The underrated reason software is helping solar developers grow in 2021

2020 was the year that every solar developer became a digital business. At first glance, you would expect it to be triggered by social distancing: that the entire industry went contactless, and the only way to enable that was online tools. However, the actual story was more nuanced, and more interesting.

We spoke with over 50 solar developers, in over 15 different countries around the world. These solar companies covered both residential and commercial solar projects, and ranged from companies with decades of track records, to companies with less than a year of history. What we found was that the strongest forces for digitization were new opportunities and challenges for growth, not social distancing.

Volumes are Increasing at the Top of the Funnel, Yet Close Rates are Falling

One of the most consistent themes we heard was that, despite the global uncertainty caused by the pandemic, interest in solar (from both homeowners and business owners) was higher than ever.

There are multiple factors that contribute to this:

  • People are spending more time at home, driving up their electricity bills, and increasing their awareness of their home amenities.
  • Vacation budgets are largely going unspent – and in many cases, that budget is being re-purposed to purchasing a solar energy system.

However, the increase in interest at the top of the funnel comes with a catch: a longer purchase cycle. Customers are taking longer to make their decisions to move forward with solar, primarily because of the uncertainty related to the pandemic. When another lockdown is possible, it seems prudent to conserve cash. Often, the customer assures the solar developer that they are serious about going solar – but that they just want to wait until there is more predictability in how the pandemic will play out.

Increasing Competition Results in Time Pressure, Not Price Pressure

Meanwhile, there is another trend that we heard about in many markets: increased competition. In many places, new entrants are joining the solar industry, and solar companies with years of experience are competing with companies that have months of experience.

Often times these new entrants are companies with businesses in other trades, for example roofing or HVAC. With many construction segments slowing down during the pandemic, these companies are opening up solar operations in order to diversify and seek opportunities for growth.

Additionally, some of the increased competition is driven by the fact that solar is becoming a more mainstream industry in more markets – so this increased competition is part of a natural evolution for the industry.

However, the result of this increased competition isn’t downward pressure on price and margin, as one might expect. Instead, the increased competition results in increased time pressure to respond to customer requests. We heard from many solar developers that they can no longer take a week or two to get back regarding an inquiry – instead, if they are not responsive within a day or two, then they have often lost the customer.

Remote Design and Sales Team Efficiency Is Critical to Manage These New Pressures

This two-part set of pressures – increased lead quantity, combined with a requirement for shorter turnaround time – creates a lot of pressure at the top-of-the-funnel for solar companies.

The first response is typically to expand the size of the team, bringing on extra salespeople (or, depending on the size of the company, this might be the first dedicated salesperson). Yet they also realize that this team expansion also calls for re-evaluating the sales process, especially if some of the calculations for proposals are done in Excel or based on gut-feel – these make onboarding new hires particularly challenging.

So these companies are then adopting solar sales software such as HelioScope in order to speed up their sales processes, and also to streamline the onboarding of their new employees. Together, this combination often results in a 10x or better improvement in sales inquiry turnaround time, from days/weeks to under a day.  Furthermore, the new employees are often younger – and as digital natives, are more comfortable with cloud-based software.

On this front, US solar developers are actually ahead of the rest of the world in adopting digital tools – in the US, most solar developers have adopted some form of solar sales software, even if it is only used by a subset of the team – whereas in other countries, it is not uncommon to find that only half to 2/3 of solar companies are using dedicated solar sales software.

Sponsored content by Folsom Labs

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