When it comes to the world of solar energy, there’s a lot more to consider than just the panels themselves. Sure, the hardware is important, but it’s only one piece of the puzzle. The other piece is the cost of acquiring those all-important residential solar leads. And when it comes to that cost, we’re not just talking about the hard costs, like the price of the panels or the labor to install them. We’re talking about the soft costs, too. That’s why we wrote this article, “What is the soft cost of residential solar leads?”
But what exactly are these “soft costs” we speak of? Simply put, they’re all the expenses that come with acquiring and closing a solar lead, beyond the actual hardware and installation. These can include things like marketing and advertising, lead generation, customer acquisition, and more. And while these costs may not be as tangible as the cost of a solar panel, they’re just as important to consider when it comes to the overall profitability of a solar company.
So, what does it take to manage these soft costs and remain profitable in the residential solar industry? Well, for starters, it’s important to have a handle on expenses. This means knowing where your money is going and being able to track and measure the ROI on your marketing and lead generation efforts. It also means being smart about the leads you pursue, and having systems in place to effectively qualify and nurture those leads.
Another key to profitability in the solar industry is to become a channel sales partner rather than a solar installation or EPC company. This means working with installation companies to provide them with the leads they need, rather than taking on the fixed costs and responsibilities of the installation yourself. By doing this, you can focus on what you do best (generating leads) and leave the installation to your partner.
But perhaps the most important thing for solar companies to keep in mind when it comes to profitability is the importance of education. True home solar is a complex industry, and companies need to stay up-to-date on the latest regulations and best practices. This includes knowing the laws around telephony and outbound dialer software, staying compliant, using the correct data, and incorporating the right pitch and downstream marketing operations systems.
According to a report by GTM Research, soft costs accounted for 64% of the total installed cost of residential solar systems in the United States in 2019. Another report from the National Renewable Energy Laboratory (NREL) states that reducing soft costs could lead to solar electricity being cost-competitive with retail electricity prices in all 50 states by 2020.
In conclusion, soft costs are a crucial aspect to consider when it comes to the residential solar industry. Solar companies need to have a handle on their expenses and remain profitable by becoming channel sales partners, managing expenses and remaining profitable. The industry is constantly evolving and companies need to stay up-to-date on the latest regulations and best practices, including laws around telephony and outbound dialer software, staying compliant, using the correct data, and incorporating the right pitch and downstream marketing operations systems. By following these steps, solar companies can ensure they are not only generating business lead lists but also closing them, leading to profitability and sustainability in the industry.