This is the transcript for How to better your solar business. Click here to watch on demand.
Kathy:
Hi everyone. I am Kathy Zippe, managing editor of Solar Power World Magazine and I would like to welcome you to today’s webinar How to Better Your Solar Business. Thanks so much for tuning in. Before we begin, we have a few housekeeping items as usual, but you also may have noticed we have a new webinar platform, a little bit more flexible design. You can move boxes around and change your size is if you like and as usual, the webinar will be available after the presentation on Solarpowerworldonline.com.
We also always email it to registrants so you will be able to view it again at your convenience. You are also able to sign the webinar slides in the resource box on your right and you can download those at any time. There will be a question and answer session as always at the end of the presentation. We encourage you to participate. You can do so by submitting your questions anytime, just type them into the Q&A box, which is on the bottom left of your screen. We will also have some pool questions during one of our presenter’s slides and that would just pop up on your screen and you are welcome to participate in that as well if you would like. Lastly, we do encourage everyone to tweet along with me about key topics and takeaways. You can use the Twitter #Solarwebinar.
I will go ahead and introduce our presenters. Today we have a great panel to offer some good ideas about how to better your business from software to project financing and working with customers. On this panel we have Deep Chakrabotry, CEO of Enact Systems. We have Bob Giles, CEO of Pacefunding and Jim Jenal, founder and CEO of Run on Sun. We are excited to have all of you here to share your expertise.
First off will be Deep. Deep is currently leading Enact Systems, an award-winning cloud platform, which he co-founded in 2013. Prior to Enact, Deep was CEO of [Centra Solar’s 00:02:20] North American PV Business, which he also co-founded in 2009. Here he has pioneered a unique business model for sales, financing and distribution of complete packaged PV systems, configured on a unique software platform and serviced by a dealer network in 20 states. Deep has a Masters degree in engineering from Penn State University and an MBA in strategy and finance from the University of Michigan at Ann Arbor, so he is more than qualified to tell us about some great innovative software that can help you streamline your business. Deep, go ahead whenever you are ready.
Deep:
Thanks Kathy and welcome everyone. Enact Systems, we are a software company focused on energy and distributing energy, including solar energy. All we focus on right now which is a very exciting space to be in. As we all know, I have been in this space for almost a decade now the numbers are fascinating in terms of the growth, the staggering growth behind us and with the tax credit now standard for the next five years. We expect this to be a $30 billion market just in the US by 2020. That’s the good news.
On the right-hand side, we have some not so good news. Here’s a chart basically a quick check on hard costs versus soft costs. It looks like soft costs still stack up to be close to 60% of the typical residential projects. The number is similar for commercial projects as well. The customer acquisition financing, the operations installation and servicing of these projects makes up the majority of these total installed costs and the lifetime cost of these assets, including 20 years of maintenance. Therefore, it’s close to 80% soft costs. It’s really a lot of human effort to make these things work. That’s a challenge, which Enact has been focusing on for the last three years and we have one a couple of awards from the Sun Shot Program as well to improve and attack this problem and help solar companies tailor their services businesses.
If you look deeper, how do you improve your business when it’s so soft cost-heavy? You have five legs, starting with customer management, the analytics. Every project has energy analytics and financing analytics. We have listed some of these steps that installing companies go through to size a project, to get to the saving estimates and then contract with the fund as most of these projects are financed, especially on the residential side. Then eventually get these projects installed and constructed an event serviced.
The steps are quite a few, close to 50 steps for a project, whether it’s a small residential or a large commercial. That’s where Enact specializes on in terms of automating all of these steps on the cloud. Today, I just want to focus on some of the pain points and how for each one of them, we make a difference. Of course, customer management starts with CRM. We find CRM, like Salesforce exists and we asked the plug it into Salesforce if customers love Salesforce and want to stick with it or we have our own CRM that can layer on. That helps manage leads, create reporting, develop workflows, which is the beginning of everything when you start a scalable business.
As you get deeper into it, the next step beyond customer management and CRM is actual design. Software helps on streamlining design choices, whether it’s residential or commercial roofs or ground mounds or parking lots, you can select high resolution images. You can even lay panels on the roof or the ground and size up the system quickly, look at production of the solar system De-rates and so on. As a platform, we also open to design tools. There are some exciting tools that are coming on for shady, for tree heights, for complex inverter stream sizing.
Enact is actually partnering with other software companies and tools to make it easier for installing and services companies to grow their business and add on the tools like on the design page. That’s a key part of the process. Then once you have sized the system and have already worked through your utility rates and kilowatt hours and demand charges, the most important piece for most companies is to predict savings and calculate that reasonably accurately. The good news is that this is a growing business where there is no regulation or compliance yet for predicting the savings. Yet, we are on top of accuracy. We know it’s very important for customers to do exactly how their savings are coming from and looking at the detail when they need to. Enact platforms simply find those choices for a customer, but also making it easy for the installing and sales professionals to come up with the numbers quickly on the screens for the customers.
Financing analytics is a key driver for solar growth going forward as we moved here later from Bob on Pace, which is a big driver of a lot of residential financing. It’s a new mechanism and it’s different than loans and also different from PPAs. The questions often come up for customers as well as sales professionals why are they different? What are the advantages for a homeowner or business owner to compare versus the other? Also, is there a benefit for a landlord versus a tenant and how are the returns different? That’s the complexity where software helps streamline your sales process.
Traditionally, installing companies have had to go to different portals or different websites for different loans. It makes it hard to scale your sales teams in many regions or states. Enact simplifies that by having APIs to different lenders on the same software and you can pull in your local credit union and pull in a Pace option and have it all on one platform tied to the end to end nature of the business. That’s a key part of our focus as well, simplifying the financing process and not just kidding the quotes, but also getting the documents, docu signs and all the simple steps that make a powerful.
Last but not least is operations. Enact has one Sun Shot Awards now to automate two different pieces of the business, first of course, on the proposing sales side, but also now on the construction of these projects. You have an end to end operations platform that helps businesses design their workflow, which is unique to their business. They can have all their contracts and documents uploaded electronically and set up for electronic signing. They can design workflows for outsourced construction teams versus in-house and create very simple handoffs, where all the company team members know exactly who is working on which project. They can communicate. They can share notes and they can transfer ownership of projects. They can also have alerts and notifications set up, so that you know when a site survey is due before it’s due and also have automation around that. It creates very easy reporting.
It helps companies scale, reduces phone calls and text messages and panic alerts. It streamlines the business in terms of scale and growth, which is much needed, especially in the residential side which is growing rapidly. Operations tied to financing and proposals, along with asset servicing for fleets and large portfolios, ties in what we described as an end to end software platform for this space.
To end my piece, I would just like to mention we strongly believe the need for software. We believe software can help scale companies and end to end, all these different steps of the process on one platform, talking to all the stakeholders is where we can get operational savings. As a platform, as a software company, we are ourselves are talking to our technology partners like Salesforce, like Google for images, like DocuSign, even Intuit for QuickBooks, we actually API into QuickBooks for accounting needs and many others like Green Button for energy data. The platform as a service is live. It is talking to other technology providers. It is constantly innovating so that your business is easier, so you don’t have to do all of that. You can start off from day one and benefit from all the hard work we have done Kathy, with that, I am open to any questions on this topic or for the next speaker.
Kathy:
Thank you so much Deep. It’s very interesting, really impressive what your program is able to do. Thank you for that great insight and as you said Bob will present next. Bob brings more than 25 years of experience in public finance, banking and solar PV sales, channel management and finance. Bob was the founder and CEO of Ready Solar, which he sold to Sun Edison in 2010. Ready Solar was the first company to privatize residential solar systems to allow HVAC and roofing and electrical trade contractors, as well as home-improvement channels to other residential solar businesses. Bob received his MBA from the University of Southern California and he is going to tell us more about Pace financing, so Bob feel free to begin whenever you are ready.
Bob:
Thank you for that introduction and I should mention I am an ex-municipal bond guy, having spent about 18 years at Bank of America and Solar Finance guy, having spent some time with Sun Edison on their residential financing platform years ago. I am now CEO of Pacefunding. We are not a very imaginative name, but we wanted to make it super easy for everybody to understand what we do, which is we are a full-service Pace program provider. We are trying to enable a variety of partners to be able to provide Pace financing to your customers.
Maybe the first thing to do is start off with some basics and for those who have already used Pace, I will try to get through this quickly. What is Pace? It’s a new form of a loan type of product to finance energy efficiency and renewable energy. The key is the product needs to qualify as reducing energy costs, so solar is easy to qualify. Basically anything that qualifies is eligible under CSI is eligible and so virtually all your entire system is qualified, the panels, inverters, racking and labor, it’s all included, so it’s an easy qualification for solar.
The big differentiator versus other financing products available for solar is the repayment is tied to property taxes. There is an actual assessment or a lien that is placed on the property. It’s actually a line item on your property tax bill and so it’s paid at the time you make your property tax payments. But an assessment requires municipal approval. It’s not something we can do as a private sector company and so we need to get the approvals of the counties and actually even the cities, counties having the authority to levy property taxes. We also need a municipal partner to be an issuer for bond financing. This is actually an old form. Pace is an old form of assessment bond financing. It’s been around for decades, many billions of dollars of assessment bond financing have been issued, so don’t worry about this part, but the short of it is it provides fast payment to your contractors and that’s all you guys care about.
There is actually 200 plus of you on the line here. What a great turnout. I wish I could get a sense for who you all are to help tell the rest of my presentation. One of the questions I would love to know is how many of you currently do residential? The reason I ask that question is for us at Pace with funding that’s what we are focused on. Let me give you a little bit of a background for where Pace is being offered. There are 32 states that have classified some of four of enabling legislation. I’m sorry. I think I have hopped ahead here. It looks like there is a question, which you can easily answer in terms of do you sell or install residential solar? If you could just answer that quickly and submit it, I would much appreciate that.
There is a couple of other questions that have come up through the rest of the presentation and that will give us a sense for who you are and we can follow up if there is interest on your side. The results are already in. This is a pretty cool tool. 79% of you do install some form of residential solar, thank you for that. That’s good to know, so this is a great audience for a Pace presentation, which is where the bulk of Pace is being done.
I start off saying there are 32 states that have passed some form of enabling legislation. More than half have done some form of Pace deal, but mostly it has been commercial because the way the legislation is written in most of the states, it requires getting some sort of bank consent. That’s why the volume for commercial is relatively low right now, whereas residential you don’t need to get consent, so that’s why 95% of all Pace financing has been residential. Interestingly, only California has opened up residential. That’s where that volume has been done. Today there has been over $1.5 billion in residential Pace done in California, representing 75,000 homes. It’s increasingly popular. I will show you the segment of the market that is using it the most, where it’s a good fit for them relative to their other financing options.
I would just say other states are now planning based on the success of California where there have been very few defaults to date to open up residential. I will mention Florida and New York in particular. Then there is a whole handful of other states that are looking opening up residential in the near future. We just had the first annual Summit conference for the Pace industry put on by Pace Nation. You might want to take a look at their website, Pacenation.com, about a month ago. I would say there are 15 states all looking how to figure out how to do residential.
I guess it’s time for another question. I would love to know how many of your leads you generate have FICOs below 650? I will tell you why this important, most of you probably already know. Is it less than 50% or something more than 15%? If you could answer that now and press submit, I will tell you what everybody thinks. The results are coming in. This is pretty cool, polling. It looks like it’s 50-50 exactly, very interesting. The reason I ask as I segue to the next slide is all love you generate a variety of different types of leads, basically divided into high FICOs and low FICOs. For solar finance customers and I would just mentioned solar PPA companies right now looking for high FICO leads, there is no opportunity for Pace in a monthly PPA. But where there is an opportunity for those of you that are using solar leasing companies, PPA companies, where there is an opportunity for pre-paids.
You can use Pace financing as the form of the prepayment and relatively low, interest rates for twenty-year periods. We actually offer 25 as year. Where there is even more direct fit is for low FICO leads and this is an alternative to cash deal, where if they have a sufficient amount of equity in the home, then they can access Pace financing and I will tell you more about that here in a second.
Why do homeowners and solar dealers like Pace? No money down, competitive interest rates for a certain segment of the market, the low FICO segment in particular, they don’t have a lot of options. Oftentimes, many times, they just have credit cards as their option. They are relatively long payback periods, so you can spread out the payments. It doesn’t require a credit check. It does not encumber personal credit checks. It’s only based on the home value and they may be transferable in the event of a sale of the property and that’s an important point.
Flipping to the next slide, how is it differentiated from unsecured loans? Again, the important take away here for Pace is it doesn’t require a FICO score. It just cares about if there is enough equity in the home. The rule there is the total amount of the Pace financing plus the mortgage cannot be more than 100% of the value of the home. For those folks that have FICOs below 650, this becomes a very viable option, assuming there is enough equity in the home. We don’t look at all at our underwriting, our credit approval process, at their income, so low income wage earners can access it. As I mentioned before, it doesn’t require a down payment and it doesn’t encumber your personal credit.
A lot of people ask how is it different from a home equity loans? One of the big differentiators is we don’t need a formal appraisal, which can take some time and cost money. In many cases people just want to do the job quickly. They don’t want to spend the time going through the appraisal process. That’s especially important for non-solar types of qualifying equipment, HVAC. When your HVAC is out in the summer, you want it fixed in days, in hours, not weeks and months and same for roofs if your roof is leaking you want it fixed right away. It’s very quick, instantaneous process of processing a Pace transaction.
Here it is. We just need to check the address to make sure it’s eligible. Again, it needs to be within a municipality that’s approved Pace financing. It needs to be an eligible project, which in the case of solar is automatic as long as the CSI qualified. Then you apply it to us for credit. Hopefully, the homeowner has enough equity in the home that we can send them the financing documents. They can e-sign it, send it back and we can pay you once the project is completed.
Another question. How many of you would like to get paid more for generating Pace Financing? I am going to guess I’m going to know what the result of this one is, but it’s an important question. I will tell you why here in a second. Go ahead and submit it as predicted, 100%, beautiful. Then you will like what I have to say on this next slide, which is this is an expanding market. I think it’s going to be available in many states by the end of the year. I am going to predict 5-6 states. I will mention one of the issues that will impact the speed of rollout is we are still waiting for the FHFA to give us guidance on his contractual support Nation issue, but all the handful of major players in the residential Pace market are all on the same page, which is we are willing to offer contractual support Nation to upon the sale or refinance event where the mortgage holder does not want it on.
The main point I want to leave you with is right now there is a lot of money being made on the financing part of Pace. There is an opportunity for you to share in that. We would like to encourage that dialogue with you. One of the things we would encourage you to do is email us at info@Pacefunding.com and tell us a little bit more about yourselves in terms of specifically what state you are operating in and where within the state, in particular your sales effort is focused on. Also again, I think I have a sense for how many of you are residential, but point that out. I would also like to know if you have used Pace before?
That would be an important piece of information for us and we would like to get into a dialogue in terms of how we can make this a more lucrative proposition for you to get out there and sell Pace. With that, I will pass it back and again, info@Pacefunding.com. We look forward to hearing from as many of you as possible, thank you all.
Kathy:
Awesome, Bob. Thank you so much. That whole function was fun and helpful, so thank you everyone who participated in that. Last and not least, we have Jim. Jim founded Run on Sun in 2006. You may have seen his blog, read his books or in one of his 22,000 Twitter followers. I know I am. Jim has been quoted in the Los Angeles Times, the Wall Street Journal and the Guardian, as well as numerous trade publications including ours. He is a [Nabset 00:25:36] certified PV installation professional and has been since 2010. Jim holds degrees in mathematics, computer science and law. Today, he is going to focus on tips for working better with customers, so go ahead when you are ready, Jim.
Jim:
Thanks very much, Kathy and good to be with everybody here today. My topic is on a slightly different perspective and it has to do with what I see as a looming crisis of confidence for the solar industry generally with our clients out there. It comes from the fact that whether it’s some questionable financing schemes or shoddy work or outright fraud frankly in some cases, we are eroding confidence in the industry. There’s news reports out there on a regular basis talking about these problems and they give ammunition to enemies of the solar industry and criticism from both sides of the aisle, whether we care to acknowledge it or not.
You don’t have to take my word for it, just a quick and casual Internet search turns up things such as this. This is an announcement about the Sun Run class action lawsuit here in California regarding their deceptive business practices with regards to lease arrangements. This is an article from Mother Jones Magazine and I think with Mother Jones clearly on the left of the political spectrum, but what they are putting out here is that both Republicans and Democratic members of Congress are contacting federal watchdog agencies because of concerns being raised by their constituents over deceptive marketing practices in the solar industry. Here is one from the right on The Daily Caller, pointing out that even though we have organizations like [FEA 00:27:42] publishing an ethics code based on the large volume of complaints against member companies, it appears that ethics code is being observed more by ignoring it.
Here is a settlement agreement out of the state of Arizona with the state AG’s office against the solar company and this case Epcon Solar. It was ordered to pay $40,000 in restitution. In point of fact the fines against Epcon Solar exceeded over $150,000 and ultimately the company is now out of business. Here is a class action lawsuit in the state of Louisiana seeking $5 million in damages on behalf of a class estimated at over 2500 separate individuals against three solar power companies for defrauding them out of their money. A little closer to my home here, here is the Verengo class action settlement page where you could have signed up for a claim against Verengo for violations amongst other things to the do not call lists. They are going to pay out nearly $2.4 million to resolve this lawsuit.
The bottom line out of all of this is this is simply not a sustainable environment we are creating for ourselves. The self-policing we have done to date such as it is, doesn’t seem to be working. We have ethics codes out there, but they don’t seem to be followed. The simple truth is we either get better quickly and address this issue ourselves or we are going to face a backlash, which at a minimum is going to amount to regulations that probably will be fairly burdensome for most companies, particularly small solar companies to live with. It’s my proposal to you today that a change in mindset is needed.
I would suggest to you one way to think about that is to transition from customers to clients. All too often in the solar industry we look at the people who purchase our systems as customers, but that is a transactional relationship. Gas stations and fast food joints have customers. A customer comes in. They pay some money. They get whatever it is and that’s the end of the story. That’s the relationship. But we have to have a longer view than that. We need to have clients and a client is a trust-based relationship.
While I know it’s fun and popular to poke jokes at attorneys, attorneys when they do it right have clients. These are long-term relationships, wherein the client’s best interest are the focus. If you think about it, we are putting equipment on people’s homes that is designed to last for 20 years or longer. Few entities have longer-term relationships than that. In a lot of ways we see this played out is when our prospective clients tell us, “I am counting on you to be the expert. I need to be able to rely on what you are saying,” and all too often, they are finding they can’t and that’s a big problem.
To develop a client to focus, you need to start by building trust. That’s the basis and then everything you do thereafter has to enhance that trust. Amongst other things that implies the duty of candor, which means tell the truth to your clients, even when it adversely affects your ability to close the sale. You have a duty of communication. We need to keep your clients in the loop. When things change, you need to keep them informed. You have a fiduciary duty as well. You need to look after your client’s financial best interest and that means providing comprehensive proposals and not a deluge of change orders after the fact.
I have five rules I would like to go over with you briefly today that I think would go a long way toward re-focusing us on our clients and let’s take them one at a time. The first has to do with ethical lead generation. As Verengo is finding out, Do Not Call lists mean exactly that. They are about to pay out $2.4 million as a result of bad practices. If you farm this out, if you purchased leads from a third-party and they violate the Do Not Call lists, guess what? You can be liable for their misconduct. If you have a canvas, you need to be aware and avoid the overly enthusiastic canisters. You don’t want people prowling through neighborhoods like snake oil salesman. Instead, focus on referrals and building a referral base and driving clients to your website to useful content that helps build trust.
Second, when you perform a site evaluation, you need to do it honestly. That means starting with qualified personnel, people who understand what the rules are, so they are not making promises that you as a company cannot deliver, whether that is building out a system that cannot fit on the roof or offering to provide products that you cannot supply. It also means you have to remember sometimes you simply have to walk away. That image on the right is taken from the LA County solar map. Those blue dots represent areas where it would be useless frankly to put solar and yet, we know there is a company out there will sell a system to that whole motor if the homeowner wants it. Don’t let that be you. It is better to walk away from a sale, then to create an agree client.
When you prepare a proposal, it needs to be comprehensive and here disclosure is the key. I can’t tell you the number of proposals I have seen from competitors where they don’t even disclose what are the products they are planning on putting on the roof. You would not buy a generic car. It doesn’t make sense that you ask your client to buy a generic solar power system. Furthermore, you need to outline what are the assumptions that are built into the proposal that you are giving? What are the utility rate increases that you were assuming? What kind of performance are you assuming out of your system and how will it be graded over time?
Those need to be disclosed. When you do that, you can then provide a realistic performance model that’s based on something like PV Watts and can provide a legitimate savings model that is actually tied to the actual utility rate tariff that this particular client is on or can switch to. A legitimate payback model that lets them know when are they going to break even on this project. That also implies you provide them once you get to the point of signing a contract with an appropriately detailed contract. That contract has to set forward the products, price, the start date, etc., for this project. It has to outline any known contingencies such as are you depending on financing being approved and if not, you need to have that spelled out.
If there is a process for change orders, it needs to be in writing and spelled out in the contract that you need to have a written process for change orders. Your contracts should evolve over time. The whole purpose of having a contract is to cover events that might arise and making sure the parties know how they are going to be handled. Your contracts should evolve over time as you learn more in the industry and have greater experience with things that have gone south. That’s a way of protecting both yourself and your clients.
When it comes time to sign on the line, please don’t send this guy to be the guy doing that. We need somebody who understands the contract and can explain what it means. Finally, when it comes time to execute on that contract, we need to do so completely and transparently. Doing what you said you would do when you said you would do it. I understand that changes show up, permitting gets delayed or products get held up in a pipeline that you do not have control over, but that means you have to communicate that with your client so as to keep the client in the loop. It means you need to do it for the price you promised. You are expecting your client to pay you what they agreed to pay you. They have a right to expect you are going to do what you said you would do with the price you said you would do it. That means keeping change orders to an absolute minimum.
Finally, you need to provide proper owners materials when the job is done and that includes As-builts drawings, data sheets for the products you actually use, warranty information and put it all together in a nice neat binder, so that the client has that updatable going forward. Last, but not least, please manage your crew. You don’t want people doing installations that look like this. It is all of this enough? Of course not there are lots of things we need to do beyond just what’s outlined here, improving training, safety procedures, warranty disclosures, etc., but it’s a good start. I think if you go back to those news articles we would looking at the beginning, if those companies were acting in this matter, I don’t think they would find themselves in the situation they are in. If every solar company could adopt these simple rules, I think we would go a long way towards addressing the confidence crisis we are facing. Thanks very much.
Kathy:
Really fantastic, Jim. Thank you so much. They are important issues that’s the whole industry needs to be aware of, so thank you so much. Now we will start turning to your questions. Remember you can still submit those at the bottom left of your screen. We will go back to Deep here, since he had a couple minutes to relax and grab some water. Deep, we are wondering what kind of training is available when people begin to use your program?
Deep:
Thanks Kathy. We have found online webinars are the best way to start and we have weekly webinars of fixed times for all our existing users as well as new customers who are looking to join in that and that’s the first way to get trained. The most effective training method is to actually do in person training, one-on-one. We have support centers out of San Diego and Charlotte, North Carolina, where we can book times with our expert users and they will actually run with you on calls.
We encourage project level training where if you are stuck on a specific project on question on demand charges or time of use rates or type of financing questions, we are on standby usually to pick up the phone and help you when you are developing those proposals. Also, of course beyond the sale where if you are using the pack form of proficiency alerts, modifications, the workflow setup. We have companies constantly questions around technology if you have internal IT teams when you are working with them around the clock. If you do not, we are your friend, helping you build your tech teams. I hope that answers your question, Kathy.
Kathy:
Wonderful, lots of action there. We will go to Bob now. Someone is wondering is Pace available in Puerto Rico and is funding available for government and city projects in addition to residential?
Bob:
I do not believe it’s yet is available in Puerto Rico, but I could be wrong. If it is, it is only commercial and yes, it is very much available in most states that have enabling legislation. Commercial should be available. Again, only one state right now has past four years, has been focused on residential. It’s California, which is over $1.5 billion, which is probably 95% of total Pace volume residential and commercial.
Kathy:
Wonderful, thank you very much.
Bob:
You can look on the PaceNation.com. I should mention this that there is a lot good information on PaceNation.com, the industry services association website in terms of where there is enabling Pace legislation. It spells it out clearly.
Kathy:
Thank you, I’m going to grab some water here as well. What can the solar industry do to deal with issues that are caused by lead generators that may be a little bit less and they had some issues that might get you into trouble? Are there tips for selecting good lead generators?
Jim:
Me, I had a little hard time understanding you, but I think if I understand your question you’re asking if what things can we do as an industry as a whole to make improvements? Is that fair?
Kathy:
Yes, the question, especially when it comes to … You said for [cliban 00:41:39] and that kind of third party leading generators that might get you into some trouble. What can you do to select good sources for leads?
Jim:
One possible approach is not to use third-party lead generators in the first place. That’s actually the approach we have taken, but if you are, you need to look closely at their processes. You need to make sure they have a commitment to following things like Do Not Call lists, not calling cell phones, not calling after certain hours, taking people off lists when they asked to be removed. You need to get back into writing that it is something that is part of their business practice. I would actually look for an indemnification provision in a contract with them such that if there are claims definitely that they are on the hook for defending … You can’t simply just hire somebody that says, “Yes, I will bring you a bunch of leads,” and not look into what they are doing. You need to know it as if you were doing itself and you need to do everything you can to make sure their processes meet up with best practices.
Kathy:
Thank you very much, Jim. That’s for Deep, can you talk [inaudible 00:43:04] to the US and what is the time line on the FHA guidelines?
Deep:
Deep, for on the software, we are so far focused only on the US market and we have customers in 20 states. We also have Puerto Rico opened up. We do have plans to offer this in certain other countries next year, which is 2017. We have done tests in some markets and we would work with partners, but right now it is not available outside the US or Puerto Rico.
Kathy:
Thank you very much.
Deep:
I think the other question was on FHA. I think that was for Bob?
Kathy:
Yes that one was for Bob. Bob what’s the timeline has been on FHA guidelines?
Bob:
Boy, I wish I could tell you with some degree of certainty. It was a big topic at the Pace Nation Summit a month or so ago and were told …There seems to be some of thought that they are ready to come out in the next few months. I hope that’s right.
Kathy:
Another one for you Bob actually, while we have you here. What can help spur the adoption of Pace on the individual municipal level?
Bob:
On the municipal level, what was the question? What can be done to accelerate the adoption?
Kathy:
Yes.
Bob:
Is that the question? In California, many of the largest cities and counties have already adopted one or more of the programs. There are just a handful of us out there. If there is a particular municipality that has not adopted any of the programs, then you can reach out. We have a list of all the various officials at the cities and the counties and we would be happy, we would love it if you would actually help us in gaining support from those municipalities because there are still some holdouts and there is no reason for it, given the performance of Pace throughout the state. We would, again, if you could reach out to us at info@Pacefunding.com, we can give you the specific information.
Kathy:
Thank you, Bob. For Jim here, they are saying they find that a lease contract can be confusing to customers. Are there some good resources to help a potential residential client prepare the lease with the ownership to understand it better?
Jim:
I’m sorry. Was that for me? I am having a hard time understanding you, Kathy.
Kathy:
I’m sorry, yes for Jim. Are there any resources or any tips to help residential clients compare leasing solar installation compared with owning one?
Jim:
I think there’s a lot of resources out on the web about how to compare the financial benefits from different financing approaches. We have written about it certainly on our blog, but there are other organizations out there that have fairly comprehensive calculators and I can send you a link to some of them off-line and you can share those out to people who are interested. They will give you the ability to plug in some of the assumptions that are being made on your behalf with the different financing options and get a sense of how that affects your payback long term.
Somebody who is advancing a lease program to a prospective client ought to be showing them as part of their proposal the difference between what that system is going to cost them through a lease or just what that system would cost them if they were to make a cash purchase, recognizing that not everyone can afford to make a cash purchase, but having the disclosure so they understand what the differences are I think would be helpful.
Kathy:
Great Bob and hopefully everyone can hear me. I am trying to speak a little closer to my phone. Deep back to you. Can you elaborate on the team activity logs and how they are used?
Deep:
Absolutely, the big trend we find in the residential industry right now is companies that are doing really well often have sales teams that are in-house, but have some portion of their construction teams outsourced, especially if they are scaling in multiple markets and they are growing the business. They are not necessarily interested in holding trucks all across the country. In that model we find there is always a handoff that happens between sales and ops, which is crucial. That’s a point of failure for many companies in the past where details are missed on projects or let’s say after the handoff, the sales team loses control and lacks information on the customer’s experience.
At the end of the day their customers realize, as Jim said, the client and they want to make sure they have a good handle on what’s going on the project. Enact has worked a lot on this problem for over a year now, where the platform has a team activity log that helps the entire team on a project to stay on top of what’s going on in a project. You can see what’s going on live on dashboards. You can see text messages. You can actually even go on to your mobile interfaces, which is something very useful if you are in the field. That’s one piece of it.
The other piece of it is on the operations module of our platform, we have what we call as “op-act analytics.” This is keeping track of time on your projects. It actually guides users on what’s the normal time for the different steps of your workflow and if you are late, it prompts users on what’s needed, especially if you are late on projects. Team of managers can design their workflows and set rules, the business rules about how long should a permit take? How long should a side design takes? If a project falls behind, the software prompts you to catch up. That helps team performance, even if your project is in-house or if you are outsourcing them, those are some of the ways we help, activity logs, keeping track of the reporting for large-scale residential players.
Kathy:
Thank you, Deep. A couple more coming in here, back to you, Bob. Can any solar installer qualify to offer Pace financing or is there a qualification process?
Bob:
Yes, there is a qualification process and hopefully everyone on this call would be eligible. The minimum standards are we need to obviously make sure you have a standing contractor’s license to do business in that state and then the proper insurance in place and also, a good review from the Better Business Bureau. Those are the minimum standards and there are potentially some milestone payment program that you can qualify for and that becomes more of a credit-related issue where we would need more financial information. If yes, hopefully that answers the question. Again, reach out to us at Pacefunding.
Kathy:
Wonderful, thank you very much. I think we have time for a couple more here. We have one for Jim. What are your thoughts on a company’s ability to fulfill long-term warranty obligations, given historical bankruptcies like [Celindra 00:51:48]? How can a homeowner be assured that their system will be protected?
Jim:
I think that’s a terrific question. It has multiple layers to it. On the one hand it has the underlying question of the bank ability of manufacturers and can we count on the fact that today’s leading manufacturers will still be in business five or 10 years from now? History has shown us that oftentimes that’s not true.
Similarly, installers, frankly, go out of business all the time. Often times, with very little or no provision for handling warranty claims going forward. There is also a problem here is that frankly nobody is talking about. At least, I have seen very little discussion of. I had a question from a perspective client just the other day wanting to know what happens if his solar panel fails in 15 years? While I explained to him how the warranty would work in that circumstance, again assuming that the manufacturer was still in operation, what we didn’t get into and it is a bigger kettle of fish and obviously we don’t have time for today, but is are you even going to be able to find equipment that will fit in that location?
You can think about a panel that fails in the middle of a rectangular array and now the only panels that are available 15 years from now our in an entirely different footprint, operating in an entirely different DOC than what we are trying to replace. It may make some simple plug in place slot next to impossible. I think as an industry we need to do a lot more in terms of spelling out for prospective clients exactly how all those pieces are to be resolved. I think that could be an entire webinar in and of itself for another time.
Kathy:
Thanks for the idea, Jim. It makes my job a little bit easier.
Jim:
I am here to help.
Kathy:
I have definitely thrown some hard ones. I have definitely thrown some hard ones at you, but excellent job and briefly answering that, addressing that. We have one more question here. This one is for Deep. Does Enact allow third-party design software to be integrated within it?
Deep:
The answer is yes. We have different levels of integration. For residential companies we have been asked to plug in shading type tools and we have done that. For commercial companies, we are now launching a service with a very large imaging provider where you can now download [auto get 00:54:46] files for your project or get 3-D images as well, hi resolution. We ourselves do not as Enact do any engineering, drawing sets of these eyes. We actually have lots of companies who are in our ecosystem who partner with us and do that. We are helping drive more business to them or work with any company that our installer customers bring to us. We don’t provide the service of design sets, but we make it easier and simpler. We reduce the access costs for information.
We also have a service now, which is national where the software pulls up property data for any address in the US, which is publicly available through a single click. Publicly available data includes some interesting things like, of course, on the pay side of things like mortgage information, lender information is all public data, as well as what’s available on the building, square footage on the parking lots, roof, etc., is all available in the public databases. We’re pulling all that data and making it easier therefore for users to work with it and reduce their own times to deliver on the projects.
Kathy:
Wonderful, thank you so much, Deep. I think that’s all the questions we have time for, but I definitely learned a lot and as always, I hope everyone else did, too. If we didn’t get your questions or if you have additional ones, feel free to contact our presenters on your own. Again, this webinar will be emailed to all registrants, so you can view it again at your convenience. Also, if you are watching this on demand, you can still submit your questions and we can forward those along to our presenters, lots of opportunity there.
Again, I would like to thank Deep and Bob and Jim. You all did so excellent in your presentations and thank you so much for all your hard work. Thanks to everyone in our audience for listening and contributing to the discussion. I hope you enjoyed the presentation and we invite you to enjoy as to more Solar Power World Webinars. Thank you so much.
Deep:
Thanks all, bye.