customer concerns or mistaken ideas about solar can help them address issues as they come up. Understanding the basic principles of active listening to build trust may also be beneficial, as might an approach that emphasizes clarity and education, like that of Momentum Solar. Whatever path you choose, avoiding jumping to conclusions in your solar sales conversations can go a long way towards success.

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About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers in to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

Boost Your Solar Sales Success With Faster Lead Follow Up

Posted by Sara Carbone on Feb 7, 2019 4:38:19 PM

Customer acquisition is one of the biggest challenges for solar companies and one of their most significant costs. Wood Mackenzie Power & Renewables reported residential customer acquisition costs of $3,668 per customer in 2016 and projected 2017 costs of $3,898 per customer.

This means that when you connect with a prospective customer it’s critical to avoid mistakes that could cost you the sale. Findings from a National Renewable Energy Laboratory (NREL) study of factors that influence homeowners to install solar offer insights into some of the most common mistakes contractors make during a sale.

“For residential-scale solar, the costs of customer acquisition remain high in this industry. There are many different figures on the exact cost and these change over time, but certainly on the order of thousands of dollars per successful client is spent developing the pipeline of leads,” says Ben Sigrin, one of the NREL researchers who led the study.

“Our goal in this project was to understand better the decision making of potential customers that are considering adopting solar for their home, in order to be able to help solar developers and other industry stakeholders identify pathways to reducing customer acquisition costs.”

This series, 7 NREL-Backed Ways to Close More Solar Sales, we will explore in more depth each of several solar sales mistakes identified NREL, based on a discussion with one of the lead NREL researchers, reviews of related studies, and real-world perspectives from solar contractors. Today’s article, Part 1, explores why not following up with leads fast enough can be problematic.  

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About the Study

This research, NREL’s 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS) study, was funded by the Solar Energy Technologies Office at the US Department of Energy. The work was conducted by a team comprised of individuals from NREL, the Lawrence Berkeley National Lab, and several renowned academics in the behavioral science and psychology fields.

The team conducted surveys of homeowners in California, Arizona, New Jersey, and New York. The survey group included homeowners who had adopted solar, homeowners who had considered solar but decided not to purchase, and some who had never considered solar.

NREL collaborated with approximately thirty solar contracting companies who offered firsthand perspectives on their solar sales processes and helped the researchers connect with prospective solar customers surveyed in the study. Other aspects of the study included mathematical modeling and testing to understand spatial behavioral drivers of adoption and examine the impact of policy and neighborhood changes.

The Need For Quick Turnaround with Leads

One of the key insights offered by the study’s findings is the importance of following up with a lead as quickly as possible. Interest in solar is often triggered by an event like an exorbitant electric bill, advertisement, or referral from a friend, and the further removed the person is from the event when you reach out, the less likely they are to go solar. Sigrin states that “through the data, we did find that installers that are able to have a quick turnaround tended to have more successful outcomes.”

Tyson Peschke is Co-Founder and Chief Revenue Officer of Blue Raven Solar, one of the fastest growing solar companies in the nation and a top-10 solar company in the U.S. Though not familiar with NREL’s data on this topic, Peschke intuitively agreed that contacting a prospect right away while solar is front of mind can help improve the likelihood of success.

He observes that “If I know it's the right moment to talk to that person because they just put their information in, they're much more likely, in theory, to answer my call than if I wait 10 minutes. If it's on a customer's mind, it's the right moment; if not, it's very easy for them to decide they’ll talk to you some other time. So for me, it absolutely rings true that if you can get them within 10 seconds, they haven't moved on. If you wait too long, it is very likely they’ve moved on to a different train of thought and then you’ll have to re-engage their interest.”

Interest in solar is often triggered by an event, like a bill. Quick follow up can at that time can increase solar sales.Interest in solar is often triggered by an event, like a utility high bill. Responding quickly can capitalize on that interest and help you close more solar sales.

The Problem with Waiting Too Long

Other research supports the idea that slow follow up with leads can be a pain point for solar sales. A 2015 study of solar selling methods demonstrated that solar companies are not always quick to respond to an inquiry. The researchers filled in online inquiry forms for solar contractors during business hours and tracked responses for 22 days. Only 46% of their inquiries received at least one phone call and one email from sellers, and almost 40% of inquiries did not receive a response for several weeks or at all.

Other studies have found that the quality of a lead does indeed degrade over time, as seen in a 2007 Lead Response Management study. The study found that the odds of making successful contact with a lead were 100 times greater when contact is attempted within 5 minutes of the lead submitting their information, compared to 30 minutes. It also found that the odds of a lead entering the sales process were 21 times greater for that same time frame.

Another study that examined 3.5 million leads found that a call attempted within a minute of receiving a lead increased conversion rates by 391%; comparatively, the study found only a 17% improvement in conversion rates when leads were contacted within 5-24 hours.

Solar Sales CallPrioritizing quick follow up with prospective solar customers is a key element of and effective solar sales process. 

Finding Solutions

There are a number of possible solutions to the issue of quick lead follow-up, and it’s wise to put some thought into what creative options would help your company reach out to prospective customers as efficiently as possible.

Solutions could include a chatbot that gives website visitors quick answers to their questions and the satisfaction of an instant response or an automated email response for web inquiries. An effective CRM system that allows you to precisely track interactions with prospective customers is also essential—both to assess how well your company is performing in regard to response times and to make sure that no leads fall through the cracks.

However you approach your lead follow-up strategy, finding ways to be as responsive as possible to prospective customers can help you maximize your chances of a fruitful outcome.

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About This Series: 7 NREL-Backed Ways to Close More Solar Sales

Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers in to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.

In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.

Part 1. Boost Your Solar Sales Success With Faster Lead Follow Up

Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives

Part 3. Engage Solar Leads with the Right Use of Choice

Part 4. How to Effectively Address the Competition in Your Solar Sales

Part 5. Stop Missing Out on Solar Customer Referrals

Part 6. Why and How to Keep In Touch with Past Solar Customers

Part 7. Don’t Give Up Too Soon on Solar Leads or Referrals

Topics: Solar Sales, NREL-Backed Ways to Close More Solar Sales

Be a Commercial Solar Superstar: Service Insights from Jim Jenal

Posted by Sara Carbone on Jan 22, 2019 5:00:25 PM

Excellent customer service is extremely important during all stages of solar PV sales and installation. This is particularly true for commercial solar installations, given the often considerable size of the project and the impact it can have on the client’s operations and bottom line.

Having literally “written the book” on commercial solar, Jim Jenal, founder and CEO of Pasadena, California-based solar installation company Run on Sun, has a wealth of information on what contributes to a positive customer experience in commercial solar projects. Jenal has blogged about the solar industry since 2009 and has been interviewed by the Los Angeles Times and the Wall Street Journal. His book Commercial Solar: Step-by-Step is an in-depth look at what commercial solar customers should think about when considering solar.

For solar contractors considering how to excel in customer service for their commercial solar customers, this article compiles some of Jenal’s insights on this topic from Commercial Solar: Step-by-Step (page numbers noted in parentheses), as well as blog posts and interviews.

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Know Your Buyer

One of the first considerations for delivering excellent customer service is to fully understand where your prospective commercial client is coming from, according to Jenal. Knowing the concerns, wishes, and assumptions of the facilities manager or building owner allows you to anticipate their needs so you can offer them the best experience and clearest understanding of how solar can improve their bottom line.

Facilities managers and other commercial prospects may be under considerable pressure to lower operational costs and be very interested in finding creative alternatives to save money, as Jenal explains in his book. He recommends finding out what cost-saving approaches they may have tried in the past, such as lighting and HVAC system upgrades or smart devices to reduce peak power demand. Perhaps they have considered solar in the past but found that lack of financing made it a challenge.

It’s also important to understand the extent of your prospect’s knowledge about solar so you can speak to their interests and level of technical awareness. Your client may be highly trained in engineering or technology and want comprehensive, technical details about all aspects of solar. Others may educate themselves extensively about solar before soliciting bids. Conversely, Jenal describes clients who are social workers who “don’t need that level of technical detail but are really big on finding that sense of trust.” (11:23) He explains that his company strives to speak to what each group is looking for because “that is where the connection gets made.” (9:44)

When selling commercial solar, it helps to understand your customerUnderstanding your commercial solar customer can help you better address their needs. That includes understanding their past efforts to save on energy, as well as their knowledge of solar. 

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A Consultative Sales Process

The proposal process is a key element, according to Jenal, because it sets the standard for the quality of the relationship. Make it clear that you are doing your utmost to offer a bid that accurately reflects the cost of the project to avoid “inconvenience, delays and costly change orders once the project is underway.” (29)

Demonstrating honesty and expertise during this stage is vital to building trust. Jenal describes how the prospect will have a lot of questions, perhaps they don’t know a lot about solar or because they have done the research and want to assess your level of proficiency. Offer fact-based answers and be ready to answer questions that are outside of what is typically asked. Be candid when you don’t know something and be willing to educate yourself about it.

Additionally, while it should go without saying, Jenal also emphasizes that "Honest communication...starts with the fact that not every potential client is a good fit for solar and you need to be able to tell them that.” (1:02)

Jenal recommends managing customer expectations by making sure they understand system performance projections and the ins and outs of their bill. For example, make sure your client understands the impact net metering and how being a net seller or net purchaser of energy will affect their bills, and avoid offering overly simplistic savings explanations.

Finally, Jenal notes that going the extra mile can make a big difference. He describes an example when Run on Sun secured a bid partly because of the level of support they offered around a time-sensitive rebate application process. Jenal writes how the Director of Facilities appreciated that they offered “to take care of all the paperwork, filing within the deadline period and eliminating the extra bureaucratic steps the school would otherwise have to take.” (121)

A great commercial solar sales process educates the customer and answers all questions they may have.A great commercial solar sales process educates the customer and answers all questions they may have, manages customer expectations, and goes the extra mile on things like rebate applications. 

The Right Proposal

In addition to answering all of your commercial customer’s questions, a comprehensive and accurate proposal is essential. Your proposal should have all the information the client will need, including an overview of their bills and detailed estimates of how much a solar system will save them—with any relevant information about net metering, rebates, and incentives, and a comprehensive shading analysis. The proposal process should also include a thorough review of the electrical system to identify any interconnection issues.

A key factor in your ability to deliver accurate solar savings estimates is having the right savings assessment tools. Jenal emphasizes the importance of an approach that accounts for complexities like time of use rates. He suggests being conservative with your estimates so that the customer will be pleasantly surprised.

Jenal also highlights that providing complete and accurate financing information is particularly important for a decision as significant as whether or not to install a commercial solar system. Materials on financing options should be thorough, including information tailored to your prospect’s region. Jenal also points out that, the solar contractor can play a valuable role in helping customers to understand their financing options.

PA strong commercial solar proposal will include all the information customers need, like this one from Aurora SolarA strong commercial solar proposal will include all the information customers need, particularly accurate shading analysis, performance estimates, and solar savings estimates. 

Clarity and Excellence During—and After—the Installation

Once you’ve secured the sale, walk your customer through the solar installation and permitting process so they know what to expect. Be up front with the client about the length of time it may take for a utility to process the paperwork and issue a Permission to Operate letter, discussing the best and worst case scenarios. (63)

When it comes to system permitting and applications for financial incentives, Jenal recommends offering a seamless process by handling the process for your client candidly and with attention to detail. In his book, he offers examples such as bringing the required utility paperwork to the first meeting after the contract is signed, and carefully filling out rebate applications to avoid having to reapply. With the inspector, Jenal recommends striving for a collaborative and communicative approach, as well as detailed plans from which you rarely deviate. (64)

Of course, it is paramount that the installation itself surpasses expectations—sticking to the projected timeline and budget and having strong processes to avoid change orders as much as possible. Upon completion of the installation, walk the client through the system so they can see for themselves how much power it is producing.

Excellent commercial solar service continues the relationship post-install, possibly with monitoring and O&M.After the solar installation is complete, walk your customer through the system so you can be sure they understand it and know it's working correctly.

Finally, your relationship with the client shouldn’t end when the installation is complete. Jenal recommends monitoring system performance to detect maintenance or connection issues when they arise, and staying in communication with the client—especially if you’d like to secure referrals. Providing operations and maintenance services is also something you can consider.


Excellent customer service comes from establishing and keeping a client’s trust with honesty, expertise, and clear communication. This kind of approach can help you secure those all-important commercial clients and advance your company’s growth and reputation. It will also ensure that your customers are satisfied and come away knowing they have “delivered to [their] commercial operation a long-term benefit that will not only enrich the company’s bottom line, but will improve the world at the same time.” (129)

 

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Topics: Commercial Solar

What Solar Contractors Should Know About O&M

Posted by Sara Carbone on Jan 2, 2019 3:20:52 PM

The solar industry is constantly evolving and, as it has matured, operations and maintenance (O&M) as a service offering has evolved along with it. O&M has grown from a simple service offered by engineering, procurement, and construction (EPC) companies for systems they built, to a dedicated market segment comprised of independent service providers and robust branches of solar contracting companies. The maturation of the solar industry has also led to increased O&M specialization to address more complex demands of both the market and the grid.

A solar contracting company evaluating where O&M fits in relation to its services has a number of factors to consider, particularly regarding whether to offer O&M in-house or outsource it. Regardless of whether solar contractors engage directly in O&M, it has emerged as an important solar market segment to understand–particularly given the long lifespan of a solar system and the ongoing need ensure it captures as much power as possible.

In this article, we explore what solar O&M involves, considerations for solar contractors regarding offering O&M services or working with other companies specializing in this space, and some criteria for evaluating potential solar O&M partners.

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What Is Solar O&M?

Broadly speaking, O&M is a set of activities that allow a solar PV power plant to optimally produce energy. It includes three basic functions: rapid problem identification and resolution, minimization of downtime due to faults, and comprehensive reporting and transparency.

There are several different approaches to solar O&M. One is preventative maintenance or the routine inspection and servicing of equipment to avoid breakdowns and needless production losses. Another is corrective maintenance which focuses on repairs after a breakdown occurs to minimize unplanned downtime. Still another is condition-based maintenance, the use of real-time data to predict breakdowns and prioritize activities and resources, something offered by an increasing number of third party integrators and turnkey providers.

Each of these approaches employs some or all of a number of services like performance monitoring and diagnostics, energy forecasting, warranty administration, and preventative maintenance including module cleaning and vegetation control. It can also involve integration with a third party for system commissioning, Supervisory Control and Data Acquisition (SCADA) upgrades, parts replacement, and re-roofing support.

Maintenance includes both scheduled and unscheduled elements. While scheduled services are outlined by equipment manufacturers’ product manuals, unscheduled maintenance involves fixing problems once they occur. Consistent scheduled maintenance lowers the frequency and cost of unscheduled work, ideally achieving a system that operates properly at “99.9% availability” due to constant monitoring and clear recovery systems.

Risk management, another aspect of O&M services offered by some industry players, is the ability to identify what can go wrong and predict probability and consequences. It enables PV owners or asset managers to effectively plan for unscheduled maintenance and mitigate issues. Risk management is emerging as a distinct field, with a number of companies offering software and services to "insure" solar production.

Considerations for Including Solar O&M In-House

There are a number of factors to keep in mind when assessing the feasibility of adding solar O&M services to your contracting business or expanding your current offerings.

Some benefits for solar companies that offer O&M services in-house include the ability to be your customer’s key point of contract from initial design and construction to maintenance over the long-term. This may mean lower costs for asset owners and greater value from each customer (increased customer lifetime value) due to the ability to maintain a relationship with customers for the 25+ year lifespan of their systems. This allows for more payments over time, as well as more opportunities for referrals or subsequent jobs.

There are also some important challenges to consider, however. Chief among these is whether your company has the necessary expertise and workforce, and whether you can support these additional services without compromising your current design and installation commitments.

To effectively provide solar O&M services, a company needs to be able to address three areas of functionality: core systems, supporting systems, and management, according to Laks Sampath, country manager of U.S. & Latin America for global solar O&M firm Alectris. Core systems include data monitoring systems and the data analysis capabilities to interpret results and identify problems. Appropriately skilled field personnel and strong engineering capabilities are also key.

Supporting systems include protocols for efficiently running O&M operations, such as Quality Assurance systems, development of a comprehensive knowledge-base to assist with diagnosis of similar issues, and field tracking and measurement. Management entails having proper technical knowledge as well as the ability to oversee maintenance activities, in-house and subcontractor personnel, and inventory.

Your company also needs to be able to provide a comprehensive, precise assessment of the potential profitability of a system and the O&M risks and costs. This allows you to price and schedule your services in a way that is both accurate and in line with the asset owner’s risk tolerance. However, this process can be complex and may require robust software as well as a sophisticated approach to plant operational health, particularly if your company has a large number of smaller systems or larger commercial solar plants.

Considerations for Outsourcing Solar O&M

Working with an external company specialized in solar O&M to manage O&M needs for the PV systems your company installs can have some particular advantages. For one, it can allow your solar installation company to maintain focus on its core services.

Offering O&M in-house may require you to dedicate resources to activities that are not the core of your company’s focus. This may mean focusing on “attempting to fulfill commitments made by a sales team years earlier.” Outsourcing to a contractor specializing in O&M means PV system owners have a company that is completely focused on those services and that can provide guarantees regarding system availability and response times.

The types of solar projects your company works on are another consideration, as O&M needs differ between smaller residential and commercial systems and large-scale commercial and industrial plants. Large-scale solar plants have particular needs that are sometimes most effectively managed by a dedicated O&M contractor. The paperwork can be extensive, complicated and varied and every site requires adequate staffing. An O&M specialist can be better equipped to manage multiple long-term contracts with layers of guarantees.

Additionally, making accurate predictions to plan for future O&M requirements can be challenging. This requires strategic evaluation of complex systems to know how to predict performance issues and budget for expected costs. A dedicated operations company may be better equipped in this respect.

The Contractor Relationship with an O&M Company

For contracting companies interested in working with outside O&M partners, there are a variety of ways these relationships may be structured. An O&M provider can be a subcontractor to a solar contracting company, receive referrals from the contractor, or in some cases a third party can facilitate the relationship.

The relationship between a contractor and an O&M company is sometimes administered by an asset management company. For residential systems, the contractor can have a channel partnership with the asset management company who monitors the system. The asset management company brings in a third party subcontractor to fix issues the contractor cannot handle. For commercial projects, the asset management company partners with the O&M contractor to execute services and, on a per project basis, creates O&M contracts or works with the EPC or warranty provider to structure O&M services.

What to Look for in an O&M Partner

If you’re considering developing a relationship with an O&M partner, there are a variety of factors to evaluate in potential partners. Solar Power World writes, “outsourcing solar O&M is not just about technology and techniques, it’s about partnering with someone having an international perspective of the best practices in plant inspection procedures, quality assessment plans and checklists for maintenance.” An effective O&M company does not simply provide preventive maintenance services. They must be able to fully monitor and analyze the performance of a system and work to ensure it is performing optimally.

The company should be able to follow plant inspection procedures and execute quality assurance plans. They should provide real-time monitoring, data analysis, and reporting for expedited fault handling and optimal use of resources. This should include periodic and preventive maintenance checks with IV curve analysis and thermographic imaging.

Certifications of company staff can also be a helpful indicator of competence. The North American Board of Certified Energy Practitioners (NABCEP) now offers an O&M certification, as does Solar Energy International. The team should also be fully-bonded and have clean safety records.


 Given the financial challenges inherent in solar PV O&M, such as budgeting for project performance and service needs far in advance, it is important to look for an approach to O&M that suits particular needs and abilities of your company, including what makes the most sense financially.

For all systems, one of the most crucial factors in ensuring the successful operation of the PV system over the long term is a solar contractor's ability to deliver excellence in solar design and installation. Beyond that, whether you choose to manage O&M in-house, work with a contractor, or refer your customers to an O&M specialist, consider what will best allow you to ensure optimal solar production and a good experience for your customers.

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Topics: O&M

Don’t Overlook the Power of SRECs in Your Solar Sales Discussions

Posted by Sara Carbone on Nov 28, 2018 4:05:10 PM

As a solar contractor, you’re always looking to convey the most persuasive and relevant information in your sales conversations. When you’ve found the ideal prospect, you want to make it abundantly clear how a solar installation can benefit them–including clearly spelling out the financial benefits. You also want to build trust by providing up-to-date, educational information that answers their questions and concerns about going solar.

If your prospective customer lives in a state that offers Solar Renewable Energy Certificates (SRECs), a discussion of SRECs–which can significantly increase the return on investment–should be an integral part of your conversations.

This article explores a number of important points about SRECs you may want to bring to a prospect’s attention in a sales conversation.

The Basics: What Are SRECs?

An SREC is a renewable energy certificate (REC) for solar. RECs are tradable credits purchased by electric utilities to serve as proof that they have procured a certain percentage of their energy from renewable sources like wind and solar power. The percentage requirement is established by a state as part of a Renewable Portfolio Standard (RPS), a mandate created to encourage the use of renewable energy. Twenty-nine states, Washington, D.C., and three territories have adopted an RPS.

Each REC represents the environmental benefits of one megawatt hour (or 1000 kilowatt hours) of renewable energy generation. One SREC is created for each megawatt hour (MWh) of electricity generated from solar energy systems. A state with an SREC market has a solar-specific renewable energy requirement for utilities, or “solar carve-out,” to help spur the development of solar under the state’s RPS. PV system owners in these states can earn income by selling SRECs associated with their systems’ output (in the form of these electronic certificates) into their state SREC market.

State RPS Policies as of October 2018. From the Database of State Incentives for Renewables & Efficiency (DSIRE).State Renewable Portfolio Standards as of October 2018. Source: NC Clean Energy Center’s Database of State Incentives for Renewables & Efficiency (DSIRE).

Highlight Eligibility for SREC Income

First, you may need to tell prospective solar customers if their state has an SREC market (or if they can sell SRECs in another state market), as they may not be aware.

The states that have SREC markets are Illinois, Ohio, Pennsylvania, Maryland, New Jersey, Delaware, and Massachusetts, as well as Washington, D.C. States that don’t have an SREC market but where people can sell SRECs across the border in the Ohio SREC market are Indiana, Michigan, Kentucky, and West Virginia. Pennsylvania allows SRECs to be sold into the Ohio market as well, and historically has allowed out-of-state generators to participate in its SREC market–though changes implemented in 2017 have begun to limit this.

Regardless of the presence of a state market, it should be made clear to your customers that SRECs are only available to the owners of PV systems. This means that homeowners and businesses going solar via a lease or PPA, are not eligible for SRECs. This may be an important consideration for them as they weigh different solar financing options.

States with SREC markets (i.e. that have a solar RPS) or where solar customers can sell SRECs in other state markets.States with SREC markets or where solar customers can sell SRECs in other markets. Data source: SRECTrade.

Explain the Value of SRECs

A solar system owner earns one SREC for every 1 MWh of electricity their system generates. The average size five kilowatt (kW) residential system produces between five to eight and a half MWh of electricity per year (i.e., 5 to 8 SRECs). (An analysis of the production of 4.9 to 5.1 kW PV systems designed in Aurora found an average of 6.81 MWh per year, with most systems producing between 5 and 8.5 MWh per year.) Given that, SRECs can seriously impact the financial returns of installing solar panels in some areas.

The actual amount of money a solar panel owner will receive for their SRECs varies by state market and SREC prices fluctuate over time. For example, in 2018, the price per SREC in Washington D.C. ranged from $420 to $295 and in Massachusetts they ranged from $322 to $265; meanwhile in Maryland and Ohio, they ranged from $15 to $5.50 and $7 to $3.50 respectively.

SREC value is determined by supply and demand. The demand is largely driven by utilities’ need to meet their solar RPS requirement or pay a compliance penalty if they don’t. This penalty is called an Alternative Compliance Payment (ACP) and is a per-MWh fine that electricity providers must pay for the amount they fall short of their RPS requirements. The ACP serves as a ceiling on SREC prices because electricity providers will save money by buying SRECs only if the SRECs cost less than the ACP. Therefore, lower ACP values equate to lower SREC prices.

As more solar is installed, there is a greater supply of SRECs in the market. This can result in lower SREC prices over time. However, the volume of SRECs required in a state is directly proportional to the overall RPS requirements for that particular state. Often those RPS requirements are set to increase over time, which can mean that the demand for SRECs increases along with solar installation numbers.

(Note: If you use Aurora solar software, our financial analysis tools can help you to calculate the value of the customer’s SRECs.)

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Know the Specifics of Your State Market

Each state has different parameters for their SREC program in terms of things like how much energy utilities must source from solar, the cost of the ACP, and the length of time customers can receive credit for SRECs. You’ll want to be familiar with the details of the SREC markets in the states where you operate so that you can be an effective resource for your customers.

For example, in Massachusetts, the RPS requires that, by 2020, 15% of all electricity sold by regulated electricity suppliers serving retail customers come from renewable sources. While the state’s 1,600 MW program cap has been reached, their “SREC II” program has been extended to help transition to a new Solar Massachusetts Renewable Target (SMART) incentive program. SREC prices in Massachusetts are also determined by an additional factor, the Solar Credit Clearinghouse Auction, which is an opportunity for brokers to sell SRECs at a set, guaranteed price when there is market oversupply. In 2017, the SACP was set at $350 and the Solar Credit Clearinghouse Auction II price was set at $285.

In Illinois, the RPS commits the state to producing 25% of its electricity from renewable energy sources by 2025, with 1.5% coming from solar systems. New Jersey utility PSG&G created a particularly creative initiative to provide loans to homeowners for their solar systems, allowing the loan repayment to come from the SRECs generated by their solar systems.

The length of SREC programs also vary. In Massachusetts and New Jersey PV system owners can claim SRECs for ten years. In Maryland, in contrast, eligible systems can continue to produce SRECs for the duration of the installation’s productive life. The Database of State Incentives for Renewables & Efficiency (DSIRE) is a helpful resource for state-specific research about SRECs. Being able to highlight local nuances to your customers is crucial to helping them understand the policies that will apply to them.

Limitations and Special Cases

There are a few caveats and special circumstances your customer may want to know about. If homeowners or businesses sell their SRECs in an SREC market they cannot claim that their building is powered by solar or make claims about reducing their carbon footprint with solar (particularly applicable to businesses interested in making this claim for marketing purposes.)

That’s because by selling their SRECs solar customers transfer the right to claim their energy as renewable because the utility is now using those SRECs to reduce the amount of renewable energy they would otherwise have to generate themselves. If the owner of the solar system claimed it for themselves as well it would mean the resulting emissions reductions would be counted twice, something regional tracking systems work to prevent. (For more on claims refer them to the Environmental Protection Agency’s Solar Power Use Claims Guidance.)

Customers may also be keen to know that if they sell their home or business in the future, they can transfer rights to SRECs to the new buyer as part of the sale process. This can act as an incentive for getting a higher sale price.

How Does Selling SRECs Work?

There are several ways a solar system owner can sell their SRECs. Many solar customers opt to sell their credits through an aggregator who acts as a broker between system owners and state markets. For a fee, these companies manage SREC sales to maximize returns and sometimes provide other resources like online systems to track performance.

Working with an aggregator requires less expertise and direct management than selling SRECs directly in the state market, though that is also an option. Alternatively, some customers enter into an agreement with a financing partner where they receive a fixed payment for SRECs over a set number of years. This can serve to insulate them from market fluctuations.

Some solar financing companies and SREC aggregators offer partnership programs with solar contractors. Like all major business decisions, these options should be weighed carefully. However, as you become more familiar with SRECs and the options you find to work best for your customers, these kinds of programs may be a worth exploring to help your customers monetize their SRECs.

Many customers are motivated to install solar because of the savings it can offer. A compelling sales conversation is bolstered by the inclusion of the role SRECs can play in a customer’s solar ROI. Depending on the state, SRECs can generate significant income for the system owner. Because SRECs and SREC markets can be complex topics to understand, positioning yourself as a resource to help prospective customers make sense of the details can be a great way to build trust and showcase the financial benefits of solar.

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Topics: Solar Sales, Solar Incentives

The Peace of Mind Every Solar Contractor Needs: Having the Right Insurance

Posted by Sara Carbone on Nov 6, 2018 3:02:00 PM

As a solar contractor, you know better than anyone that your work comes with a certain amount of risk. You and your business are vulnerable to a whole range of possible missteps from damage to a residence or a worker injury to loss of equipment or a truck running off the road.

The right insurance coverage is essential to mitigate these kinds of potential risks and liabilities. While there are general insurance requirements that every contracting business must meet, there are also a number of considerations specific to the solar industry. A contractor should keep these factors in mind when designing the perfect policy for their business.

In this article, we discuss some of the important insurance considerations for solar contractors and some of the coverage types they may want to explore. For firsthand knowledge about insurance for solar contractors, we spoke with Petar Georgiev, Managing Partner at Renewable Energy Insurance Broker, an insurance company that has specialized in serving commercial and industrial solar companies for the past 16 years. We’ve also included particular recommendations for the residential solar contractor from the Solar Energy Industries Association (SEIA) regarding basic standards for insurance during the construction phase of an installation, standards that need to be met for a finance provider to provide system financing.

It is important to note that it is the contractor’s responsibility to fully understand their policy in order to avoid financial losses from lack of coverage. This article is meant as a starting point because, ultimately, contractors should consult a licensed insurance broker about their particular needs when deciding on the ideal policy.

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Bottom Line Coverage

There are certain baseline insurance coverage requirements all solar contractors and subcontractors should meet. Georgiev states that policies for all contractors and subcontractors must include general liability insurance, workers’ compensation, employer’s liability insurance, automobile liability insurance, and excess/umbrella liability insurance.

General liability insurance provides several types of coverage for the contractor: bodily injury, property damage, and comprehensive coverage to protect your finances in case of lawsuits or claims. Bodily injury coverage pays for third-party bodily injuries, which means that it covers injuries that occur on the property under construction by the contractor (not including injuries to employees of the contracting company).

Property damage coverage applies to property other than the work the contractor has performed. Georgiev gives the example of a solar contractor installing a commercial solar system on a warehouse. If a fire from an electrical malfunction were to destroy both the solar system and the warehouse, the warehouse would be covered while the solar system would not.

General liability also includes what is called products liability/completed operations coverage. This covers injuries or damages that may be caused by goods or services sold by the solar contractor. For example, Georgiev explains, if a contractor installs a new solar system on a rooftop and a panel later falls off and hurts someone, then the injury would be covered (but not the panels themselves).

Georgiev states that “general liability insurance is critical for any solar contractor (general, or sub-contractor) because of the simple fact that even a single accident could turn into a lawsuit from which you could not recover on your own and without it you won't be able to protect your company and your assets.” Mike Smith, an agent with Solar Insure, another firm that specializes in solar contractor insurance, suggests that contractors retain a trimmed-down general liability policy after retirement or sell the business to protect themselves from liability. This is because there is no time limitation for bodily injury lawsuits, making them very common in the U.S.

There are two types of limits to consider when purchasing general liability insurance: the per occurrence limit (the maximum a carrier will pay per claim filed) and the aggregate limit (the total they'll pay during the policy period). Both Georgiev and SEIA recommend $1,000,000 minimum per occurrence and $2,000,000 minimum for aggregate.

Also standard for solar contractors is workers’ compensation and automobile liability insurance. Georgiev recommends a policy limit of $1,000,000 per accident, per employee for the workers’ compensation. He also suggests combined single limits of at least $1,000,000 per occurrence for vehicles owned or hired for the automobile liability insurance.

Both Georgiev and SEIA advise contractors to consider excess/umbrella insurance on top of the general liability policy to cover any loss that goes beyond the coverage. For this type of coverage, SEIA recommends limits ranging from $2,000,000 to $5,000,000. SEIA also suggests professional liability insurance if the contractor is providing design work and cyber liability coverage if they are storing confidential customer data.

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Other Coverage to Consider

There are a number of other insurance coverage considerations solar contractors may want to explore when assessing their insurance needs. According to Christy Howley of ProSight Specialty Insurance, errors and omissions (E&O) coverage “goes beyond general liability to protect against subjective claims like negligence, unfair dealing, and inaccurate advice.”

A contractor may also consider employment practices liability insurance (EPLI) for protection against employment related lawsuits including wrongful termination, discrimination, or sexual harassment. Another type of coverage to consider is obstruction of premise supplemental (OOPS) coverage which protects a contracting business from having to personally compensate a client for an installation accident that leaves their home uninhabitable. Georgiev notes that contractors may also want to ensure that their coverage includes the testing period of a new installation, which can take anywhere from 72 hours to 1 week long.

Finally, contractors should make sure that they are covered for the loss of their own work from things like damage by vandalism or a natural disaster. A “builder's risk” policy can insure against this, including covering the resulting loss of income for the project owner.

Watch for Exclusions

It is important to be aware of any exclusions in your policies. Exclusions are policy provisions that remove coverage for a particular risk, usually to narrow the scope of a very broad agreement. Therefore, Georgiev warns, there are certain situations a contractor should explicitly ask about because they might not be covered in the contract.

One such exclusion is “care, custody, and control” which means that the policy does not cover items temporarily under care or control of the contractor, like a roof. Another particularly important exclusion to be aware of is coverage for tools and materials on the jobsite. Renewable Energy World recounts the story of a contractor who had a $52,000 inverter stolen from a job site only to realize the loss was excluded under their insurance policy. Ara Agopian, President of Solar Insure, says that a contractor would need to specifically ask to add an “installation floater,” a type of inland marine insurance, to have this covered.

Another area where coverage gaps may exist pertains to working with subcontractors. General contractors should ask their subcontractors to add them as an “additional insured” on their own policy, so the general contractor can deal directly with the sub's insurance company if needed. To avoid situations where a party’s coverage has lapsed, all subcontractors should show an up-to-date certificate of insurance before performing any work. In addition to these insurance considerations, contractors should look into adding “hold harmless” and indemnification clauses in their contracts with a subcontractor. These ensure that the general contractor is not liable for negligence on the part of the subcontractor.

Additional Considerations

The amount and type of coverage a solar contractor needs varies depending on certain factors. These include the particular services of the company, such as whether they procure and sell systems or just install them or whether they predominantly install large-scale commercial PV systems or smaller residential ones. Georgiev says that proper due diligence in the beginning is key so that a contractor knows what is needed for their particular business.

Georgiev also states that it is a good idea to remember that the certificate of insurance (COI) is not the actual policy. A COI is merely temporary evidence of insurance that includes disclosure about the parties involved, coverages, and limits. All actual negotiations and agreements are already set in the policy itself and a contractor should look there when seeking to understand the details of their coverage.

Additionally, “It’s important to be open when communicating with your insurance company. During the quoting process, the more information an insurance provider has about your operations, the better job we can do to help you craft the appropriate coverage and potential safety programs best suited for your company,” says Matthew Burrows of Travelers Insurance.

Finally, there are a number of steps a contractor can take to keep premiums low. Treating employees well, making sure they are sufficiently trained, and using up-to-date equipment are important. Having industry certifications like NABCEP certification can also help offset long-term costs.

Understanding your unique insurance needs as a solar contractor can help you avoid costly gaps in coverage that may haunt you down the line. Working with a broker that specializes in solar is can be helpful, because they will be familiar with solar contractors’ needs. Taking the time to ensure appropriate coverage is good for contractors and good for the industry in general. You'll have peace of mind knowing you are protected if a claim arises and the solar industry can function with greater stability.  

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Topics: Solar Business Tips

SolarAPP: The Solar Permitting Solution You’ve Been Waiting For?

Posted by Sara Carbone on Oct 30, 2018 6:20:47 PM

As a solar contractor in the U.S., you probably have to contend with the complicated and costly permitting process. You may view it as a frustrating but necessary obstacle to getting a job completed. But a new initiative was announced last month that may help remedy the situation.

Solar Energy Industries Association (SEIA) and The Solar Foundation unveiled the Solar Automated Permit Processing (SolarAPP) initiative which seeks to expedite and lower the cost of solar permitting. SolarAPP would streamline the process by offering online tools to implement a rules-based, automated permitting and inspection process. It would also allow for instantaneous permitting for eligible installers on non-complex solar projects on the local level.

In this article, we explore some of the problems caused by the current permitting process and discuss the SolarAPP initiative and what it may mean for the U.S. solar industry.

The Problem of the Permit

Many solar contractors point to the permitting process as a problematic aspect of doing business. It tends to be expensive, time-consuming, and occasionally costs them clients. Some of the major issues are significant inconsistency in permitting processes between jurisdictions and long turnaround times.

“How does your service administrator plan a job when the permitting process is so variable?” asks Reeves Clippard, CEO of A&R Solar. “Managing the paperwork and requirements and doing it in a timely manner is a real challenge. So many exceptions and variations makes streamlining this hard."

Permitting challenges are more than just a logistical headache for solar companies and clients–they result in real costs that impact the growth of the solar industry. According to GTM, permitting adds about three months to a typical residential solar system installation. It also adds approximately $7,000 in direct and indirect costs, about $1.00 of the 2017 median residential system cost of $3.70 per watt.

Permitting is one source of added solar costs–another is ineffiecient design  processes. See how Aurora can help you costs with accurate remote solar design  in a live demo.

According to Sungevity co-founder Andrew Birch, simplified, automated solar permitting processes in major overseas markets like Australia have translated to significantly lower price per watt, rapid industry expansion, and minimal cancellation rates.

Permitting has long been recognized as a pain point in the solar industry. There have been a variety of state and regional efforts over the past 15 years to streamline permitting, with varying degrees of success. States such as California and Massachusetts have tried to simplify and expedite the process, as have certain regions like Long Island and the Northwest. To date, however, there has not been a broad, coordinated effort to solve the issue.

“How does your service administrator plan a job when the permitting process is so variable? Managing the paperwork and requirements and doing it in a timely manner is a real challenge." – Reeves Clippard, CEO of A&R Solar

SolarAPP: A Potential Game Changer?

This new initiative represents the most comprehensive attempt at solar permitting reform. SolarAPP would allow residential contractors, small commercial contractors, and battery storage installers to become accredited via a central online registration portal. It would remove the need to appeal to local authorities for permission to install a system. The main components of the plan are:

  • Replacing the current multi-step process with a skills training and certification program that would ensure contractors are compliant with applicable codes, laws, and practices;
  • A free, standardized online platform for local governments to “register” and automatically screen qualifying systems;
  • A list of equipment standards and certified equipment;
  • Codified system design standards for qualifying solar projects;
  • A model instantaneous permitting regime for systems installed by certified contractors;
  • A program administrator who oversees and implements the plan and provides technical assistance to state and local jurisdictions and utilities.

The initiative may mimic other countries and utilize quality control measures like spot checks–with the threat of loss of accreditation for noncompliance–to ensure solar systems are being installed to code.

The creators of SolarAPP are looking to relieve the burden of permitting for both customers and solar contracting businesses by removing unnecessary red tape, standardizing the steps, and lowering overall costs. “The goal is to make solar permitting more straightforward, and more routine, while at the same time maintaining the safety and reliability that U.S. solar projects are known for,” says SEIA President and CEO Abigail Ross Hopper.

The Solar Foundation asserts that SolarAPP will help make solar available to a wider range of income levels, cultivate a high level of excellence among solar companies, and help energize the industry across the value chain.

The next steps to make SolarAPP a reality include policy discussions on multiple levels of government, which SEIA will spearhead. The Solar Foundation will lead efforts to create the accreditation process with certified products and the online registration system. One of the remaining challenges to be addressed is to communicate how a centrally managed system addresses present concerns about safety and quality. Birch argues that a centralized process can actually offer greater safety, compared to a “completely disparate group of building offices… trying to individually manage the safety of solar and distributed energy.”

If successful, SolarAPP could be the much-needed change the industry has been waiting for. It could mean an easier, more cost-effective approval process for customers and contractors alike that helps usher in considerable industry growth. Billy Parish, CEO of Mosaic, states that the creation of an automated solar permitting process that reduces soft-costs "is the next frontier in affordability, critical in moving us toward clean energy for all."

  

Topics: soft costs, Solar Permitting

How Have Solar Tariffs Impacted the Industry–and What Can We Learn?

Posted by Sara Carbone on Oct 23, 2018 9:21:40 AM

Concerned about solar tariffs? You’re not alone!

Given that there have already been three tariffs introduced this year that affect the solar industry, it’s understandable if you’re concerned over their impact on your business.

In today’s article, we provide an overview of each of the 2018 solar tariffs to date and explore the extent of their impact so far. We spoke with David Dunlap, Vice President of Operations at Baywa r.e. Solar Systems, to get a distributor's perspective on the impact of these tariffs on contractors.

Tariffs have definitely caused some pain in the industry, but thankfully the repercussions have not been as dire as many initially expected–at least for solar contractors and customers. And, there may just be some lessons to be learned from the experience!

The Context

When the first solar tariff was announced in January 2018, there was a great deal of uncertainty about how it would impact the industry, but many feared the worst. An initial industry response predicted a loss of approximately 23,000 jobs in the solar sector. Indeed, cancellations of more than $2.5 billion in large installation projects by solar developers have resulted in a loss of thousands of jobs this year.

There were a lot of factors at play, however. M.J. Shiao of Wood Mackenzie Power & Renewables highlighted the multitude of forces impacting the economics of the solar market, in addition to the tariffs, in a GTM podcast. Among these were the upcoming reduction of the Investment Tax Credit in 2020, lower interest rates in general, the repeal of the Obama-era Clean Power Plan, and individual states’ efforts to drive their own pro-renewable policy agendas in response. Some of these elements have tempered the extent of the tariffs’ impact, particularly for residential and commercial installers.

Today, after some short-term turmoil, module prices have largely stabilized and the impacts of tariffs on other solar components are expected to be less severe. Dunlap explains, “Entering Q4 2018, PV module prices to installers are flat to 10% below [prices before the first tariff was applied in February 2018].”

The Solar Tariff on Panels and Modules: Section 201

In January 2018, the Trump Administration announced a 30% tariff on imported crystalline silicon PV panels and modules, imposed under Section 201 of the Trade Act of 1974. The decision came after two module manufacturers, SolarWorld and Suniva, argued they could not compete with the lower-priced imports. The tariff, which went into effect in early February, will be reduced by 5% a year over four years. The first 2.5 gigawatts of imported cells are exempt.

Though there was quite a bit of concern about the impact of this particular tariff, so far there has not been a dramatic market shift. Dunlap explains that “while there was a temporary spike in prices from the 30% tariff (effectively anywhere from 0% to 20%), we have since recovered to end of 2017 pricing while the manufacturers are still paying the 30% import tariff fee.”

Stockpiling and Supply Chain Pain

In anticipation of this tariff, many solar firms stockpiled their supplies. As Dunlap explains, “Manufacturers and distributors saw a huge spike in sales leading up to the tariff date (Q4 [of 2017] was huge, and January plus some of February were way above normal). This means that project development companies and large and medium installers stuffed their warehouses, and maxed out their cash reserves and credit lines to lock down inventory.”

“By April and May, sales slowed down dramatically, because the entire channel was stuffed with all this product purchased in advance. If we were to look at the total excess inventory bought by installers in Q4 + Q1 and spread it out over Q2 and Q3 2018, the total net sales to installers would be right in line with overall market expectations for 2018, which was flat to maybe only 10% up year over year.”

He says that only later did it become apparent that the module price increase caused by the tariff was temporary because manufacturers were ultimately forced to reduce prices to stimulate demand (while still paying the 30% import fee). However, Dunlap does point out that many installers who stockpiled are struggling with resulting challenges around cash flow, storage costs, and credit lines.

Dunlap also notes that in many cases residential customers were insulated from a net price increase. This is because many installers who had to absorb the temporary 10%-15% spike chose not to pass on the price increases to the customer.

Other Factors Influencing Module Prices

Another global policy factor which seemed likely to impact U.S. panel prices was China’s mid-year decision to halt the majority of it’s solar development, which eliminated 20 GW of global demand for solar and shifted the panel market to one of oversupply. According to Dunlap, however, that ultimately the policy change had little impact in the U.S. because earlier anti-dumping tariffs had shifted module imports from China to Southeast Asian countries like Malaysia and Thailand,

However, he does predict additional price reduction due to the expiration of the Minimum Import Price for Chinese modules in Europe. This has “opened the floodgates for excess Chinese capacity to go to Europe at far lower prices than had previously been allowed.” Already prices have dropped 30% in four weeks. Dunlap says this will remove European demand for Southeast Asian products, leaving the U.S. as the only real market for their modules–driving prices down even further.

Solar Tariffs on Additional System Components: Sections 232 and 301

In March, the Trump Administration imposed a 25% tariff on steel and 10% tariff on aluminum under Section 232 of the Trade Expansion Act of 1962, increasing prices for racking, wiring, and ground mount posts.

Then, in August, a 25% tariff implemented under Section 301 of the Trade Act of 1974 was placed on a host of imported Chinese goods – including solar cells and modules. Another tariff was added to Section 301 on September 24 that includes solar inverters and non-lithium batteries; it starts at 10% and increases to 25% in January.

Once again, the impact of these tariffs is not thought to be dire. As Dunlap mentioned, Chinese cells and modules make up a small fraction of U.S. solar imports (11% reports PV Magazine). Plus, most new factories planned for the U.S. will not be affected because they use materials that do not come from China.

Dunlap believes that “Looking ahead to the Section 301 tariff affecting certain Chinese-manufactured inverters, the net impact to the overall system will be much lower than in the Section 201 tariff on PV modules, because inverters are a lower portion of the total system equipment cost than PV modules.” Plus, “it won’t even affect all manufacturer brands, so therefore won’t affect all installers and homeowners.”

He also notes that since equipment prices have dropped so much over time, hardware now represents a much smaller piece of the overall system cost.

Conclusions

The 2018 solar tariffs have certainly had an impact on the American solar market. Amanda Levin, a policy analyst for the Natural Resources Defense Council, recently noted that the solar market would almost certainly be growing more rapidly if the current administration had not imposed these tariffs.

Cory Honeyman of GTM Research, whose organization lowered its prediction for additional U.S. solar generating capacity for the next five years by 11%, stated, “There’s just a lot of demand that could have happened that is not going to ultimately be realized because of these tariffs.”

But although the solar industry could be growing faster if tariffs had not been imposed, the prediction continues to be for rapid growth for solar in the U.S. The SEIA Solar Market Insight Report 2018 Q3, released in September, showed some positive numbers including the prediction that total U.S. installed PV capacity will more than double over the next five years. As of July, there has only been a loss of 8,000 solar jobs.

For Dunlap, the industry’s response to tariffs offers some lessons for the future. “In retrospect, I think our collective industry fear about the potential negative impact on the consumer market caused us to act somewhat irrationally to “safe harbor” more product than we actually needed… and caused financial stress on all organizations…. All of that stress and effort resulted in very little change to the rate of new installations in the end.”

“As our industry grows up, I hope we can manage cost changes in healthier ways.” He concluded his remarks by noting that “there is very little room for additional cost reductions in solar equipment with current technology, and as an industry, we need to focus our value-engineering efforts on non-hardware costs, which have much more room for improvement.”

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Topics: PV System Costs, solar policy

Make the Most of SPI: Conference Highlights and Tips for Success

Posted by Sara Carbone on Sep 19, 2018 8:00:27 PM

Solar Power International (SPI), the largest North American solar trade show and conference, is just around the corner! It’s a terrific opportunity to get a firsthand look at the latest in innovative technology, industry research, and key issues impacting solar contractors. You can also network with a whole host of industry experts, check out the competition, and pick up some great business insights. But you’ll get a whole lot more out of the event if you go with a carefully thought out plan of action.

For those of you attending SPI (it isn’t too late to sign up!), we’ve identified some choice learning opportunities and events to add to your agenda–as well as some things to keep in mind to get the most out of the event.

SPI_2018_Shareables_1200x630_3

Conference Overview

SPI is running from September 24-27 at the Anaheim Convention Center in Anaheim, California. It will be attended by solar professionals from all segments of the industry–from contractors and developers, to financiers, manufacturers, software providers and more–across the residential, commercial, and utility-scale sectors. Last year saw 20,000 attendees and over 750 exhibitors. The event is put together by the Solar Energy Industries Association (SEIA) and the Smart Electric Power Alliance (SEPA).

Each of the four days is made up of a variation of the following: a general session, educational sessions in the meetings rooms and on the expo floor, networking opportunities, and various other events like poster presentations and educational walking sessions.

You can register as a Full Conference attendee and take advantage of all the educational content available. Or you can register for the Expo Floor only, where you can access education opportunities on the trade show floor or at the Expo Floor Education Theaters, as well as attend general sessions and poster exhibits. The Expo Floor pass is a great option for those focused on connecting with current and prospective business partners.

The SPI website is an excellent resource, featuring a summary of the week’s events. It also gives you the ability to save favorite events and build your own custom schedule. Take advantage of the interactive floor plan to identify the locations of stages, meeting rooms, connected hotels, and exhibitor booths. You can click on a booth to learn more about an exhibitor and jump to their website.

SPI_Expo_Floor_Map

A map of the SPI Expo Floor. Click on the image to visit SPI’s interactive floor plan.

Educational Highlights

There are over 100 education sessions at SPI, many of them on the show floor. Their themes range from distributed energy to grid modernization, finance, policy, asset management, storage, and microgrids. The general sessions, open to all attendees, tend to be highlights. They offer an high-level perspectives on key issues affecting the market from a number of distinguished speakers.

Tuesday’s general session at 8 AM at the Marriott Platinum Ballroom, Turning Positive Solar Attitudes to Positive Results, features such heavy-hitters as SEIA President Abigail Ross Harper, Omar Johnson–Chief Marketing Officer at Beats By Dre and former Apple VP of Marketing, Matt Lewis of the Daily Beast, and former White House Communications Director Jen Psaki. They’ll be discussing how to use data-supported messages to effectively advocate for solar’s growth in the U.S. energy marketplace.

There is something for everyone among the many other educational sessions. Sessions on Tuesday that may be of particular interest (and open to all attendees) include talks addressing the fundamentals of customer acquisition, myths about solar demographics, and strategies for cutting the cost of residential solar. Wednesday includes open access sessions on solar O&M, the “internet of energy,” and key metrics and strategies for running a healthy solar business.

SEIA and GTM Research will be presenting their latest U.S. Solar Market Insight Report (Q3 2018) on Thursday at 11:30 AM in Industry Trends, Booth 189–providing a robust look at latest market numbers and trends. 

Building on the theme of industry trends, our own COO, Samuel Adeyemo, will be giving a presentation on The Role of Software in Transforming Solar Design with John Miller, Solar Technology Manager at Black & Veatch Corporation on Tuesday at 1pm on Level 2 in room 202AB. (We’ll be showcasing some brand new tools to take your solar design and sales to the next level!)

Twitter Card final -Transforming Multi-Megawatt Solar Design” on Tuesday, September 25

There are also over 80 educational posters on display all four days of the event in the education corridor, near the walkway to the Westgate Hotel. These great snapshots of current market innovations and issues. There will be presentations of many of them during a reception on Tuesday from 5 - 6 PM. (We’ll be there discussing some of the Top Technologies Changing Solar Design.)

Networking Opportunities

There are over 23 hours of networking events sprinkled throughout the conference–so bring those business cards! These include coffee breaks, job fairs, happy hours (one hosted by SETS specifically for young professionals Wednesday 5 PM at Booth 3386) and even a block party and an Oktoberfest. For job seekers, solar nonprofit Grid Alternatives is hosting a solar job fair on Wednesday from 1 - 4 PM.

There are two events specifically for solar industry women: the Women in Solar Luncheon (largely sold out but you might get tickets on-site) on Wednesday at 12 PM at the Marriott Grand BR Salon E and the Women of Renewable Industries and Sustainable Energy happy hour on Wednesday at 4 PM.

Tips for Making SPI Count

With so many great opportunities to choose from, you may be wondering how you can be sure to make the most of your time in Anaheim. Here are some tips from the Aurora team and other industry professionals:

1. Plan. 

As we’ve discussed above, there are a ton of things to see and do at SPI. Avoid getting overwhelmed or missing out on what’s most important to your company by defining your goals and planning out meetings and events you’ll attend each day.

Jeff Spies (Quick Mount PV Sr. Director of Policy, NABCEP Secretary, and Director of the solar documentary Solar Roots) suggests mapping out your plan of action in your event directory.

Jeff Spies Tip- directory + plan

Saving your favorite events on the SPI website and building your schedule is another good approach, as is using the SPI app, as solar marketing expert Tor Valenza suggests.

Solar Fred- Download the App(You can hear more SPI tips from Tor and others in an episode of Suncast, a podcast that interviews solar thought leaders.)

2. Connect.

One of the most valuable benefits of SPI is the chance to meet face-to-face and build relationships with other solar industry professionals, be they existing or potential partners, customers, or those you want to learn from.

Solar distributor BayWa r.e. recommends making appointments in advance (even the day before) to get some dedicated time with a company.  John-Ross Cromer who runs the solar training site Community.Solar suggests that this is a great time to try out new tools to make sure you keep track of contact information and can effectively stay in touch with those you meet.

Community.Solar- outreach tools

3. Recharge.

Long days of meetings, conference sessions, and walking the show floor can leave anyone exhausted. Make sure to take take care of yourself so you can bring your full energy to the experience. That includes hydrating, getting enough sleep, and taking periodic breaks.

Sam Tip- Stay Hydrated

4. Follow up.

Finally, don’t let your new insights and connections go to waste by failing to act on them when you get home. In their SPI roundup, Baywa r.e. recommends scheduling a team meeting shortly after you get back. This way you can capture ideas while the memories are fresh and map out actionable next steps.

We wish you a successful SPI experience and hope to see you there!


P.S. We’re unveiling some exciting new developments at SPI so make time to stop by the Aurora booth (138)  Plus, we're offering a free high-resolution shade report to anyone who visits and shares their business card or scans their badge!

Aurora SPI Location Version 4-1

Topics: Industry Events

Does Solar Increase Home Value? The Latest Data for Solar Clients

Posted by Sara Carbone on Aug 22, 2018 10:00:00 AM

Selling a solar PV system is not always easy. Prospective solar customers have concerns about everything from ROI and how to finance it to how it will affect the aesthetics of their house. And they’ll likely want to know what having a PV system will do to the value of their home–now and in the future if they want to sell.

The more specific you and your sales team can be about the benefits of installing solar, the better. A number of studies provide compelling data about how solar increases home value. This information can go a long way towards helping a prospect feel confident making the leap.

In today’s article, we highlight some facts about how solar affects home value–and the studies behind them–that your clients will want to know.

Their House Will Sell for More

Lawrence Berkeley National Laboratory (LBNL) conducted a report that definitively showed that homes with solar sold for more than houses without it. The 2015 study, Selling Into the Sun: Price Premium Analysis of a Multi-state Dataset Of Solar Homes, analyzed 22,000 home sales in 8 states, 4,000 of which included PV systems, from 2002 to 2013.

The study found that each watt of solar added an average of $4 to the home’s value in California and an average of $3 per watt elsewhere. This amounted to an average increase to the home’s selling price of $20,000 in California ($4 x 5,000W for the average system size) and $15,000 outside California ($3 x 5,000W).

Another study, An Analysis of Solar Home Paired Sales Across Six States, published in the Appraisal Journal–the nation’s largest professional association of real estate appraisers–found similar results. Their examination of sales of homes with solar systems in six states from 2010 to 2014 found that properties with PV systems sold at a premium in all of the markets.

The average premium was $14,329 per home, which was 3.74% of the average sale price. They did find that the premium as a percentage of the property’s selling price was very dependent on the size of solar system and the home’s price range. Another point was that the multiple listing system (MLS) that posted the house had to include information on the PV system to factor into the value of the home during an appraisal.

Their House Will Sell Faster

An earlier study by the National Renewable Energy Laboratory (NREL) looking at high-performance homes in California found that homes with PV systems sold 20% faster (and for 17% more) across several subdivisions built by different California builders. Their study of several hundred home sales also revealed that if a solar system was already installed and factored into the price, buyers were more likely to choose that house over others without solar. Some other interesting findings include: the aesthetics of a PV system were not identified as an obstacle to purchasing and the resale value was not damaged by the presence of a solar system.

They’ll Likely Recoup the Cost of the System When They Sell

The $15,000-20,000 addition to the selling price found in the LBNL study Selling Into the Sun (cited above) is similar to the typical cost of the average rooftop solar system. Given that the average cost of a new 6kW PV system is between $16,260 and $21,420 (before the 30% federal Investment Tax Credit), it is a pretty good bet that the homeowner will make back the money from their initial investment in the resale.

Other Considerations

There are many factors that could influence the extent to which a PV system adds value to a home. Here are few considerations your customer may want to be aware of when considering the increased home value solar may provide.

Regional Markets and Electricity Costs Matter

One factor to keep in mind is that the largest increases to the value of a property may tend to come in regions with high electricity rates and strong solar incentive programs. High energy costs can make a home with a PV system more sellable. For instance, Long Island’s high energy rates have been a boon for the solar market there; the area is home to about 40% of all solar systems in New York. Gerard O’Connor, a local appraiser, stated that buyers are “certainly willing to pay more” for a home where high electricity prices increase the savings from PV systems.

And higher energy costs can mean higher home value for homes with solar during the appraisal process. When appraisers consider the role of a PV system in the calculation of a home’s value, electricity produced by the system can be considered income, whether due to savings or from utility production credits, as noted in appraisal guidelines for green and high-performance properties from the Appraisal Foundation (see p. 36-38).

Ensuring PV Is Factored Into Home Value

Lenders, real estate agents, and appraisers should account for the value added by a solar system–and some may not know to do this (so your customer should point it out). The Federal Housing Authority (FHA) and Fannie Mae both have guidelines for valuing the system during appraisal. Sandia National Laboratories has a free tool designed to help real estate appraisers and others calculate the value of a new or existing PV system.

(Note: If you want to help your customer understand some of the metrics used to quantify the value of a home solar system (property value aside), our blog post on the topic is a good place to start. Plus, Aurora’s financial analysis tools are able to calculate all of these metrics easily, including payback period and projected cash flows over the life of the system, so you can easily communicate that value in your sales proposals.)

Most Data Focuses on Owned PV Systems

Much of the research to date, including the LBNL and Appraisal Journal studies discussed here, focus on homes where the PV system is owned by the homeowners–not third-party owned systems financed with PPAs and leases. The authors of the LBNL study recommend more research into the impact of leased systems on home value. Also, leased systems or ones paid through a PPA will not be included in an FHA or Fannie Mae appraisal.

Beyond the need for more data on how third-party owned PV systems affect home resale value, these types of systems present their own unique complexities in the home sale, such as the need to transfer a PPA or lease to the buyer.

System Size and Age

One factor found to affect resale value was PV system size. The Appraisal Journal study found that the premium as a percentage of the property’s selling price was very dependent on the size of solar system, and the LBNL study also found value corresponded to the capacity (W) of the PV system.

Another influencing factor in the extent to which solar increases home value might be the age of the system when the home is sold. The LBNL study notes that the depreciation of aging solar systems may decrease the value added to the home during appraisal. However, as the study authors note, exactly how system age impacts the numbers is unclear because there has been little research about it given the immaturity of the American solar market.


Adding a PV system is a significant decision for any homeowner; it requires careful consideration about the pros and cons and a good amount of trust in the contractor they work with. Being prepared to provide research-backed information about the benefits of solar, including the value it can add to the home, will help build trust with prospects and keep customers, both past and present, glad that they chose to work with you.


Note: For those looking to further explore the research on this topic, this Field Guide to Solar PV Energy Features, compiled by a co-author of both the LBNL and Appraisal Journal studies, is an excellent starting point for further reading.

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Topics: Solar Sales

A Solar Market Niche You May Have Overlooked: Low- and Moderate-Income (LMI)

Posted by Sara Carbone on Aug 15, 2018 3:42:01 AM

There’s a growing trend in the solar market that some solar contractors may have overlooked: moderate- and low-income households as solar customers. As the cost of solar has gone down and financing options have expanded, these communities are becoming a more and more viable niche for the forward-thinking solar contractor.

There have been a number of successful solar policies enacted around the country intended to achieve a more balanced level of solar market participation across incomes. The 2016 Low-Income Solar Policy Guide by nonprofits GRID Alternatives, Vote Solar, and the Center for Social Inclusion, discusses a myriad of federal, state and local level policies and tools aimed at bringing solar to low-income communities. The guide asserts that organizations that enable these communities to participate in solar are making a valuable investment, “whether motivated by… critical justice issues, the climate crisis, or the economic opportunity of a largely untapped solar market sector.”

The idea of an untapped market sector for solar is a very attractive one these days. Market saturation, fierce competition, and recent unfriendly government policies have put pressure on solar contractors to find innovative ways maintain growth and differentiate themselves. Broadening and diversifying the populations your company works with could be a smart move, whether from a marketing, financial, or mission-driven perspective. In a recent interview on our blog, Abby Hopper, President and CEO of SEIA–who has made inclusivity a priority for the organization, emphasized the solar market’s need to diversify its customer base.

While barriers to solar adoption remain for many low- and moderate-income households in America, a recent study has surprising findings about the viability of this sector.

Compelling Data About A Solar Market Niche

The report, Income Trends of Residential PV Adopters, was conducted by Lawrence Berkeley National Lab’s Electricity Markets and Policy Group to paint an accurate portrait of current rooftop solar adopter income levels in America and discuss recent and future developments. In particular, the authors sought to provide comprehensive information about low- and moderate-income (LMI) households.

The study examined data for 781,153 residential PV systems in 13 states, representing 61% of all residential systems in the US. The authors explain that their analysis is unique in part because, contrary to previous studies, they pull income estimates for each available street address, rather than from a more vague source like zip code.

There were a number of unexpected, and highly relevant, findings. Unsurprisingly, the median income of PV adopters was found to be higher than other households. A big reason for this is that that home ownership is the determining factor in a household’s likeliness to go solar and fewer LMI households are homeowners.

However, when comparing just owner-occupied households, that margin of difference was significantly smaller. Plus, the gap in income between low- and high-income PV adpopters was smaller in states with higher incomes overall than in lower income states. Additionally, in those higher income states, a larger fraction of households below the median income were found to afford solar.

The study also found that a sizable portion of solar adopters are moderate-income households. It found that this portion of the population comprises 33-50% of solar adopters in 13 states, and the market share of this group is rising. Additionally, low-income groups (below 200% of the Federal Poverty Level) make up 15% of all PV adopters within the sample.

The authors attribute this to the growth of third-party ownership, more attention from agencies and solar contractors, and a general maturing of the solar market (i.e. consumer awareness). They also highlight the declining solar costs as an important factor, something Hopper points to as well. She states, “in four states, the average income of solar adopters is on parity with average income in the state; it's right where it should be."

Also unsurprisingly, the study finds that use of third-party ownership options, like leases and PPAs, are more concentrated among LMI solar adopters. However, the authors points out that this fact in itself is notable, “given the oft-stated concern that lower-income HHs may have more difficulty qualifying for TPO contracts, given a presumption that these HHs have lower credit scores.”

Conclusion? Lower- and moderate-income communities should not be ignored.

Thinking Outside the Box to Tap Potential

What all this amounts to is that LMI households represent an opportunity for forward-thinking solar companies to build business models that take advantage of a previously overlooked niche. And this might mean rethinking the usual way of doing things.

For example, the Yale Center for Business and the Environment released a report in 2017 that examined marketing tactics for LMI customers. In addition to some interesting findings around why and why not LMI families adopt solar, they found that LMI households tended to respond best to information about solar from print articles and community newsletters, town leaders and events rather than online media or a letter identifying their house as well suited for solar.

It could also mean embracing solar offerings previously unexplored by most solar businesses. The Berkeley Lab study points to the advantages of targeting groups like multi-family households and renters who often access the benefits of solar through community solar, a form of solar particularly important to LMI households.

Community solar is a growth market: a joint study by the Smart Electric Power Alliance (SEPA) and the Coalition for Community Solar Access (CCSA) report found that community solar in America grew 112% in 2017, from 387 MW to 734 MW. And Abby Hopper states that, “community solar has really taken off in the past year...it's very accessible to people; it’s a business model that intuitively makes sense...So I think community solar will continue to grow." All of this means an opportunity for solar contractors to broaden their customer base and explore less crowded markets.

Riding the Wave of the Future

In light of all the changes the solar industry goes through, thinking outside of the box can be an advantageous strategy for solar contractors looking to grow their business. Understanding that the income profile of PV adopters in rooftop solar is always evolving can help the savvy contractor anticipate and capitalize on market opportunities. Ultimately, embracing making LMI households an integral part of your company's future plans could mean joining what study author Galen Barbose calls “a new frontier.”

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Topics: solar industry

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