Selling Solar

How to enter, compete and win in the solar business

About Joe Boyce

President of Gaia Worldwide and Solar Visionaries (Cambridge MA) Lifetime Sales Person Pragmatic, non-academic Knowledge of Solar, Finance, Tech, Marketing, Recruiting, Org Dev. Some experience in residential construction and remodeling 1 roof Started in Solar in 2005 at Prometheus Institute Launched Greentech Media with co-founders in 2007 Here to help you get started on the right foot reach goals

Selling Solar

Topics
MarketOverview

The Business of Solar Market overview Global, National, Local

Sales and Marketing How selling solar is different than selling electrical contracting services How you can increase your business Takeaways Fully aware of the industrys potential, and where you can play successfully Have a plan for how to build your organization and enter the market New marketing and sales techniques that put you ahead of industry standard Understand how you will make money
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List of Solar Companies Im Representing

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List of Solar Companies To Know

Either Invaluable Knowledge Resource or dominant in category worth modeling after

www.firstsolar.com

www.solarcity.com

www.sungevity.com

www.prometheus.org

www.dsireusa.org
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GROWTH
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Solar Is Viable For Your Customers TODAY

Proven as a Bankable technology Competitive with Utility Rates in many markets More every day Utilities and Big Businesses have already gone solar Government support (incentives, rebates) is very high Big price drops in cost of materials More profitable for installers

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Unique Benefits To Your Customers

Protects them from increases in Electricity costs Reduces US dependence on Foreign Oil Green is more important to consumers these days Very low maintenance costs, Financing and incentives are at their best in history

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Global Growth in Cumulative Capacity

United States ranked #4 in total installed capacity in 2008 with around 1.2GW

Source: NREL

Germany Remains #1. Spain surpasses Japan and US in 2007 Due to New Feed-In Tariff
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Surprising Growth in 2009 Beat Everyones Forecasts

The global solar photovoltaic electricity (PV) market counted an additional increase in installed capacity of about 7.2 GW in 2009, reaching a total capacity of over 22 GW world-wide. - EPIA

2009 New Global Capacity: 7.2 GW = approx. 1.5 Million US Homes

Cumulative Global Capacity: 22 GW = approx. 4.6 Million US Homes Almost 1/3 of existing PV capacity was installed in 2009 In spite of the Global Financial Crises and recession This has been the most important annual capacity increase ever and is particularly impressive in light of the difficult financial and economical circumstances during the past year. - EPIA
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Governments Support Solar

EU Will get 20% of its energy from clean sources by end of 2010. China Now Bigger than the U.S. in solar We dont like that. U.S. Stimulus Bill of Feb 2009 included $60 billion in loan guarantees for companies building solar and wind plants.

U.S. has a goal of doubling renewable energy production from 2009 to 2012. Considered a top priority because of issues with Oil and Coal

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UNITED STATES SOLAR MARKET

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Primary Drivers of U.S. Solar Industry Growth

Strong policies at the state and federal level (solar investment tax credit, removal of $2,000 residential cap, Treasury Grant Program) Declining prices - PV module prices down more than 50 percent in just the past 18 months Strong consumer interest - 92 percent of Americans think it is important for the U.S. to develop and install solar

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Business, Government, and Consumers Aligned In Their Support

1. U.S. is depending on solar to create jobs and economic growth 2. Abundant and safe source of domestic energy

3. Energy Security has become a major problem

4. Good for our environment and quality of life 5. Plays to Our Strength - Maintains Global Competitiveness 6. Support gets votes, voters from all backgrounds favor solar

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Widespread Adoption
Government Stepping Up
2010 = $225M in stimulus 2009 Recovery act added $117.6M 2009 base $175M Government is continuing to pour money into your businesses.

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USA Solar Market By Connectivity 1997 - 2008

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USA Solar Market By Connectivity 2009

+429 MW

+40 MW

2009

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Looking Forward

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2009 Saw Triple-Digit Growth in Residential and Utility Scale PV Installations

Source: SEIA 2009 Year In Review

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U.S. Solar Industry Year in Review

Despite

the Great Recession of 2009, the U.S. solar industry had its best year ever 2009 U.S. solar industry revenue grew 36% to almost $4 Billion The solar industry supported 17,000 new U.S. jobs in 2009 2009 Total number of solar electric installations grew by 37% Solar Hot Water installations rose over 10% Only decline was in solar pool heating, down 10% due to housing crisis
Source: American Solar Energy Society
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Yet we still face some obstacles

Customers arent very knowledgable Lots of pushback from coal and oil industries Still considered new in the United States Often requires some up-front cash, which is harder to come by now

Limited education and training resources. Consumers need to be approached differently than they would for remodeling, contracting services.
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ECONOMICS

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The Future of Solar PV as a mainstream energy source is an economic inevitability

-Travis Bradford
President, Prometheus Institute and Author of Solar Revolution

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Solar Economics 101

U.S. Electricity prices increase 4% a year on average
PV Prices decline 5-7% a year. Have for the last 20 years PV O&M costs are the lowest of any major energy source

Tens of billions of dollars invested in reducing cost more

All of the solar in the U.S. to date produces less than 0.5% of our energy demand
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GRID PARITY
The point at which renewable electricity is equal to or cheaper than grid power.

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2009
NREL study of 1000 largest utilities across the US servicing over 95% of grid electricity consumption.
Major population centers are already at or near grid-parity

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2015
1% Annual Increase in Utility Prices

2/3 of the U.S. is at or below grid costs

95% of the U.S. is within 5 cents a kwh

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Costs Have Come Down

Incentives Have Gone Up

WHILE MATERIAL AND OTHER COSTS HAVE DECLINED

INCENTIVES AND SUPPORT CONTINUE TO IMPROVE

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With Prices Falling What Happens To Profits?

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2007 - 2008
Global Supply Shortage Manufacturing Costs Shoot Up European / Japanese Incentives offering 30+% Return to Solar Homeowners Supply Cant Meet Demand US Incentives are in Jeopardy

Raw Materials

Manufacturer

Distributor

Dealer / Installer

The Solar Value Chain

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2009 - 2010
Dealers and Installers now have the upper hand

Non-US demand drops radically

Banking / economic crisis

Overcapacity in manufacturing
US demand grows Stimulus deployed

Prices Fall across the Value Chain

Raw Materials

Manufacturer

Distributor

Dealer / Installer

The Solar Value Chain

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Key Developments For Electrical Contractors

Profit Margins have shifted in your direction Easier to get product from suppliers less waiting for customers Huge price declines while incentives are still very high New financing, leasing options for customers: lower/no up front cost Economy, Environmental disaster is making consumers want it more Manufacturers doing more for you in order to move product
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Key Challenges
Consumers still need to be educated

Incentives Are Inconsistent and Always Changing

Growing Competition

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Federal Investment Tax Credit (ITC)

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Federal Investment Tax Credit (ITC)

30%
REBATE FOR EVERYBODY
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Federal Investment Tax Credit (ITC)

What Qualifies?

Solar PV

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Federal Investment Tax Credit (ITC)

What Qualifies?

Solar PV Solar water heating

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Calculating the 30% Federal Solar Investment Tax Credit (ITC)

Residential Customers

30% Federal tax credit is deducted after all state or utility rebates

*Disclaimer: Personal interpretation. Talk to your accountant

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Calculating the 30% Federal Solar Investment Tax Credit (ITC) Commercial Calculate 30% Federal tax credit before any state or utility rebates But Commercial customers need to talk to their accountants about how this affects them tax-wise.
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State Programs

www.dsireusa.org
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State Programs

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Top 10 States for Grid Tied Solar Electric (PV + CSP)

Capacity Installed in 2009 California New Jersey Florida Arizona Colorado Hawaii New York Massachusetts Connecticut North Carolina Other States Total 220 57 36 23 23 14 12 10 9 8 29 441 MW Cumulative Capacity California New Jersey Nevada Colorado Arizona Florida New York Hawaii 1102 128 100 59 50 39 34 27

Connecticut
Massachusetts Others Total

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18 78 1,653 MW
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Top Rated States Based On State Municipal, and Utility Incentives

5 Star
California New Jersey Hawaii Massachusetts Connecticut New York North Carolina Colorado Louisiana Minnesota Arizona Florida Georgia Illinois Iowa Maryland Michigan Nevada New Mexico Oregon
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4 Star

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State and Local Incentives Will Change Check for updates and changes regularly!! Up to you to stay on top of these

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Example: 5 Kilowatt System, Residential Rooftop

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Example 1 : Phoenix, AZ APS Utility Bill $100 / month $7/watt installed

Cost Before Incentives: $35,000

State Rebate: ($15,000)

State Rebate: $3/watt x 5000 watts ITC calculated after State rebate

30% Federal ITC:

Az State tax credit:

($6,000)
($1000)

Net cost:

$13,000

CO2 Emissions reduced = 9618 lbs per year or roughly 11,500 driving miles Monthly Utility Bill with solar will average $15 per month *PPAs are scarce in AZ, due to a law that they need to be regulated like a utility.

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Example 2 : Boulder, CO Xcel Energy Bill $100 / month $6.25/watt installed

Cost Before Incentives: $31,250

State Rebate: SREC Value: 30% Federal ITC: ($10,000) ($4,250) ($5,100)

$2.00/ watt (5000 watts) $ .85 / watt 30% calc. after State rebates

Net cost:

$11,900

Colorado Rates increased at 9% per year for the past 10 years 2025 - $0.29 kwh at 5.5% average increase 2030 - $0.39 kwh at 5.5% average increase The bill would be $259/month in 2030! CO2 removed: 9618 lbs/year (11,500 mi) PACE programs available
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Example 3 : New Jersey $7/watt installed Cost Before Incentives:$35,000

*State Rebate: **Annual SREC Value: 30% Federal ITC: ($8,750) ($3,400) ($7,875)

$1.75 per watt NJ rebate SREC Value Currently $3400 / year 30% calc. after State rebates

Net cost:

$14,975

* $1.75 per watt state rebate requires prior energy audit otherwise its $1.55 per watt ** New Jersey SREC values trade on exchange, prices change New Jersey State Rebates scheduled to drop each year So dont wait! CO2 Emissions reduced is 9618 lbs per year or 11,500 driving miles New Electric Bill will be about $13 per month in year 1
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PACE Financing
Removes a major barrier to cost

20 year financing from municipal government

Eliminates upfront costs to consumers Increases closed sales over 50%! Federal/city/state/utility rebates still apply Save money from day 1! Typically Utility+PACE less than original bill. Does not affect budgets or tax payers! Transferrable to new owners after certain period (usually 5 or 10 years) Get familiar with them PACE is catching fire across the country.
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PPAs Power Purchase Agreements

Very common for large commercial and utility-scale installations Low (not zero) up front cost

Usually 15 to 18 year term, transferable to a new owner / tenant

PPA provides maintenance and repairs + monitors your system You need to have a good credit rating to qualify Often complicated with tax and legal implications

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Solar Leasing
Simpler than a PPA
No Money Down! Usually 15 (or more) year term, transferable to a new owner You pay the lease payment plus any extra power you need from utility Usually includes option to buy at the end for a set residual price Require good/excellent credit rating depending on the program

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Competition

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The Field
Good Business Expect more entrants Two Profiles 1. Industry vet 20 years experience 2. Bright young college grad

Two Categories 1. Installer selling solar as product 2. White collar (MBA) more interested in financial

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The Field
Residential is not as competitive as commercial yet! Trained in financial and technical not sales Same positioning, same pitch Using the same tools for quotes Residential Market is most underserved Have not adapted to recent changes in solar industry Bottom Line: All can be beat
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The Gold Rush: The Industrys Take on it

Wide Open Market

No Dominant Players
Eager Customers Doing well while doing good

Highly Fragmented Lack of Standards Complicated Competitive

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So Lets Recap
The PV industry is over 50 years old, and still well under 1% of market.
The U.S. was #1 in the world 10 years ago We are now #4 (now #5) Contractors with existing customers have the best opportunity to capitalize 2009 was the first time in history that solar panel manufacturers had more supply than demand Panel prices have collapsed Most Managers and owners have advanced degrees in chemistry, physics, engineering, but lack real-world experience and customer interaction Top complaints: Too Fragmented, No Standards, Too Complex, Competitive
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Let The Customers Drive The Discussion

Solar is a softer sell Often takes follow-up multiple times to close Focus less on technical aspects and more on the customers interests

Make sure that they are discussing what they can do, not the environment or technology this is a big red-flag of a non-buyer
Dont overcomplicate!

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Types of Buyers

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Segmenting Buyers

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Which One Are You?

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Customers Who Said Yes To Solar

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Good traits to look for in prospects Qualify Qualify Qualify

Leadership Qualities Head of a company, organization, political group Financially Sound / Good Credit Talks to you about the project at hand, not the global issues

Comfortable with numbers

Wants to talk about solar not every possible technology
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Stay Focused On The Customer

Dont worry about Why they want it

Your job is to answer the question

Are they Qualified for me to sell to?

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Benefits Every Solar Buyer Gets

Modern, Efficient, Safe form of energy

Return on their investment Cash flow or Lifetime ROI

Reduced Carbon Footprint - Green Good PR National Solar Tour | Local business coverage A role in creating new jobs and supporting the economy

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Two Great Solar Installers Worth Knowing

Offers one-stop solution

Uniquely branded financing product Recognizable and highly visible Site provides most information Customers to self-qualify

Offers one-stop solution

Interactive online experience Has built a brand in the industry Highly visible in community and media Focused on Sales and Marketing equally with Product
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Why They Always Win

All customers pre-qualified and prioritized BEFORE GETTING A CALLBACK Know the answers to questions before theyre asked Clear, simple Value Proposition Make it very easy for the customer to say yes Permitting, Financing, Zoning issues are transparent to the customer
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END OF SECTION

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Building A Solar Business Today

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Gaia Worldwide Survey of Small and Mid-Size Solar Integrators/ Installers November 2009

84% - Need more sales was number 1 Priority

99% - Put it in the top 3 <1% - Expect to Reduce Staff in 2010 >50% - Expect to add staff in 2010 Average revenue growth in past 3 years Flat Average staffing level down 5-10%

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Survey of Small and Mid-Size Solar Integrators/ Installers Nov 2009 Conclusions Everyone who got in recently expects great things Few are prepared to handle business opportunities Most are misrepresenting / mismanaging qualified opportunities
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NEW GAME NEW RULES

Experience is not an advantage Size and Scale helps with costs, but doesnt win business Communication is critically important with customers

Local is Better Advantage to local businesses

Anyone Can Dominate by planning and executing well

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Differences

Administrative and Finance play larger roles Sales and Marketing drive the business Buyers are making a lifestyle decision, not solving a problem

Everyone in the company must sell value

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Differences

Administrative and Finance play larger roles

Sales and Marketing drive the business Buyers are making a lifestyle decision, not solving a problem Your company must sell value as opposed to service or product
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Most Important - Find Your Niche

Do residents and/or businesses already have solar? Business community Are you involved? Can you get involved? Demographics Population, Income, Culture, Education Whos competing there? Can you compete with them? Off grid Tech Companies Off-Site Power Farms / Wineries Warehouses Vacation Homes
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Control what you can control

Manageable

Little or No Control

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GETTING STARTED The Steps

Sales and Marketing Strategy Personnel planning and development Business Planning Cost Benefit Analysis

Market / Financial Analysis

Identify Target Market Company Vision Self Assessment
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CONTRACTORS
SUCCESS PRIMARILY COMES FROM ON SITE STAFF

Administrative / Finance
Installaton / Labor Sales and Marketing

ADMINISTRATIVE FINANCE SALES MARKETING

Designer(s) ACCURATE ESTIMATES

QUALITY CRAFTSMANSHIP TECHNICAL KNOWLEDGE RELIABLE LABOR

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SOLAR
SUCCESS IS DETERMINED BY EVERYONE

ADMINISTRATIVE FINANCE SALES MARKETING

ACCURATE ESTIMATES QUALITY CRAFTSMANSHIP TECHNICAL KNOWLEDGE RELIABLE LABOR

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HIRE RIGHT OR MANAGE HARD Administrative

Role is Mission Critical and Strategic

Most important communication and listening skills Will need to accurately fill out rebate and incentive paperwork Communicate and cooperate with customers, utilities, municipalities

Adaptable to changes in incentives and regulations

Should be considered part of the sales function
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HIRE RIGHT OR MANAGE HARD

Sales
Most important communication and listening skills Customers are in control of the decision and timing Present professionally not just writing estimates Salesperson has to sell the solution, not just product Qualifying buyers replaces getting leads as top priority Passion plays a major role and its out there for the taking!
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Top 5 Time Sucks For Solar Installation Businesses

1. Qualifying Interested residential customers 2. Debunking myths about solar 3. Proposals, rebate forms and other paperwork 4. Searching for the lowest equipment prices

5. Interesting or great conversations

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Stay Focused On What Is Profitable

Know what buyers ask Have answers ready Have the solution ready materials, labor, permitting, financing Know where credible 3rd party information is DSIRE, Vote Solar, local media

Learn to use technology Site assessment, quotes, rebate forms saves a ton of time and money
Dont be Afraid to Walk Away Stick with here and now buyers. No buying signs = move on Value helpful partners Distributors quality, selection, delivery, project planning
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SELLING

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How many of you have some kind of personal experience in sales?

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THE SALES PROCESS

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THE SALES PROCESS

Driving Leads are an integral part of the sales process

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Follow The Leaders

Imitation is the sincerest form of flattery -Unknown

Imitation is the fastest and easiest road to dominating in the solar industry. -Joe Boyce
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Tools and Resources

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The Most Useful Solar Technologies Are Not Just About Solar Products
More Efficient CSI Panels Simpler Mounting Systems Thin Film Bulding Integrated Solar

More Important

Financing Tools

Customer Management

Site Evaluation
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Great Solar Industry Specific Tools To Look Into www.cpftools.com

www.ongrid.net

www.clean-power.com
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Establishing Trust With Customers

Even if everything goes great, you are a stranger until you are trusted Know as much as possible beforehand Avoid low value questions Offer industry expertise Answer only the questions they ask Add people to the interaction
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Key Takeaways Plan up front Execute to your plan Budget, Forecast, set milestones and timelines Share market and industry knowledge not product Align your team, customers, community and technology around your business and sales goals Compete hard a little innovation is all you need Track your results and stay nimble

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Thank You!
Joe Boyce
Toll Free: 1(877) 331-4280 | Direct: 1(617) 312-3866

jboyce@gaiaworldwide.com Gaia Worldwide: www.gaiaworldwide.com SolarVisionaries: www.solarvisionaries.org

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