There's A Better Way to Go Solar

“Get top-quality solar panels and equipment at just 3% above wholesale cost, eliminating middlemen and saving you money!”

There's a
Better Way
to Go Solar

There’s a Better Way to Go Solar because the solar industry business model was flawed and doomed to fail. I know that may sound a bit presumptuous but please bear with me. I worked for a startup solar company that I was fortunate enough to have a keen insight because I did all the IT work for them. So, as I was working with the different departments I got to pick the brains of the department managers. Not long after being hired as the IT manager I started doing sales because I definitely believe in solar energy. I had the best of two worlds, a salary with no pressure, and collecting commissions from solar sales, and an additional bonus of insight of the entire company and a personal relationship with the owner. The following is what I learned from the whole experience and made me realize the business model was the problem. Although the following describes the flaws of the solar industry, it’s no longer true because of “Your Solar Advocate” eliminating the expenses of the middleman, management, and more.

In 2018 the Solar Business Was Fast and Furious

I am speaking about a Florida based solar company that started doing business in January of 2017, I know because the owner and I had an established relationship, and he depended on me to for his computer needs. Remember I said I have to believe in what I’m selling, and he knew I did. The owner knew I was talented and more than fair about delivering a quality product and fair pricing.

I had sales insights of the company from the very beginning, and it was astonishing to observe in many ways. The owner was very generous with salespeople that produced, sales were constantly improving from the very beginning in 2017. Make no mistake about it, the quality of workmanship was excellent. I don’t recall any issues with the installations that weren’t addressed if there was a problem. We were delivering a high-quality solar system at very expensive prices caused by costs being driven up. It was really fun times for the solar industry in Florida because the voters made rooftop solar legal with no exceptions in the 2016 elections. Net metering was the law of the land allowing for a one-for-one trade-off with public utilities. In 2017 the first year in business the company I worked for exceeded $600,000 in sales, but it was just getting started. Then 2018 was the magical year for the solar industry in Florida, and sales took off.

Instant Success isn't Always a Recipe for Long-Term Success

instant success can be detrimental for a company’ success long-term, and that appears to be what happened to a great deal of solar companies that went out of business. What I observed was a company going from zero to a 120mph in literally months. They were growing so fast that without the proper management tools in place it got out of control. Too many people were drawing paychecks that really didn’t do much. I found most of the staff in every department to be competent and professional, but there were a lot of people coming and going and in fighting about leads. Many of the people coming and going were milking a paycheck but not really an intricate part of the company. Far too many were highly aggressive salespeople misleading customers to make the sale. The product and workmanship were excellent, but the manipulation by salespeople to get the big commission would be the undoing of the company. Those salespeople got paid, but the company had to deal with the fallout salespeople misleading homeowners about how solar works, and the tax credit. If a homeowner believed the ITC Tax Credit was a Rebate the salespeople let them believe that the salespeople would lie by omission. In 2018 sales soared to 18.4 million dollars only for the company to be bankrupt by the summer of 2019. So, the question is what went wrong?

The Solar Industry Uses a Doomed Business Model

The solar company I worked for was structured after the same companies the owners previously worked for, one example being Vivint Solar. When the laws changed in Florida it invited a whole new group of players to open solar companies, and they were the salespeople of national solar companies. The problem was the companies the new startups emulated went out of business, and they were going to suffer the same fate because of a flawed business model. The flaws are demonstrated in the chart below; the problem was far too many hands in the pot was driving up the cost of a home solar system for homeowners.

Hard Overhead Costs:

included a physical location, electric bill, internet, and storage for solar panels and equipment, vehicles, insurance and licensing.
High Pressure Sales Structure

Salespeople were basically free help because they only got paid 1099 commission. The customer paid .25 to .40 per kilowatt for the salespeople and sales manager. A 10K system paid the salesperson on average $3000, and an override for the sales manager of a minimum of .10 a kilowatt, adding another $1000 commission to the cost.
High Pressure Sales Support Team

Salespeople have a sit-down meeting with the homeowners to determine what will work best for them. During this process the salesperson is making sure the homeowner qualifies to purchase solar, but behind the scenes in the home office building a proposal for the homeowner based on the information the salesperson is inputting. The salesperson is free for the company, but the proposal builder is not, they get paid hourly and get a commission for sales. The bottom line is the solar company isn’t paying for anything, the customer is paying for all of this and a whole lot more.
Marketing Costs Became a Major Obstacle

Sales leads are the most critical part of a solar company, and as a result they endure enormous advertising budgets to keep things flowing smoothly. The company I worked for spent in excess of a million dollars in 2018.
Management Costs

Solar companies don’t run themselves; they require management expertise no different than any other business, and it costs more money.
Managing Other People’s Money

We were selling solar systems for $40,000 but the owners of the solar company were only making $5000 to $7000 per installation. Yes, $7000 is not a lot of money when you’re selling something for $40,000, because that’s less than a 5% markup. The point here is you paid $40,000, now multiply $40,000 times the total active sales for the solar company, we’ll say 62 active sales totals $2,480,000 that they are handling to make approximately $380,000. The problem is the owners are facing the constant temptation to take an oversized payday. As the pressure builds from the excess overhead the temptation grows. This scenario is what makes solar companies business model flawed. Sometimes less is more and this is the perfect scenario because Your Solar Advocate delivers more for less by eliminating the waste and using technology to save homeowners a minimum of $6000 or more!
Warranties: Solar companies were providing warranties they couldn’t backup for the long-term because they were using a flawed business model almost insuring, they would go out of business. Your Solar Advocate is honest and upfront with a realistic approach for Solar Installation Warranties with a 5-year bumper to bumper warranty for workmanship and manufacturer warranties for solar panels, inverters, and battery backup systems. At the 5 year point we offer annual extended warranty for workmanship and manufacturer warranties remain in effect for solar panels, inverters, and battery backup systems.