If you’re currently a contractor and interested in entering or expanding your business into the renewable energy industry, there are four main hurdles you will face.
- Understanding the technology. See this free course to learn more about the technology basics.
- Filling out a vast amount of government paperwork, and maneuvering around solar and geothermal permitting and incentives.
- Marketing: Getting the attention of potential customers to sign your first project. Here are some tips on bringing customers to you.
- Sales: Needing to convince property owner to purchase geothermal or solar AND buy them from you.
Today, lets focus on number four. Like it or not, investing in renewable energy is NOT something that property owners MUST do, and they have other options to choose from. With that in mind, having good sales skills is key to convincing a potential customer that investing in renewable energy will be both profitable and attractive for their home or business. So, you must convince them to invest into solar pv, geothermal, solar thermal or energy efficiency and then convince them to pick YOU as the contractor.
Andy Black from On Grid Solar has some good insights into avoiding costly mistakes when selling solar, but lets focus on creating a solid sales proposal. Let’s say you’ve completed a site visit, gathered the information you need to qualify the customer and to complete the initial design, and now it’s time to present the sales proposal to the homeowner.
Here are five key items to include in a good proposal:
1) Write a quick summary of the work to be completed and financials that will be calculated. Describe what the work will entail, the type of equipment that will be used, and general time-lines of how long the work will take. Along with the internal rate of return (IRR), include these cost figures:
- How much they will save over the life of the system.
- How much the system will cost them.
- How much government money will they get.
- This is most important, the cost of doing nothing. Just made a graph of all the money they will loose if they don’t invest.
- If you can, leave out “payback years”. It’s a term that’s not very useful in comparing renewables to other investment. Most people will be shocked to see a 7 year back back. But a 10% yield on an investment doubles in 7 years, that is actually an amazing return.
2) The customer wants to know that you’re credible and can complete the job. If you have it, show any credentials and evidence of past projects that have been completed in this industry by providing pictures and the contact information of referrals. Even if this is your first job, feel free to share anything that will increase their trust in your ability to finish the project. Display work that you’ve previously done in another trade.
3) Everyone leads busy lives, so to make it easier on an interested customer, make sure it’s clear what they need to do next and what you, the contractor, will do next. Make a list of specific next steps. How should the customer prepare? Will they need to contact anyone else or track down the appropriate paperwork? How long is the contract good for? If they sign it, what will happen next?
4) Last, include some financial graphs. One of the main obstacles in selling renewable projects is the upfront investment. On the first page of the sales contract, you put some basic financial numbers, but now you should get more in-depth. During the initial site visit, make sure to figure out how the customer plans on paying for the system. Will it be financed or paid in cash? Use this information to display financial graphs and a schedule of when payments are expected.
5) Change Order: It is very important to include a change order, similar to all construction based companies. There is only so much information you can collect during a site visit. Once the installation starts, you may need to upgrade the roof structurally or part of the electrical service. Make sure to mention this to the customer and be clear about it.
Throughout writing, remember what’s in the customer’s mind when they’re thinking about signing a contract:
1) Will the technology work?
2) Is this going to be a huge hassle?
3) How much will it cost?
4) Is it going to mess up my house?
Chris,
Having just started selling PV, i find your points very helpful and glad i was already doing most of them. The point about showing potential customers how much it will cost to NOT do the project is definitely something i’m going to ad in – brilliant! What figures would you crunch to create that. The links are here are great also, much thanks.
jo
You would take the amount they currently pay in utilities bills, add the inflation rate per year and graph it out for the next 20 years.
So for example if they paid $100 in electricity every year the excel equation would look something like this.
$100 spent on electricity= x
year 1= x
year 2= year 1 value + (x*inflation rate)
year 3= year 2 value + (x*inflation rate*inflation rate)
And so on and so on…..