5 Smart Ways Residential Solar Installers Can Cut Soft Costs

5 Smart Ways Residential Solar Installers Can Cut Soft Costs

The U.S. residential solar market is doing well. There was an increase of 2% in installations from the previous quarter, and there was an increase of 46% from the previous year. Industry experts predict that this growth will continue in the future.

There are many solar installers competing for a piece of the growing solar market. Residential installers need to find new ways to save money and grow their businesses in order to stay competitive. One way this can be done is by reducing soft costs.

Despite a slight decline in recent months, soft costs remain much higher in the U.S. compared to other developed global solar markets. These costs, for design, customer acquisition, permitting, and more, can account for up to 70% of total residential solar costs.

Scaling a solar business in this climate, whether it means moving to a new market with different regulatory rules or adding a sales channel instead of relying on internal channels, comes with risks. These risks can add up and make it hard to be successful and sustainable.

Here are five ways that residential solar installers can save money on their costs:

#1. Take Customer Acquisition Online

Solar installers have traditionally relied on door-to-door sales to get new customers. Even though many companies had to stop their operations because of the pandemic, many of them have now returned to door-to-door and in-person sales.

However, as of the first half of 2021, the cost of acquiring a customer for a residential solar system has risen to 23% of the total price. This is following a 9.2% increase in costs from 2018 to 2020, according to Wood Mackenzie.

Selling solar door-to-door is expensive because it takes a lot of time and labor. It can be expensive to find new customers in this way. However, you can reduce these costs by using an online sales strategy. This will help you reach more potential customers in the same amount of time it takes to walk from house to house.

#2. Streamline Permitting

The permitting process can add a lot of cost to residential solar installations. This is because there are a lot of bureaucratic procedures that increase the chances for risks. These procedures also add time to the installation process, raising the overall cost.

Permitting can be a major obstacle for businesses that want to grow and expand. This is because the process of getting permits can be very time consuming and difficult, especially if you are trying to do business in a new area with different regulatory agencies.

Thanks to automated permitting programs and inspection checklist apps, like SolarApp+ and SolSmart, installers can now speed up the process of getting permits and inspections. This can save them money on the associated soft costs.

#3. Partner With a Non-Solar Business

Another way to reduce customer acquisition costs is to partner with a non-solar business. This can be done by partnering with a roofing or HVAC contractor. When homeowners replace their roof or install a new HVAC system, they can also install solar panels at the same time and get a discount. This will help both companies because they will be able to give referrals to each other.

#4. Keep Lines of Communication Open

It is very important to communicate with others in order to make sure that projects stay on schedule. This involves delivering the right information at the right time. For example, many things need to be completed within a certain time frame for a project to be successful, such as getting permits and locating the right site.

If installers don't have open communication, they can cause delays and other problems. This can lead to increased "soft" costs. Poor communication can not only cause delays due to poor planning, but it can also ruin customer relationships. This goes beyond just talking about products and costs. Installers need to deliver information about the market and what could impact current or future projects.

#5. Provide More Rooftop Solar System Value

The output of a rooftop PV system matters the most at night. This is when customers need high-powered, high-efficiency modules that are also affordable. Delivering this value helps with customer satisfaction. Satisfied customers become brand ambassadors who can evangelize friends and family into getting their own rooftop solar systems. This brings in new customers without having to spend on acquisition costs.

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