« Back to Home Page

Solar Salesmen Face Long Odds in Sealing the Deal

| Friday May 14th, 2010 | 3 Comments

Ten to one. That is the ratio of people who contact solar installers interested in putting panels on their roofs, versus those who actually end up doing so, according to industry executives.

That statistic goes a long way towards explaining why, for example, California’s three year old Million Rooftops initiative is still approximately 950,000 roofs short.

And while the pace of solar installations has picked up in the last year, especially in California, that growth hasn’t changed the 10 to 1 “closing ratio” as it’s known in sales-speak.

The number one reason? The shockingly high price of panels.

“People call and say ‘How much does it cost? Like replacing a refrigerator?'” said Lyndon Rive, CEO of SolarCity, the top residential installer in the country.

A bit more, actually: a typical system starts around $20,000, even after federal and local rebates. 

While a system will pay for itself eventually, if a potential buyer has a relatively small electric bill, the trickle of savings involved may not justify the upfront expense.

The problem is that for 80-90 percent of those interested in solar the motivation is financial, according to Rive. But once they see how little they will save, those just looking to save money drop out. “The only motivated customers are where savings is secondary — only they end up going solar,” Rive said.

That motivation differs with geography. On the West Coast, the farther north you go the more knowledgeable people are about solar, and the more interested they are in the environmental benefits, according to Matt Ziskin, director of marketing for Sunwize, which has been in business since 1992.

“In Southern California it’s much more of an economic sale, people want to look at the ROI,” said Ziskin. “In the San Francisco area there’s this sense of more of the environmental aspect, doing something for the planet. Up in Oregon even more so.”

But motivation is not the only factor. Of those still interested in panels after hearing an estimate, another 20-30 percent may not be able to install panels because of the location or design of their house.

The roof with the panels ideally should be facing south, said Ziskin. North is out of the question (in this hemisphere) and while east and west are do-able, the panels will generate less power, which means less savings on the electric bill, and thus a longer return on investment.

A single big tree can also kill solar dreams. “I’d say the number one reason for homes not qualifying is shade,” said Rive.

The obstacles to getting to yes, both financial and physical, have pushed solar companies to innovate. Many companies now offer a solar lease program, pioneeredby SolarCity, whereby the customer leases their rooftop to the solar company. The company owns the panels and the homeowner gets a guaranteed low electricity bill.

Another solution is to try and streamline the entire process. Oakland-based Sungevity, which also offers a lease, has come up with a web-based program that automatically determines a house’s solar suitability using aerial photography.

Danny Kennedy, Sungevity’s CEO, said they can provide potential customers with an estimate within hours of them filling out an online form. “It removes the need to go out there with a truck,” he said. “We can do it from space instead.”

Still, solar salesmen will have their work cut out for them for the foreseeable future. A drop in panel prices over the last year has drawn an increase in customers, but none of the executives interviewed expect those steep declines to continue, and Rive thinks the price of installation may actually rise this year as government rebates dry up.

Said Rive, “the main message I tell to a home owner is the best time to go solar is now.”


▼▼▼      3 Comments     ▼▼▼

Newsletter Signup
  • http://twitter.com/tedkidd Ted Kidd

    People getting solar who have not first audited their homes are either misguided, or more interested in appearing green then truely being green. It is widely accepted fact that $ per $, much more of an environmental impact can be made using caulk than with a solar panel, even in most brand new homes.

    For example, if $100 worth of weatherization saves $10 worth of energy and $100 worth of panels produces $2 worth of energy, which has the greater benefit to the environment? A comprehensive home assessment will tell if solar is the homeowners “greenest” option or not.

    Buying solar through some process that does not include such an assessment is the act of possibly well meaning but misguided/underinformed people and green posers.

    • TedKidd

      A lot can change in 4 years. Panel prices have gone through the floor, and production certainty is quite high. Certainty/predictability of EE savings has no accountability, and as such is as variable as fingerprints.

      While it’s wise to determine size of your EE opportunity, keep in mind the outcome of solar has much less risk/variance.

  • http://twitter.com/tedkidd Ted Kidd

    People getting solar who have not first audited their homes are either misguided, or more interested in appearing green then truely being green. It is widely accepted fact that $ per $, much more of an environmental impact can be made using caulk than with a solar panel, even in most brand new homes.

    For example, if $100 worth of weatherization saves $10 worth of energy and $100 worth of panels produces $2 worth of energy, which has the greater benefit to the environment? A comprehensive home assessment will tell if solar is the homeowners “greenest” option or not.

    Buying solar through some process that does not include such an assessment is the act of possibly well meaning but misguided/underinformed people, and green posers.