As an industry, residential solar installation companies have seen varying success, but it’s clear that the ones that have been successful have been able to convey a clear message that resonates with consumers.
Kelcy Pegler Jr. is co-founder and CEO of Roof Diagnostics Solar (RDS), an industry leading residential solar sales and installation company, and one of Solar Power World’s Top 250 Solar Contractors. With more than 400 employees in New Jersey, Massachusetts and New York, RDS has helped bring cost-competitive clean energy to more than 5,000 homeowners. You can see other posts from the Roof Diagnostics Solar at their blog here.
Kelcy Pegler Jr., Co-Founder/CEO Roof Diagnostics Solar
By Kelcy Pegler Jr., Solar Power World Contributor
As a result of effective state policies that incent development, U.S. solar PV is on track to have another record breaking year. According to the most recent Solar Market Insights report from the Solar Energy Industries Association, residential solar has particularly seen significant growth. As an industry, residential solar installation companies have seen varying success, but it’s clear that the ones that have been successful have been able to convey a clear message that resonates with consumers.
Although many homeowners have embraced solar energy, for some it can be a daunting decision as they have no previous experience with a solar energy system. The major point of focus has been educating consumers on the benefits of solar and pulling them away from their comfortable relationships with traditional utilities. When we started to make the jump into residential solar, we focused our business strategy on two key questions: How do you choose your electric company? How much will your electric cost 5 years from now? The answers were consistently based on cost, service and variability of rates.
While solar was the conduit, our business model focused on energy solutions and the opportunity to lock in long term energy rates with minimal upfront costs. We discovered immediately: this was a message that resonated. As a result, we focused our business model on the sale of energy rather than the complexities of a solar system. To the average consumer, the details behind energy generation and clean technology are less important than what it means for their monthly electricity bill. While clean and renewable energy is a bonus, the top selling point is consistently cost.
The residential solar industry has also benefitted significantly from third-party leasing. Solar energy systems are an excellent candidate for leasing. Many homeowners don’t really want to own and maintain an energy system. They just want clean and affordable energy. Although solar energy systems are reliable, they do require some maintenance to keep them optimized. Combined with the fact that many homeowners are unfamiliar with solar energy, the option to lower their energy bills and have future price stability without having to worry about maintenance of fixing something if it breaks is appealing.
The decision to lease or own depends and many things including the product being purchased, interests rates if you need to borrow, and the willingness of the consumer to handle maintenance and defect problems. For newer, less-well-understood products, many consumers are comfortable with leasing. This is also true of products that require regular maintenance such as copy machines.
Leasing is also evolving to the point where the transaction essentially changes from buying a product to buying a service. In the carpet industry, companies understand that office managers or building owners don’t really want to own carpet — they just want nice floor coverings. This led to leasing options and the development of modular carpets where high traffic areas could be replaced more cheaply. Since the carpet companies now bore the expense, they realized it was cheaper to be able to replace smaller sections and developed systems to do it. In turn, this lowers the overall costs for consumers.
In many ways we are seeing the same developments with energy purchasing. The residential solar business model that focuses on a combination of leasing, price stability and reduced maintenance costs is driving explosive growth for many solar companies throughout the country.
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