Solar and Geothermal Sales and Marketing Tips

Sales and marketing is key to a profitable renewable energy company.

We write sales and marketing posts that teach companies how to find their first project, leverage their first projects into more projects, and how to find the best customer, and quote a job profitably.

Great Free Resources on Geothermal and Solar Sales
Download the Geothermal Site Visit Checklist
Download the Solar PV Site Visit Checklist
Download the Solar Thermal Site Visit Checklist
How to Use Solar Leases to Grow Your Business
Selling Geothermal as a Hedge Against Rising Energy Prices

[Interview] How Faze1 Used Data to Acquire a 5kW Residential Solar Customer for $0.25/watt

Marcpicture.001

This is the story of how Faze1 learned how to acquire a 5kW residential solar customer in Massachusetts for $1,250 or $0.25/watt. This is  about 50% lower than the $0.49/watt that is typically referred to for average residential customer acquisition cost in 2014.

Faze1 used three strategies to achieve this goal, which we will describe in detail in this interview: mapping technology, predictive analytics, and software automation. They used mapping technology to pre-screen all 1.2 million single family detached homes in Massachusetts in order to narrow their search to the most attractive 25% of all roofs. They narrowed down the 300,000 homes with the best roofs by using predictive analytics to identify the homeowners that most closely matched the demographic characteristics of the existing 6,000 solar customers in Massachusetts. Lastly, they used software to automate the entire process.

What’s More Amazing?

Now any solar company operating in Massachusetts can use Faze1 software to quickly and easily grade your own leads to identify the best leads.

Faze1′s SunVIEW is faster, cheaper, and better than using Google Maps to screen potential solar customers.

With Faze1, you’ll be able to instantly get site suitability information (roof size, tilt, azimuth, usable solar sales, shading) and important demographic information (FICO score, house size in square feet, occupancy and ownership, expected yearly electric use in kWh, utility territory and bill, years in home, and more) so you can identify customers that are both willing and able to purchase solar. Click here to download Faze1′s complete data dictionary to see what you can learn about each of your solar leads.

Finding the best customers with the leads that you’re already generating will lower you customer acquisition costs because you’ll spend less time on bad leads.

Faze 1 vs. Google Maps = Faze1 Wins, Hands Down

faze1 vs google maps

And What’s Super Amazing? 

Because you’re a HeatSpring reader, we’re giving away 30 free trials to residential solar companies that are located in Massachusetts. Insert your information below to sign up. These will go fast.

Faze1 + HeatSpring --> RSVP to get 1 of 30 Massachusetts Free Trials

Let’s Get into the Interview

This is an interview with the three members of the Faze1 team. Full disclosure: I’m a Faze1 advisor. The team members are Marc Guy, Elliot Goodwin, and Adam Hannah.

The interview tracks the story of Faze1 from the company’s beginning to where they are currently with SunVIEW. There are three significant stages to the history of the company that will be useful to anyone interested in product development and the solar industry and tell the story of an “okay” idea (sorry guys!) to an extremely valuable product.

Interview Highlights

  1. Marc and Elliot had early experiences doing statistical analysis with the Massachusetts Clean Energy on Solarize campaigns that showed them lead generation and project size doesn’t necessarily equal profits. You can see 2012 Solarize data here.
  2. How a used car salesman (yes, the stereotype is true) helped groSolar standardize and improve their sales process.
  3. How the team applied proven mapping technologies that were already being used in the other established industries to screen the 1.2 million single family homes to find the most attractive homes.
  4. Most solar companies focus on revenue instead of profits which mis-directs their marketing. They think they wanted more leads and site visits, but what they actually need is a more profitable way to process and screen their existing leads to find the most profitable ones.

3 Stages of Faze1 Product Development

Roughly speaking, Faze1 developed their Sunview product in three steps:

  • Stage 1. Faze1′s initial goal was to use data to find the best customers and in Massachusetts and sell the list to EPCs.  They found 30,000 of the best solar leads in the state, based on the characteristics of the existing 6,000 solar customers in Massachusetts, and the goal was to sell these leads to companies. This didn’t work. Why? The value of these leads is directly proportional to the ability of a company to process them. This ability was very low.
  • Stage 2. The second step was create a direct mail campaign and market directly to those leads and sell site visits to EPCs. Faze1 was able to generate leads extremely effectively and found out that their site screening predictive model was effective. This allowed them to find customers very cheaply. They didn’t have the cash to sustain long direct mail campaigns, but they learned that their process and software worked very well.
  • Stage 3. Faze1 decided to sell access to their model through a software product that EPCs can use to quickly, easily, and cheaply identify the best leads from the leads that they’re already generating.

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Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | 1 Comment

6,500+ Word Guide to Solar Water Heater Installation Best Practices

This is a guest post from Bob Ramlow, solar thermal expert and the teacher of our Solar Thermal Boot Camp. Bob’s next solar thermal training starts on September 30th. If you need to know exactly how to design, install and quote solar water heater system, this class if for you. Click here to sign up.

I asked Bob to write an article on best practices for commissioning solar thermal systems, but he quickly realized without proper understanding of installation best practices, commissioning doesn’t matter too much.

Enter Bob

In my work with many solar water heating manufacturers, designers and installers here in the upper Midwest I have compiled a list of best installation practices for solar water heating systems. This work is collaboration and is ongoing, so if you have anything to add to this work, please send me your additions.

Here in Wisconsin where I live the climate is harsh for solar water heating systems. I have over 9,000 heating degree-days and temperatures can reach well over 1000 F during the summer and fall to -300F or colder during the winter. I have also seen the temperature drop over 400F in less than a day. This is a tough environment for a solar water heating system to survive in. If a solar water heating system can survive here in Central Wisconsin, it can survive anywhere. As is often the case, the devil is in the details, and when designing a solar water heating system it is imperative to get all the details correct if we want a quality installation.

And details are what we have in this compilation. We have included every subject matter that seemed appropriate to a best practice in solar heating system installation. Of course the installation begins with the sale, so that is where we start. My next article in this series will be about commissioning. I will be referencing this best practice manual in that next article.

Introduction to Solar Water Heater Installation Best Practices

This manual was developed as a tool to assist solar thermal designers and installers as a guideline to provide the most reliable solar hot-water systems possible. The material presented here is not intended to be used as a list of system requirements or as a type of solar code. Rather, it was assembled with the input of many parties to share lessons learned in the field. It is not inclusive and is a work in progress.

This manual was developed in Wisconsin where some parts of the state have over 10,000 heating degree days and where winter temperatures regularly fall below -30°F. In fact, the record coldest temperature recorded in Wisconsin was -55°F. During the summer, temperatures can rise above 100°F. While most climates are not this severe, the practices outlined in this manual will be helpful for system designs in all cold climates as well as in warm climates.

A properly designed solar hot-water system must not only function properly during extreme cold and hot environmental circumstances, it must also be able to safely endure sustained periods of low or no hot water draw without damage or overheating.

A best practice is defined as:

  • A practice that is most appropriate under the circumstances.
  • A technique or methodology that, through experience and research, has reliably led to a desired or optimum result.

Overview:

A well-designed solar water heating system that is appropriate for the climate where it is located and is properly installed with appropriate solar rated components will last for many years. Being a mechanical system, some components will eventually wear out and fail. The typical wear parts in a solar water heating system include the pumps, the expansion tank, automatic valves and the solar fluid. Environmentally, lightening can damage the controller.

 

Reliability studies have been conducted on solar water heating systems, but they have been limited by the lack of data available. Despite the lack of data, certain conclusions have been indicated. All mechanical systems follow a common reliability path that identifies when problems typically occur. Graphically, a curve demonstrates this where the curve is shaped like a bathtub. The following table comes from a solar water heating reliability report created by Sandia Labs under a grant from the US Department of Energy.

bathtubcurve

This graph shows that the greatest probability of a failure will occur at the startup and at the end of system or component life. The failure rate early in the device’s life is characterized by startup failures due to design flaws, faulty new equipment or components, installation errors, and misuse due to ignorance (yellow area). Once these initial problems are corrected the device enters its useful operational period where failures are due to chance occurrence (green area). Later, as the device and its components age, the failures begin to increase because the system is wearing out. Failures start to slowly creep in and eventually the system fails (red area). Because most solar collectors and piping systems can last well past the average life of a pump or other shorter life components, replacing the failed component can bring a failed system back to life.

This research shows the importance of post installation inspection or monitoring to overcome the potential startup failure.

Solar water heating systems have a unique situation where it is difficult to notice a system failure because there is always a full-size backup water heating system in place. In a water heating system using a conventional single water heater, if the system fails there is no hot water and the owner knows it immediately and can arrange for a service call. In the case of a solar water heating system that has a backup water heater, the owner may not know if the solar water heater is not functioning because the backup water heater will provide hot water. This situation shows how critically important it is that the solar water heating system be checked periodically. Owner involvement is mandatory and the system owner must be aware of this responsibility before the installation is started. If the owner is not willing to check the system at least monthly, then the sale should not take place unless a service contract is in place or unless some type of alarm is in place that would alert the owner of a system failure. It also shows that the installer should conduct a follow-up inspection within a reasonably short period of time after the system is commissioned to identify any startup failures.

Site Assessment For All System Types:

Harnessing the sun’s energy requires proper orientation and location of the solar collectors to maximize system performance, efficiency and ease of installation. A site analysis should be performed before purchasing equipment to ensure there is access to the southern sky without excessive shading and available space for the installation of the solar collectors, solar storage and drainback tanks, pumps or integrated pump stations and associated piping. Steps for an effective site analysis:

  • Try to have all decision makers present during the site assessment or the sales call.
  • Make sure the client understands what solar hot-water systems can and cannot do. Many potential system owners are enthusiastic about the prospect of owning a solar hot-water system but may not really understand the characteristics or limitations of this type of investment.
  • A south facing location for the collectors is ideal. A north facing location will not provide adequate access to the sun’s energy and are not suitable for locating the solar collectors. East and west facing roof locations may be used but will require tilt kits to orient the collectors towards the southern sky. Web sites with satellite imagery (such as Google Maps) can often be used to survey the orientation of the roof before a site visit.
  • The best horizontal orientation is achieved when the collectors are facing due south plus or minus 30°, this is often referred to as the azimuth angle.
  • The best vertical orientation for year-round applications is achieved when the collectors are tilted at an angle equal to the geographic latitude of the location. Tilt kits are available to achieve the optimal vertical angle. NOTE: Customers often prefer to have the solar collectors flush mounted to the roof for aesthetic reasons. Modern solar collectors are efficient enough that flush mounting to pitched roofs will still provide reasonable performance for domestic water heating. Therefore customer’s preferences should always be considered.
  • Placing the collectors as close as possible to the peak, less 3 feet provide clearance for maintenance,  on pitched roofs will make installation easier by providing increased attic access. Placing the collectors near the edge of the roof will make installation difficult since attic access is more restricted at this point. The attic space must be examined during the site analysis to confirm adequate space is available for installing the solar collectors in the proposed location. Be aware that the top 6 feet on the South side of the peak is known as the snow surcharge area (drifting).
  • The solar collectors should be located as close to the solar storage tank as possible to minimize heat loss in the piping runs, pump power and reduce installation cost.
  • The proposed location must have access to the southern sky with a minimum amount of shading between 9:00 AM and 3:00 PM each day throughout the year.
  • Determine the load:
  • Most residential clients have no idea how much hot water they actually use; where feasible, meter the hot water load for a month. Otherwise, do a load profile based on the ANSI/ASHRAE 90.2-2007 formula:
    • AGPD = [CW + SPA + B](NP)
      • Where:
        • AGPD = average gallons per day of hot water consumption
        • CW = 2.0 gal/day per person if a clothes washer is present in living unit, otherwise zero
        • SPA = 1.25 gal/person per day additional hot water use if a ‘spa-tub is present in living unit, otherwise zero
        • B = 13.2 gal/person
        • NP = number of people in living unit; if exact information is unknown, estimate as follows, where NSR = number of sleeping rooms:
          • (1.0)(NSR) for single-family detached and manufactured (mobile) homes with one to four sleeping rooms, plus (0.5)(NSR) for each sleeping room beyond four, or
          • (1.25)(NSR) for multifamily buildings with one to four sleeping rooms per dwelling unit, plus (0.5)(NSR) for each sleeping room beyond four
    • Inquire whether the household may bear any behaviors or activities that will consistently exceed or reduce the estimate based on the ASHRAE guidance.
    • Encourage the replacement of old appliances.
    • Document whether loads are consistent or intermittent by inquiring about vacation patterns or other absences in occupancy throughout the year.
    • On both residential and commercial systems, look for multiple loads that a single system can satisfy. If possible, try to find both winter and summer loads to satisfy so the system can provide heat all year round.
    • Do not install collectors on a bad roof.
  • If shingles are nearing the end of their useful life (curling, breaking, or significant loss of aggregate), the building should be reroofed before the collectors are installed.
  • When the site analysis is complete and it has been confirmed that the proposed location will provide adequate access to the sun’s energy and room to install the equipment sizing and equipment selection can be made.
  • Ensure the local codes regarding all mechanical components, particularly single wall or double wall heat exchanger requirements are understood before equipment is purchased. Order double wall heat exchanger systems if required by local codes.Typically propylene glycol systems don’t require double-wall heat exchanger (verify with local code official). Ethylene glycol systems always require a double-wall heat exchanger to potable water.
  • Use a site assessment tool to help determine the best place for the collectors:
  • Document the solar window by taking a digital photo of the site assessment tool. Provide a copy to the owner and keep a copy in your files.
  • Collectors can be oriented within 30 degrees of South with little difference in output.
  • Model system performance:
    • When using computer modeling tools, use the following parameters:
      • When shading occurs within the solar window, it is typically the case that the site’s shading occurs in the winter months. Do not recommend a space-heating component if that is the case. When shading is a concern, note that while nearly all heat is collected during the hours of 9 AM to 3 PM (solar time), a majority of the heat is actually collected between 10 AM to 2 PM. If this window is less than 10% shaded, it is considered a good site for a solar water-heating system.
      • Count branches of a deciduous tree at 50% shaded during the hours impacted if the shading occurs from October to March.
      • Pay attention to future tree growth horizons. Recommend to the owner that most types of trees should not be planted within 50 feet of the site.
  • If options are available, involve the client in deciding which sites are acceptable for collector placement. This will prevent misunderstandings about placement and last-minute changes to the pump size. If the site has very limited solar access, document the reasons for exact collector placement.
  • Don’t recommend a system if the site is more than 35% shaded. While most of the energy collected from any solar thermal system will be in the spring, summer and fall months, you want customers to be satisfied with their investment year-round. In case of summer uses (i.e. cabin, pool), winter shading can be ignored.
  • Document all optional pipe runs from collectors to the balance of the system.Document that there is room for the balance of the system.
    • If walls will be opened, document repair/carpentry costs.
    • Record measurements of stairs or door openings and determine whether they are large enough to allow tank placement.
  • Typical system design

    • Undersize rather than oversize:
      • Size the system to provide a maximum of 100% on best solar day. This sizing scheme results in systems that do not overheat as well as systems that have the highest possible return on investment (ROI).
    • Specify appropriate system type:
      • Consider drainback systems for intermittent loads or seasonal load types, if practical.
      • Consider pressurized glycol systems for systems that have pipe runs that cannot maintain a ¼” per foot slope back to the drainback tank and for ground mounted systems.
    • Typically, the area available for the collector array will determine the size of system, especially in commercial applications. Another space limitation, particularly for commercial installations, is the available room for the solar storage tanks and the balance of system components in the mechanical room.
    • If collector arrays will be in a saw tooth configuration, make sure the southern array will not shade the northern array. Note: A little shading when the sun is at its lowest angle will not seriously impact the performance of the system.
    • Systems that serve multiple loads typically have a better return on investment than single load applications.
    • Plan installation carefully so you have all components on site.

    Residential system design

    • System sizing: In order to qualify for the current federal tax credit, a residential system must be sized to cover half of the household’s domestic hot water load. This is the ideal maximum for solar hot-water systems without space or pool heating.
    • Space Heat: This option is very popular in cold climates. The collectors should be tilted to maximize the winter sun (location latitude plus  150). To minimize potential summer overheating, consider including a heat diversion circuit to dissipate unwanted heat when necessary, or recommend a drainback system.
    • Aesthetics: Many potential solar hot-water system owners would prefer that the collectors be flush mounted (parallel to the roof). While this practice will have only a small impact on the performance of the solar hot-water system in most climates, it is important that the prospective owner be aware that in a climate that experiences both a significant amount of annual snowfall plus experiences prolonged below freezing temperatures, there will be a reduction in overall system performance if the collectors are not tilted to an angle of at least 450. Production will be lost during the winter when daily production is at it’s lowest.
    • If the owner of a large house wants a solar hot-water system, but currently there are only 1-2 occupants, system sizing will depend on the future intentions of the owner. If the plan is to have children or to sell the home in the next few years, size the system slightly large and consider the following:
    • 1) Tilt the collectors to the winter angle.
    • 2) Oversize the storage tank.
    • Two-tank systems outperform one-tank systems in climates that experience extended cloudy periods.
    • All systems require a listed Thermostatic Mixing Valve (TMV) at the exit hot water outlet of the back-up heater.
    • If the back-up heater is on-demand, the TMV may be installed between the solar storage tank and the on-demand heater. Check with the water heater manufacturer to determine the maximum incoming water temperature allowed; and if necessary install the TMV between the storage  tank and the on-demand heater set the TMV at or below this temperature.
    • If the back-up water heater is an on-demand type, be sure that the on-demand heater will modulate to the “off” position if the incoming preheated water is already up to temperature.

    Non-residential system design

    • Never install an automatic water fill valve on pressurized glycol systems.
    • It is acceptable to use an a glycol fill system (injection pump) that injects a pre-mix of glycol into the solar loop if the pressure drops in that loop (sometimes called a glycol makeup system)..
    • Size the Heat Exchanger (HX) for a worst-case scenario with maximum possible water temperature and solar fluid temperature). To accommodate this worst case, the HX cannot be too big.
    • Install Pressure Relief Valve (PRV) in the mechanical room:
    • 1) Pipe the PRV to within 6” of the floor.
    • 2) Locate the PRV between the collectors and any isolation valves in the system.
    • 3) Size the PRV appropriately in relation to the maximum BTU output of the system.

    Components

    • Maximum flow rates for copper tubing:
      • Size the piping to maintain 5 feet of water column (head) per 100 feet of pipe. The following graph also shows the amount of heat that can be pushed through a pipe size at the identified flow rates and temperature rise.
    Pipe Size(in) Flow(gpm) Energy Delivered(BTUH @ 20°F temp rise)
    ½ 1.5 15,000
    ¾ 4 40,000
    1 8 80,000
    1 ¼ 14 140,000
    1 ½ 22 220,000
    2 47 470,000
    2 1/2 85 850,000
    3 130 1,300,000
    • Another method of pipe sizing is based on fluid velocity (between 2 and 5 feet/second) and head loss. The table below summarizes this method.
    Pipe Size(in) Flow Rate(gpm)
    1/2 1 – 3
    ¾ 3 – 7
    1 5 – 12
    1 ¼ 8 – 19
    1 ½ 11 – 28
    2 20 – 49
    2 ½ 31 – 76
    3 44 – 110
    4 78 – 296

     

    • Sizing with a flow rate greater than 5 feet Per second (undersizing the pipe) results in pipe erosion and requires excessive pumping energy.  This is important because it differs from the plumbing code.  Closed-loop piping with pumps and glycol is different than open-loop piping with water.
    • Sizing less than 2 feet per second (oversizing the pipe) results in excessive costs, the inability to move air through the piping (which is especially critical in drainback systems), and potentially a significant amount of heat loss through the pipe because its residence time is so high.
    • Sizing for head loss is also important because it determines the amount of pumping energy that will be required.  In space heating systems with radiant floor/sandbed loops, or in large commercial systems, going up one pipe size can, in some cases, save enough pumping energy to overcome the extra installation costs in just a few years. Oversizing in the case of planning for system expansion is justifiable.  In every other case, oversizing has to be done carefully.  The extra costs may often be overlooked.  It is not just additional cost in pipe, but it is also more costly labor, fittings, and hangers.  It carries over to larger insulation and jacketing, more solar fluid, larger expansion tanks, etc.  In commercial systems, the difference is many thousands of dollars.  And this is the cost that must be offset by the benefits: savings in pumping energy and flexibility for future expansion.
    • Add parallel lines together.
    • Pipes can be oversized but will increase the cost.
    • 8 gpm for a 1” header means the max number of panels linked together should be 8 to ensure 1 gpm per collector. The 8 limitation of maximum collectors linked together is also a function of manifold expansion and contraction. This applies to harp style absorber plate collectors. Connecting more than 8 four foot wide collectors can result in more expansion than the collectors can withstand without harming the absorber plates and possibly the collector frame as well. Refer to the collector manufacturer for specific information about this point.
    • Max of 4 collectors for ¾” header.
    • Long pipe runs may require expansion loops, L-bends, Z-bends or U-bends per 2008 ASHRAE HVAC systems and Equipment 45.11

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    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Thermal | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

    How We Financed a 13kW Solar Project on a Church in Massachusetts

    The following is a guest post from Fred Paris, the instructor of our Solar Installer Boot Camp. Fred tells the story of a church that he worked with, and how the members came together to finance the project for the church. This could provide a model for non-profit clients that you work with that really want solar. If anyone has any questions for Fred, please leave them in the comment section.

    If you’re new to the solar industry and need to learn how to market, sell, design and install projects, check out Fred’s NABCEP Solar Training.

    If you’re an experienced solar professional and need to learn more about financing commercial solar projects, I have a few resources for you.

    I’ve put some comments in [brackets]

    Enter Fred Paris

    A church wanted to install a 13kW PV system. Intuitively knowing that the $4,000 budget would never cover a system of this size; we went ahead and designed a 13kW system and agreed to test different ideas on how to pay for it.  The survey done, the system designed, and along with some structural reinforcement, the cost would be $65,000. [13kW at $65,000 gross installed cost is $5.00 per watt] We went in knowing the church would not qualify for the 30% federal tax credit or the state tax credit.  Using projections, we knew the system would generate more than a megawatt of energy a month and some $3000 a year in electricity in our 18¢ utility.  The project was presented to the congregation along with a financial plan showing the possible ROI available for a third part owner, if one could one be found.  We agreed to put a plan together.

    The plan was to form a for-profit LLC to buy and own the system.  Since profits from an LLC flow down to LLC members [the flows of profits and losses will depend on how you set up the operating agreements], those having tax liabilities would use the federal and state credits of more than $20,000.  The church would continue to pay a lower 14¢ monthly electric bill to the LLC, the LLC would get the SREC payments – we used a conservative projection of a couple hundred dollars a month, [I would use $175/MWh as the lowest effective value of SRECs in Massachusetts, read more about the impact of SREC assumptions on project IRRS here] – and would depreciate the PV system as an asset they own.  Recognizing the startup cost to setup the LLC, along with legal and insurance costs for the life of the arrangement, the financial breakeven for the LLC would be less than 8 years. [The financial break-even is when the Net Present Value goes from negative to positive]  Eight years later, the system is fully paid and the church stops paying the reduced 14¢ rate.  The LLC then votes to donate the system to the church – with perhaps another write-off, and the LLC is dissolved.  Everybody wins.

    We need to look beyond the financial dollar amount of PV incentives and consider value.  The same financial incentives can have more or less value depending on the owners’ tax and financial position.  The church’ tax situation was obvious, but there are many for-profit businesses that will not have a significant tax liability. You may want to explore setting up a single-purpose business entity to capitalize on the incentives.  Everybody can win.

    I asked Fred a few more questions about article

    1 – How much were the legal fees for setting up the LLC, PPA etc? Who did you use to do this? How did you make sure the documents were legit?

    Part of the group was a lawyer so he took care of all of the documantation. A simple LLC can be done for $1,000. However, this becomes more expensive and challenge when you have multiple investors because you need to establish clear operating rules for the LLC that explicitly say how the profits, losses, and credits of the LLC will flow.

    2 – How many church members were there? Did they each buy into the LLC evenly to make the operating agreement and flow of credits and cash simple?  

    There are 5 investors, and no, they did not invest evenly but using a simple percentage of investment equals percentage of SRECs or whatever – this works OK.

    3 – How long did the whole process take verus a cash sale? i.e. if it would have taken 4 months to do the project with a cash sales, how long did it take with the LLC?  

    Once the decision was made to go with the LLC, the project moved along at a good pace.  Creation of the LLC was not on the critical path - plenty of slack time.

    A Few More Notes and Thoughts about Fred’s Project

    1 – The investors didn’t want to make money, they wanted the church to save money. This is fundamental in the sales process, understanding what each party wants. If the investors had wanted 15% return over 8 years, the project likely would not have happened. What they wanted was an amazing way to donate to the church (because the church would save money) without loosing any money, because they got it all back!

    2 – Their legal fees were essentially free, because one of the church members was an attourney. If legal fees were $10,000. This would have increased the installed cost from $65,000 to $75,000, or from $5.00 per watt, to $5.76 per watt or a 15% increase.

    Here are the rough financial analysis for the project that Fred describers. Note, I did not take into account insurance costs, or sales tax, but I did take into account.

    If you want to use the same model I’m using, download the basic solar PV model here. If you need a really robust commercial solar PV model download it here. If you need to learn how to finance commercial solar projects, sign up for the Solar MBA.

    Here are the project assumptions. IRR = 11.50%.

    What happens if legal fees are $10,000?

    If the legal fees were not free, they would increase the installed cost from $5.00 per watt to $5.76, this would decrease the IRR from 11.50% (see above) to 8.73%.

    How do you determine when the partnership flips?

    In a partnership flip, the flow of cash flow changes when a specific party, typically investors, have received a certain IRR or a specific NPV on a number a years. In the case of the churn, the investors only want to make back with lets say a 4% return. If we set our discount rate to 4%, we then need to see when the net present value is equal to zero. We do this calculation by simply adding the present value of each years cash flows together. Here are the results. Notice how the “Cumulative NPV” goes from negative to positive in year 8?

     

    Posted in Financing, Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , , , , , , , | Leave a comment

    6 Trends Driving the Solar PV Industry in 2013

    The following is a review of the general trends that I’m seeing in the renewable energy industries, with a description of what they are, specific citations when needed,  and how these trends impact your business. I’ll be looking at the 3 forms of renewable energy that are most commonly used in residential applications, solar PV, solar thermal, and geothermal heat pumps.

    Our focus is on helping small and medium size business, working to arm them with the materials needed to beat the big guys. We want to make sure that Joe the Solar Installer can go head-to-head with SolarCity, and win.

    First, I’ll tackle solar PV and then address the other technologies in later posts.

    Trend #1 – Driving Down Customer Acquisition Costs 

    As hardware costs are getting cheaper and cheaper, acquiring customers is becoming more and more the bottleneck of a the business.

    A few interesting notes:

    • SolarCity spent 44% of revenue on customer acquisition in 2012. That means for every dollar in revenue collected, $.44 was spent on marketing and sales. Don’t do this.
    • A report by Berkley Laboratory released in December 2012 says that US installers pay on average $.67/watt acquiring customers, while our German counterparts spend $.07/watt.
    • What’s unclear in the report is whether these costs are higher or lower in a competitive market, where more installers exist but more homeowners know about solar, or a newer market, where few installers exist but there is less buzz.

    How does this impact your business?

    If you cannot acquire customers, and if you cannot acquire them cheaply enough you will not stay in business. It will be wise to understand what the average customer acquisition costs are in your area then understand what your customer acquisition costs are. If they are above the average, something should be changed.

    Trend #2 – Reducing Transaction Costs for Financing Light Commercial Projects.

    There is plenty of capital for thousands of residential solar projects, and megawatt projects, but less attention is being paid to the light commercial space, an area where there is huge demand and potential. How many commercial projects do you have in your pipeline that you could close if you could finance them?

    The investment in residential and MW projects has been led by institutional banks, they want to standardized the process and remove a significant amount of risk. The same has not happened for commercial solar projects.

    Why have commercial roofs not seen the same financing as residential projects?

    • Commercial projects in the built environment have more economic variables than residential projects. Every commercial roof is custom made, and vary greatly in terms of roofing and electrical equipment, compared with residential projects.
    • The due diligence required for a commercial project is only slightly less then megawatt projects, but the revenue potential for an individual project is much smaller.
    • For the above two reasons, it’s hard to put commercial projects into a standard due diligence process that each project can go through quickly and easily, each job tends to be custom from a legal and technical perspective.
    • For the above two reasons, the transactional costs of financing a commercial project by itself can be significant. The total legal and accounting costs for a project, or fund, might start around $40k – $100k. For this reason, it’s clear MW projects are the low hanging fruit. It’s easier to spend $100,000 on legal fees for a 4MW, $20 million project, then $50,000 in legal fees for a 100kW, $500,000 project.
    • Companies that are best suited to sell to commercial PV are companies that have existing relationships: think electrical shops, roofers, general contractors that have existing customers that own huge amounts roof space.
    • The investor profile for light commercial is different. Institutional banks are investing in MWs of solar at a time, while commercial investors tends to be buying into 1 or 2 projects at a time. Investors in commercial projects tend to be to be private investors, small corporations, or real estate holding companies with passive income. This can make finding the right investor much more difficult.
    • The contracts and risks are becoming more widely understood, and cheaper, which will reduce the cost to finance a project.
    • If you’re a solar business owner, executive or manager that needs to learn how to finance commercial solar projects, and you want to get $40,ooo of all the contracts need to finance a project, look into HeatSpring’s “Solar Executive MBA Training”, or download our free commercial solar PV.

    Are you positioned well and do you have the experience to sell commercial projects?

    • Are you positioned to sell to commercial clients? You answer will be yes if you have an existing book of business. If you’re having trouble getting interest from clients, you need to be more sophisticated in communicating the financial implications of a project.
    • If you’re serious about commercial solar, do you know how to value a project and screen a project quickly? Can you determine the profitable projects, for you and the client, quickly? hint – “payback” period has nothing to do with it.
    • Do you know the different legal structure that can be used to finance a project?
    • Do you know what tax efficient vs tax inefficient structures are and why an investor would select one structure over another?
    • Do you know how to write a compelling executive summary of the investment/project so the investor will be interested?
    • If you don’t answer yes to all of these questions, then selling, financing and finding an investor is going to be impossible or very, very difficult for you. In our Solar Executive MBA Training, we will provide you the information to answer all of the above questions, and provide access to mentors that have done what you want to do.

    Trend #3 – Big Banks Using Debt to Finance Residential Solar, Competing with 3rd Party Financiers

    There’s been a lot of buzz about 3rd party residential financiers in the past 4 years. Some think they’re the magic bullet, others not.  It’s impossible to predict. There’s one trend that is clear. Larger banks are getting interested and comfortable in solar – offering capital to homeowners that want to buy solar.

    There are pros and cons to everything, debt is attractive to homeowners for one large reason

    • Debt can still be no money down, but the homeowner will save more money from day 1 and eventually own the system.

    A few other notes:

    • There are two banks currently offering capital for residential property owners GE Capital and Admirals Bank
    • If you cannot find a good 3rd party financier to work with, and/or you tried working with one and didn’t like it – Try a bank.

    How this impacts your business?

    • By increasing the number of offerings, you increase your ability to sell to more clients. Some clients might demand 3rd party financing, while others want solar, don’t have the cash, but don’t want to finance.

    Trend #4 – General Contractors Are Flooding the Solar Market, Making it More Competitive for Pure Play Solar Installers

    There’s a battle going on the solar industry between general contractors and pure play solar installers. It’s true that the pure play solar guys, the ones that really loved the technology, kept the industry alive long enough to get policy in place that would increase growth, but it’s general contractors that are taking things to the next level.

    Just to be clear, when I say general contractor, I’m referring to a general, roofing or electrical contractor where solar accounts for no more than 50% of their business. Pure play solar installers derive 100% of their revenue from solar projects.

    It’s becoming clear that more and more general contractors are getting into the solar industry as fast as possible. It’s making life more difficult for pure play solar installers because property owners have so many options. This is a natural progression and it’s good for the industry, the key to both surviving is going to be positioning and focusing on their strength.

    Why are general contractors getting into the business?

    1. All the numbers prove it, it’s a huge growth industry.
    2. General contractor’s customers are asking about it. You may turn down a job 1,2,3, or even 4 jobs, but you’re not going to turn down 10, $30,000 jobs.

    What are the general contractors strengths and weaknesses that need to be addressed?

    1. Strength: they have lower customer acquisition costs because they have an existing book of business and can cross sell from other projects. “Already need a service upgrade or new wiring, have you ever considered solar?”
    2. Strength: They can turn down unprofitable jobs because they have other work to do.
    3.  Weakness: They need to get good at sales and marketing. In the solar industry, most customers don’t come to you, you need to go to them.

    How does this impact a pure play solar installation business?

    1. Double down on sales and marketing. Really understand your numbers and metrics in each sales funnel. You’re already better at this and it’s how you’re going to beat general contractors in the solar game.
    2. Double down on understanding the financial implications of investing in solar. Contractors tend to have to do a lot of learning about policy and financials, you’re already good at this. Make sure your sales team doesn’t use “payback”. Get lease and debt products if needed.
    3. Weakness: Keep your installed costs down. Use your volume.

    Solar PV Trend #5 – More Transparency and clarity in the SREC Markets will Reduce Risk

    2012 was a fun year for SREC markets, and by fun, I mean crazy and unclear. The industry is still trying to figure everything out.

    Notable 2012 Experiences:

    1. Prices close below the Massachusetts floor price. Everyone wonders, does the floor even exist? It appears the gold standard is no longer.
    2. Many people start to realize that SREC holders must pay taxes on their SREC income, decreasing the effective value of each REC. Learn more here, “Are SRECs Taxable?”
    3. New Jersey Increase their RPS requirement in an attempt to increase SREC prices.

    In 2013, I expect to see more stability and transparency around the SREC markets and here is why:

    1. As markets become larger, there will be less volatility. If the market is small and 10MW facility is put on line, that could oversupply the market, and prices will plunge overnight. As markets increases in size they will be less volatile because added supply will not impact them as much. The same 10MW coming online has much more impact in a market where only 100MW exists, compared to a market where 1,000 MW is online, all else equal.
    2. As more and more dollars get invested, more and more due diligence will be performed and things will become more clear.
    3. State and regulators will get better at communicating what is happening in the market.

    How does this impact your business?

    • More clarity and stability around SREC prices will remove risk for system owners, decrease risk will means more projects get build. If you’re in an SREC market, you need to be an SREC master. Make sure to study up, HeatSpring has a number of free courses that can help you.
    • If you need to become an SREC master, take the Free SREC Course: Understanding SRECs.

    Solar PV Trend #6 –  Lower Installed Costs

    Hard costs will continue to drop for the foreseeable future until the industry maximizing the economies of scale and becomes a true commodity.

    This is simple, but you can’t expect it. The relationship has been found that when manufacturing capacity doubles (increases by 100%), the costs of the equipment decreases by 20%.

    One of the things that lower manufacturing costs is doing is making manufacturers lose a lot of money. In 2013, expect to see a number of manufactures go out of business. Most manufacturers are losing money, and the only one that will be able to weather the storm are ones with huge amounts of cash in their balance sheets or ones able to raise outside capital.

    How does this help your business?

    • Decreased installed costs help the industry as a whole without helping a specific installer or distributor.  It will help the general industry by simply making the technology more available to consumers.
    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Leave a comment

    Solar PV Web Marketing Practices Needed to Beat SolarCity + the Big Guys

    It’s clear that the bottlenecks to the solar PV industry are become less and less technical (though technical challenges still exist), and more about more about finance, sales and marketings. What does this mean? The companies that are the best at finance, sales, and marketing will have the best chance to survive in the future.

    Here’s a few new marketing, sales, and finance resources.

    1. Free Commercial Solar PV Finance Model
    2. Website Optimization for Solar Companies Course
    3. How to Make More Money in the Solar Industry
    4. How Small Solar Companies Can Large Solar Installers with Deep Pockets
    5. How to Position Electrical Distributors for Growth

    The companies that have created sales and marketing machines will be able to maintain profitability against competition. The competition will be stiff and it will be David vs Goliath out there. The small solar companies vs the SolarCities of the world. I think the small guys have a chance, and I want you to win.

    A huge part of creating a marketing machine is having a well optimized website. Today’s guest post is by Peter Troast from Energy Circle Pro. If you’re super interested in optimizing your website, take our 3 week “Website Optimization for Solar Companies Course” for only $59. If you’re about to redesign or build your website, this course is perfect for you. Learn from a website optimization expert and use YOUR SITE in the class.

    Download the full article here.

    Internet Marketing Best Practices for Solar Companies

    4,000 word document on best practices for website creation and internet marketing for solar companies.

    Enter Peter Troast -

    Everybody knows that marketing is in the midst of massive upheaval. The rise of Online, the death of the Yellow Pages and most print advertising, the incredible growth in social media. Combine this with the fact that in the solar industry, large, national companies have piles of IPO cash and are spending money like drunken sailors to capture market share. All in all, it makes for a confusing soup. But, there is good news — in this fast changing environment, small, local solar companies that do it right are uniquely positioned to win.

    Benchmarking the Big Players

    At Energy Circle, we watch the tactics of these major players closely, and we see the following core tactics dominating the world of solar marketing. These are the programs that small, local competitors need to be aware of, and need to match if you’re going to win.

    Lease Financing — The concept of solar leasing has revolutionized the solar market. (Chris’s note: Leasing is nice, but it isn’t a magic bullet, SunRun recently got sued because customers were paying MORE for solar power then from the grid)

    Strong, Well Communicated Brands — Things like quality advertising, name recognition, and appearance of professionalism.

    Aggressive Inside Sales & Telemarketing — The big solar corporations boast multitudes of telemarketers whose job it is to conduct evaluations over the phone.

    Exceptional Websites with Tools and Calculators to Evaluate Solar Potential — All the national players have beautifully designed, highly functional websites that provide great user experiences.

    Robust Customer Referral Programs — SolarCity, for example, offers its customers $400 for successful referrals and has publicly stated that this is very successful (and, not surprisingly, a major part of their marketing expense.)

    Marketing is Changing. Duh.

    You don’t need to be an expert to know that the way contracting businesses acquire customers is in the midst of massive upheaval. In the past, we could rely on one or two tactics to drive the bulk of our leads–like the Yellow Pages or Direct Mail–but in today’s world the marketing “quiver” needs more arrows, and we’re lucky if any one approach amounts to more than about 20% of our leads. The bottom line is that we have to be good at a lot of things to win in this environment. And while this may sound intimidating and overwhelming at first, there is good news. The approaches that work today are less costly, require less commitment and, as a result, do not put your precious marketing dollars at risk of failure.

    The new world order is to try, test, measure and adjust.

    Success in today’s marketing world means using a range of tactics. At Energy Circle, we’ve found that in a typical marketing program, no one tactic delivers more than about 15% of your required leads. So, if you follow this math, you’ll need 6 or 7 different programs in order to accomplish your goals. Yet, it doesn’t have to be intimidating—using the new approaches is less committal than the old approaches, less costly and less risky.We won’t touch on each of these tactics, but here a few of the critical ones that we believe every solar business needs to do well in order to succeed.

    9 Tactics that Should be Part of Solar Marketing Plan                 

    Your Company Website

    Your website serves two core purposes:

    1. It is the first place most prospective customers will go to check you out (so it better not suck.)
    2. If setup well and maintained, it will be a permanent and ongoing source of leads by capturing people searching for solar in your community. (Chris’s Note: Your website should be optimized to turn visitors into 1) site visits and 2) subscribers that might become site visits in the future. That’s it!)

    Usability: To maximize potential, ensure that your website boasts a professional appearance. Additionally, it’s important to make a personal connection with the customer—this is where having a good “About Us” page, an explanation of your company’s philosophy or approach, and landing pages become important. After all, a customer might assume that a company who does their website halfway does the job halfway.

    The first rule of writing for the web is to keep in mind that people tend to scan content. Structure your pages with sections and headers to make the scanning process easy. Use the header settings on your content management system to highlight these sections and use your keywords in your headers. When a search engine robot scans a page, your headers are one way to signify that a particular term is more important than others.

    Ask yourself if your site has a clear Call to Action, or CTA, an invitational, non-intimidating reason for prospects to get in touch with you. The key metric to be thinking about on your site is how many visitors to your site (traffic) convert to a call or signup. In solar, many companies now offer a Free Solar Audit and with satellite mapping technology this can be done at the desktop. To a homeowner curious about their solar potential, that’s compelling.

    Great Content. The first step towards winning the battle for search traffic is to make sure your site is populated with content that matches those searches. Without a great page on “solar photovoltaics” you are unlikely to rank highly in search for that term. So it is critical to begin with a keyword strategy.

    Thanks to Google, data about which terms get more search is open, at your fingertips and costs nothing. Good web strategy begins with a clear understanding of the keyword landscape, and targeted content aimed at the search terms most relevant to your particular business strategy. Depending on your niche within the solar energy market you’ll want to identify which keywords drive the highest volume of search traffic for your services, and focus on those.

    Often, the data is surprising and not always intuitive. Check out the global search volume comparison between “solar pv” and “solar photovoltaics”. As you can see, “solar pv” is a much more searched-for term than “solar photovoltaics,” so as a general rule it would be a good idea to use “solar pv” in your on-page content more frequently than “solar photovoltaics.” Do a little research with the tools mentioned above to see how these terms compare with others. Because the concepts of the solar industry are not well understood by most homeowners, there is a mix of scientific and shorthand terms to consider. The term “solar photovoltaics” is the technical term but is outpaced in search by the phrase “solar pv” by a factor of almost 17. “Residential solar” might be the industry jargon but people are using “home solar” in their searches at a factor of 4 to 1. And you may think of yourself as a “solar installer” but if you use that term instead of “solar installation” you’d be missing out on almost double the search volume.

    Resist the temptation to “stuff ” your pages with too many keywords. If you’re overusing a keyword to the point of a page being awkward to read, you’re probably guilty of stuffing.

    While it is important to have a clear keyword focus, it’s equally critical that you have a clear strategy around the geographic service area you want to win. Whether by the user or the search engine, the search is likely to be “localized” to “solar pv, los angeles.” The challenge is that few of us concentrate our business in just one city or town––we have service areas––so we need to win in multiple places. There isn’t much to be done about the physical location of your company. That address is the primary one Google will use to “locate” you. List your address clearly on your Contact Us page and in your footer.

    Driving Lead Traffic

    While organic traffic—that which comes through winning search—is great, it is not going to fill your pipeline. It is very important that your marketing effort include active lead generation tactics. As the world of marketing continues to change at a stunning pace, your program needs to be diverse, flexible and highly measurable. Historically, contractors could rely on a couple of primary approaches—say a Yellow Pages program and some direct mail—to drive most leads. Today, unless you deploy door-to-door canvassers like SolarDirect, it’s very difficult to rely one particular approach to generate most of your leads.

    Additionally, your website plays a crucial role. Even if a prospective customer chooses to get in touch with you by phone, there’s a very strong likelihood that they decided to make that call after thoroughly checking you out on your website.

    Continue reading

    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , , | 1 Comment

    How to Position Electrical Distributors for Solar Growth

    The following is a guest post from our Solar instructor Fred Paris. Fred teaches our NABCEP Entry Level Solar Training. This is an excerpt from a talk Fred gave to an NAED national conference. If you’re a electrical contractor, or electrical distributor looking to optimize your solar website to generate more leads, check out our Website Optimization for Solar companies course.

    I’ve underlined a few critical points and added some color to Fred comments.

    Enter Fred Paris -

    Have we seen the current marketing conditions before?

    Occasionally, a new market opens and those in the best position to capitalize on the opportunity just look on as others carve out market share.  In the 80’s, the telephone companies watched as MCI, Sprint and others started carving up the long distance (LD) market.  Those same telephone companies are in the LD market today, but share the market with many LD carriers.  Licensed electrical contractors watched as low voltage contractors not only captured computer and telephone wiring, but also worked for and got new low voltage licenses approved.  With this legislation, they locked themselves to market share that electricians might have today.  IBM ignored the PC business until Apple and others proved the market.  IBM was focused on mainframes or making to PC mainframe comparisons.  Apple was at 50,000 feet, working an unfolding new market.  Yes, IBM is in the PC market today, but they will be sharing the pie with Apple and many others forever.  How long did it take the phone companies to offer television?  Yes, there were regulatory hurdles but it the beginning they did even think of it as their business.  They clearly did not have the high view.

    Today, electrical distributors contemplate the ‘green’ market and ask questions such as: ‘how much inventory will we need to carry?  What happens if we stock solar panels and there is a jump in technology?  These are clearly tactical questions.  Good questions if we were just adding another device on the line card; instead, we need to look at this ‘green’ opportunity from a higher altitude, see how things are moving and then work a strategy, stake a claim, and get a big share of this emerging market.

    The biggest opportunity for electrical distributors and contractors in more than 30 years is here – and it is Solar PV.  So when I ask electrical distributors and contractors about planning, I find many are waiting for some kind of sign – perhaps some cosmic message – before they jump into the market.  In the meantime, the market channels for Solar PV are solidifying around them with a completely new family of “solar-only” distributors.

    Why do we see solar firms from far off-states moving freely about the country working the regions with the best SREC programs (Chris’s Note: take our free SREC training, if you need to read up on SRECs) while our local contractors have little or no response?  What can local contractors and distributors do to at least play in this market, if not lock up their regional market?

    Electrical Distributors vs Pure Play Solar Distributors

    Lets look at the new guys.  Rather then depending on 14 brick-and-mortar branches, these new entities position as web-based supply for a narrow market segment, e.g., solar PV.  They invest in constant training (every-day) and have deep in-house technical support and professional staff.  The support staff gets involved in the nitty-gritty of a project with a contractor, helping the contractor close the deal, gain financing, and plan the construction process.  Since solar contractors are learning as fast as they can, they depend on this support.  When we think of on-line supply firms rational thinking says lower price.  Not always the case in a support intensive specialty.

    (Chris’s Note: Examples of “new guys” are: Alt E, Solar Distributors, Civic Solar)

    As the solar PV business expands from an early-adopter to early-majority market, distributors have an opportunity to become significant regional suppliers of complete solar PV systems.

    Continue reading

    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , | 2 Comments

    How Small Solar Companies Can “Out-market” Large Solar Installers with Deep Pockets with @SolarFred

    We need to make sure that small solar companies can compete, be profitable, and grow in the solar industry. This means effectively marketing and selling against large solar installers that have huge budgets. If you’re currently creating a solar sales strategy and business plan, I’d suggest reading Keith Cronin’s list of solar sales best practices. If you’re a electrical contractor, or electrical distributor looking to optimize your solar website to generate more leads, check out our Website Optimization for Solar companies course.

    Most people in the solar industry know Tor Valenza, known as SolarFred in the twitterverse. He runs UnThinkSolar.

    I reached out to Tor to get his perspective on a number of marketing challenges that HeatSpring solar students, alumni, and readers are asking about. I’ve found his answers to be extremely useful, blunt, and honest. His perspective will be able to answer help your business.

    Tor has a great perspective because he has worked extensively with both large companies (SolarCity) AND small companies (AEE Solar, SolarPowerRocks, 1BOG). Thus, his perspective on what small companies must do better is very useful because he knows what large companies do really well. If you want to read more of Tor’s perspective, you can view more of his articles on Renewable Energy World. If you have a question for Tor directly, we’ll be having a live Q+A on twitter on Friday at 12pm EST, we’ll be using the hashtag “solarQ+A”. I’ll be on @heatspring.

    Here’s the interview:

    What do the big solar companies (revenue >10million) do really well?

    In terms of marketing, the big solar companies in the residential space know how to throw a lot of money at the internet and cast a wide net toward anyone who’s ever put “solar” into a Google search. That may include real solar prospects, or people who put in the word for “solar system, ” meaning the planets. There’s no real mystery to this type of shot-gun marketing beyond the visual banner image and the call to action within the banner. Google and other ad networks allow you to target a particular zip code, income, gender, an key search words, so those choices also require expertise, but nothing creative.

    The other thing that the big companies have are no-money-down solar leasing/PPA materials. That’s very attractive to people today, given fears about depleting savings, tight credit, and underwater mortgages. With good graphics, basic finance information, and an online quoting system, the big companies have a website that is able to entice the visitors garnered from paid search engine marketing to inputting their contact info and get an official quote.

    Finally, the big players are also fairly good at referrals. Once again, they do well because they have the money to offer $500-$1000 for every sold system that is referred by anyone who signs up. While $500-$1000 may appear to be a lot, that’s less than their customer acquisition costs using their shotgun approach to internet marketing. If their acquisition costs per customer were less, they wouldn’t be offering that much as a referral commission. If the referral fee is more than their customer acquisition costs… then someone in accounting is in trouble.

    What are examples of small solar companies that are marketing as well as the big guys?

    My poster child for a small solar company that takes advantage of a small marketing budget is a company that I know in the L.A. area.  They have videos, but they also have a very active blog, Facebook, and Twitter presence. The blog is filled with useful information about solar technology and incentives in the greater Los Angeles area where he serves. As a result, I’m told he receives a lot of customer referrals and brand loyalty. This type of marketing is less expensive than shot-gun paid internet search marketing, but it does take time and effort to build a great reputation that leads to strong referrals.

    What tends to be the most valuable sales funnel that everyone tries?

    If you have the capital, then clearly search marketing works, as well as having a solar lease or solar PPA financing partner. Big and small companies can use search, but the more you spend, the more effective you’ll be, whether that’s on Facebook or Google paid search.

    Not sure you can call it a sales funnel, but having third party financing is increasingly important to converting leads. It’s always attractive to get something (cheaper utility bills via a solar PV system) for nothing (no-money down solar lease/ppa).  Regardless of whether you have marketing capital, customer referrals, whether incentivized or not, are the most valuable sales funnel. Motivate satisfied customers to recommend you to their friends, and the less you’ll need to spend on advertising. Your customers will do it for you and be far more influential than a Facebook or Google ad.

    What have you noticed is a very valuable sales funnel/marketing activities that not many people do?

    People don’t find enough co-marketing partners. Solar companies should look for partners that they genuinely support, and who also share your solar values. These opportunities don’t have to do anything with the environment or solar industry. For example, you could sponsor a little league team or the entire league. If you’re looking for families with homes, that’s a great way to brand yourself and plant the seed of solar in multiple neighborhoods. On top of buying their uniforms or equipment, or a billboard, offer discounts to any player’s family.

    What are the most common mistakes established solar companies (in the business more then 5 years) make?

    I think that’s going to be different for every business. Some companies are stronger in some marketing areas than others. That being said, many of these long-time pros don’t think about marketing their experience and “authority.” For any large purchase, people want to trust the brand. Saying that you have X number of installs on your website and other marketing materials shows that you have the experience to do a great, worry-free job. They can also provide info about what makes a good install and a poor one. That can inspire confidence that your system will work and that there will be no leaky roofs or failures. People will pay more for that higher level of experience and quality. You still have to be competitive with the less experienced installers, but if you highlight the difference between a bad install and a good one, many customers will feel that the cheaper ones will cost more in the long run, and go with an experienced installer

    Same question above for new companies, been in business less then 5 years.

    In general, younger solar companies don’t spend enough time marketing and building their referral networks. If you’re just starting out, then you’ve got to get your name out there, and you’ve got to find innovative ways to stand out and educate customers about solar and your particular service. Also, it’s important to have 1-stop financing partners that offer solar leases and/or solar PPAs or a set loan program, and to market this. For now, it’s an uphill battle to compete without a low-money down financing vehicle. If you’re not qualified to offer these programs because you don’t have enough installs, get qualified as soon as possible.  Beyond that, the more time you spend on building your authority through great customer service, honest testimonials, and photos/videos of successful installs, the more you’ll be trusted and stop the solar curious from seeking another quote.

    From a marketing perspective, what is the advantage of being small, what is it hard for big companies to replicate?

    The advantage of being small is that you can be as innovative as you want to be without committee interference. That applies to customer service, marketing, and the solar products you use. You don’t have to go through a committee to approve every ad and blog post or Twitter post. You just do it, try something new, and if it works, you repeat. If it doesn’t work, a small company can quickly try something else new without having to generate a report. Big companies have to go through a long approval process and just aren’t nimble when it comes to marketing, procurement, or any communication decision.

    If I had an existing established construction business and I wanted to get into solar and grow that section to 1 million in sales within 12 month, what is MUST?

    You must create a separate solar website and social networks. Right now, consumers want to go to a solar specialist, not a contracting generalist. The exception is when you’re already known as a green contractor that has a record for energy efficiency projects . The second must is to engage your existing/past customer base for leads and referrals. If you’ve built a house or redone a kitchen for someone, send them all a personal email or general e-newsletter talking about your new solar division, which is (hopefully) being run by a solar expert who has X many years in the field and done X number of installs. On top of that, you must have all the solar FAQs materials ready on your dedicated solar website.  Finally, you must have a referral incentive, as mentioned above, that is paid for every closed sale. Since you don’t yet know what your customer acquisition costs are for solar, mirror your competition’s offering.

    What is the most important aspect of solar PR and marketing that companies should focus on and be asking about, but don’t?

    To me, it really is all about effective, consistent communication with customers and the media. I think there are a lot of technically talented installers out there who are poor communicators. So, they should learn all they can about how to effectively use social networking tools and how to get attention through the press. However, there’s a difference between knowing how to mechanically use social media and to effectively use it. You have to know what you want to say and you have to say it creatively and with your own unique voice. The more companies focus on effective social media, the more good information will spread about your brand and the solar industry, degrading bad Solydnra publicity and long-time solar myths, such as it’s not affordable or that it needs batteries, which is not the case as long as most states have net metering.

    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , , , , | 2 Comments

    “Making More Money” in the Solar Industry. A Free Chapter from Solar Success Principles by Keith Cronin

    You may remember Keith, I did an interview with him about a year ago about “Lessons Learned From Selling A Solar Business to SunEdison”. Keith is also teaching an online solar sales training, that’s free for the next 2 months. Last year, Keith published a book called Solar Success Principles and I want to give you a free chapter. I asked Keith the number one question he always gets from other business owners, he replied, “that’s easy, how to make more money”. So, download Chapter 10, “Making More Money”, below.

    Since selling his company, Keith has focused on teaching, writing and consulting with other solar companies that are looking to grow rapidly. Why? He know’s exactly what a company needs to do to profitably scale a residential business and/or break into the commercial business, because he’s done it before.

    Here are what some of Keith’s students have said about him.

    Solar Executive MBA Course

    Keith is one of the instructors for HeatSpring’s Solar Executive MBA Course. If you’re interested in scaling a profitably solar company, getting into commercial sales, and getting all the financail models, contracts you need to finance a project (for far less than the $50k a lawyer would charge) and templates for pitching investors, apply to the course here. 

    Here’s what Jigar Shah, the founder of SunEdison has to say about Keith’s advice.

    “We are experiencing explosive growth in the solar industry, and just diving into this capital intensive business is precarious. This book will get you there safely with a simple and effective road map if you need to detour abruptly. Keith is the first person that I know of to describe the best practices for success from the ground up, from budget to sales and operations, in a clear and concise way that will allow you to take your business anywhere, including an exit strategy.” Jigar Shah—Founder, SunEdison

    Keith has recently published a book, Solar Success Principles (not an affiliate link). You can download a free chapter and see the full content of the book below.

    Download "Making More Money" A Free Chapter from Solar Success Principles

    Tell us a little more about you and your company and read away.
      Roughly, what were you solar PV sales last year?

    If you’re interested in buying the book, but want to know more about what is contain, here are all the chapter.

    • Introduction. 8
    • Chapter One 10

    • Solar Today: Trends and Patterns 10
    • What Has Really Changed in the Solar Industry?. 11
    • We Need to Talk About the Bad News as Well 11
    • Who Wins and Who Loses in This New World?. 13
    • So Why Is This?. 13
    • How Did I Figure All of This Out?. 14
    • Chapter Two. 16

    • How I Did It 16
    • Chapter Three 19

    • The Art and Science of Budgeting. 19
    • Chapter Four 21

    • How Many Hours Can You Sell 21
    • Chapter Five 24

    • Example Budget 24
    Posted in Financing, Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , , , , | 2 Comments

    Performance Based Contracting is the Future of the Residential Geothermal Business. Prove Me Wrong

    (Screen shot of the Ground Energy Support Geothermal Monitoring dashboard)
    Screen shot 2013-05-30 at 6.58.38 PM

    If you’re serious about geothermal, you need to be monitoring your projects in real time. Click here to buy a Ground Energy Support monitoring package. Note, I advise Ground Energy Support.

    This guest post was written by Matt Davis. Matt is on the ASTM thermal standards committee and is an expert at geothermal monitoring. His company, Ground Energy Support has logged more than 150,000 hours in real time data.

    Real time geothermal heat pump monitoring is about to the change the geothermal industry and in 5 years it will become standard practice in competitive markets like New England and the mid-Atlantic. The best 50% of firms will double their businesses and the bottom 50% of firms will stop installing geothermal because they won’t be able to compete. This is great news for the industry and I’m on a personal mission to make this happen as fast as possible. If your business is in the top 50% of geothermal firms and you design and install high quality geothermal systems, you should quickly get familiar with real time monitoring because it will allow you to increase your profit on jobs and increase your sales. Two months ago, I went to an LI Geo meeting, pitched one of the contractors on using real time monitoring with a performance based contract, and he responded, “that’s exactly what I need, I’m not going to lose a $45,000 geothermal job to a competitor for an $800 piece of equipment.” If you’re not in the top 50%, watch out ;)

    It will make your business more profitable in a few ways: 1) Increased customer satisfaction. 2) Work into a service agreement so that each sale brings in recurring revenue. 3) Increase sales by a) using other projects to show a potential clients during the sales process and b) offering a performance based contract to win any and all bids from competing geothermal companies that do not feel confident enough the in quality of their design and installation to GUARANTEE its performance.

    To get familiar with real time geothermal technology, how it works, the difference between monitoring, measuring and metering, download “The Current State of Geothermal Monitoring”, published by Ground Energy Support and HeatSpring. I’m an advisor to Ground Energy Support.

    Here’s what the Geothermal Monitoring Whitepaper will address

    1. The difference between geothermal monitoring, measuring, and metering
    2. Data collection
    3. Calculation of the geoexchange with the ground loop
    4. Modeling with system specifications
    5. Deciding on the best measurement method based on goals, budget and accuracy requirements
    6. Data analysis. How to interpret the data
    7. Most common system performance issues with the geothermal heat pump operation, design and source side issues

    Download the Real Time Geothermal Monitoring Whitepaper

    Give us a few pieces of information and download the whitepaper that provides an in-depth review of the current state of geothermal monitoring.
    • The guide will be sent to this email.

    There are several trends that will make real time monitoring standard practice within 5 years.

    1. Historical precedence with the solar PV industry.
    2. Public policy is pushing towards performance based incentives.
    3. Monitoring addresses and solves HUGE problems that our industry faces
    4. Monitoring also addresses the top issues that homeowners have when looking to purchase geothermal and AFTER they have purchased a product. Addressing these issues will allow you to 1) increase sales by addressing client concerns and 2) increase referral business by increasing customer satisfaction.
    5. Monitoring can be added to your existing O+M contracts
    6. Use monitoring to structure a performance based contract.

    Now, I’ll discuss each of these items in more depth.

    1. Historical precedence in the solar PV industry

    In the early 2000s very few solar PV projects in California had monitoring on them. Why? The technology was too expensive, and it was not required because the majority of state incentives were based on cash rebates. Forward that to today, well over 95% of residential projects in California are monitored. Why? First, the incentives are based on the performance of the system, so they must be monitored. Second, financers are guaranteeing production amounts which must be proven with monitoring. This will be happening in the geothermal industry.

    2. Public policy is pushing towards performance based incentives

    Even if you don’t want to install real time monitoring, you may not have a choice, as more and more states are looking at production based incentives for renewable thermal technologies.

    New Hampshire is leading the country in this effort and is currently working on establishing the rules and guidelines for implementing a law in 2013 that was passed in early 2012. You can read more about the New Hampshire program here.

    1. State by State Comparison of Geothermal Heat Pump Legislation
    2. US States Heating up to Renewable Thermal Heating and Cooling

    Maryland has passed some legislation, and Massachusetts is looking to address renewable thermal technologies as well as Vermont. For Massachusetts and Vermont, it’s currently unclear how they will incent renewable thermal technologies, however they incentivize solar pv and wind on a production level, so my guess is that they’re pushing this way with renewable thermal technologies as well.

    Continue reading

    Posted in Featured Designs, Products, and Suppliers, Geothermal and Solar Design and Installation Tips, Geothermal Heat Pumps, Solar and Geothermal Sales and Marketing Tips | Tagged , , , , | 5 Comments

    The OPEN PV Project: See Real Time Solar PV Installations from 2000 to 2012 and More Cool Info

    I just stumbled upon The Open PV Project that was compiled by NREL.

    It provides some cool vanity metrics, like a PV map of solar PV installations from 2000 to 2012, and so some very useful state by state market data that can be used for market research. You can also submit your projects to the database, which I would encourage you to do.

     

    The Project Has a number of cool functions.

    1. “The Market Mapper” Get nationwide and state by state information on the number of installations and costs per year, the number of installations based on system size. Very useful for market research and it’s all displayed in graphs.

    2. “Installations Over Time”

    This maps shows the number of installations in the entire US from 2000 to 2012. The map is fun to watch and shows the impact that state policy has on the adoption of solar.

    3. “Project Contributors” The Open PV Project is based on submissions from contractors and other agencies to submit their projects. The project contributors sections allows you to see the companies that are submitting data and also for your company to submit projects.

    4. State Rankings. The state ranking table is an simple and interactive table that displays state ranking based on installed capacity and installed cost.

    5. Utility Scale PV. The last tab just deals with utility scale projects in the US.

     

     

     

     

    Posted in Solar and Geothermal Sales and Marketing Tips, Solar Photovoltaics | Tagged , , , , , | Leave a comment