Lead Generation and Outlook in Residential Solar Competitive Market
Written By: Katherine Demetre
October 6, 2017
Ruben Ugarte, Director of Business Development, Horizon Solar Power
Ruben is a self-proclaimed solar junkie – his passion for pv and all things renewable has led him to a career in expanding rooftop solar. He supports the growth of this industry by developing key relationships that generate and increase sales velocity, allow access to new markets and partnership opportunities, and gives his organization the marketing edge by staying in tune with all things solar and customer acquisition focused.
His family owns a roofing company in Los Angeles, which has given him a strong build background with a high respect for the roof. He previously worked at RGS Energy (Real Goods Solar) as a residential and commercial sales rep. before joining Horizon Solar Power as their Business Development Director in 2014.
LEAD GENERATION AND OUTLOOK IN RESIDENTIAL SOLAR COMPETITIVE MARKET
Stratton Report: How would you categorize the current state of the residential solar competitive landscape?
Ruben Ugarte: I would say it’s exciting, robust and full of potential. Of course, if you read what the media is suggesting in a nationwide solar is in a free fall but I think that’s just really a macro look based on past sales performance from the really large solar providers who have dominated the headlines for this last solar boom. Doing a lot of smaller regional players that have strong business models and are really continuing to maintain profitability, they know their backyard, they can relate to home owners within their state and their county and their city and much more than a national provider that come and establish shop as we’ve seen so many times. So I really think the long tail has voiced off for a lot of benefits of solar plus storage for future customers and really residential solar is a long play and those that can learn from our past will be better positioned for tomorrow’s opportunity.
Stratton Report: Over the past year, players in the residential solar market have been reassessing their business models in light of new market dynamics. What new strategies and business models are being considered to respond to these market challenges?
Ruben Ugarte: I think the days of growing without making money and having okay customer service are gone. And that’s a good thing both from the constructor’s perspective and really for the many, many homeowners who have solar on their roof or have looked into solar but have not moved forward and there’s a whole lot of those. What solar is going through right now, it’s nothing new. There’s a lot of industries that face the same type of challenges. Previously, we learned from our mistakes. We maintain focus on customer service and continuing offering a great product at a competitive price and solar can save homeowner’s money and a lot of stakes and have a predictable cost of power. I think that’s the basis of what we do and that’s not gonna change. What is changing is the spending habits of companies and the focus on profitability. Make before spend is a great way to stay in business and attention on new strategies is key. We’re seeing and we’ll continue to see a lot more solar companies partnering up with retail and non-energy related subscription services such as cable, automobiles, wireless, that’s gonna lower their cost of acquisition and really align their brand along with solar with a much more larger household name. And this is a good thing. I think it means solar has arrived and large Fortune 100 companies see the value in this long term offering and in general, we’re here to stay.
Stratton Report: So I know that one of the areas of your expertise deals with kind of lead generation and customer acquisition. So in terms of the needs of a solar company, what are the top three things that a company needs to look for when considering a lead generation program or in partnering with the lead generation company?
Ruben Ugarte: It’s like a game show like your top three things for a solar company in lead gen. And so really number one is TCPA compliance and/or the ability to have a true opt-in. And what I mean by that is too many times in the solar, we’ve contacted people who may or may not have inquired about solar, and this has created a really bad taste for a lot of potential customers and had really put off a lot of homeowners who may otherwise have gone solar. So I think when you look at structuring a lead gen program, you have to look at being able to get homeowners excited and have them learn and understand their savings potential. So all in all I think the number one thing is making sure that your marketing program is actually targeting and focused on homeowners to get them excited to move forward and really get to the table at solar, so that’s number one. Number two, I think it’s the ability and the vision to work with your lead gen partners or whether it’s a lead company or marketing firm. Having the ability and vision to work with them in a long term basis and vice versa. There’s so many fly by night solar marketing offerings and so many options out there that you really need to vet to the 10th degree the ability of your marketing partner or generator to work with you long term not just on this initial insertion order. Will they be there tomorrow? Will they hold themselves accountable if you collectively don’t hit your COA targets? You have to ask the tough questions upfront and really get it out of the way to be better off for it and have a really good understanding of how your partner will react from come crunch time when maybe the numbers didn’t hit to the expectation. I would say that’s number two, the ability and vision to work with your partners’ long term. And then number three is when you choose a marketing channel to fund whether it’s paid leads or filled marketing or digital or radio or television and so many different channels, you really have to look at the program and ask yourself, did this encourage referrals after the sale? Is the customer process within the marketing program an enjoyable experience for the customer? Is it something they’re gonna be excited to share your name and your experience with others. Some marketing programs do this really, really well and others not so much. So if you can make a journey from the interest level to install a really enjoyable educational experience, your customers will be raving fans to help you lower your cost of acquisition by bringing their friends, family and co-workers right to your inbox for your charge. So I think those are the top three.
Stratton Report: So there’s only so many customers in the solar market that can develop into real hot leads for installers. What do you think will be to remain competitive in the years ahead in that market?
Ruben Ugarte: Yeah. I think going back to question number two, we really have to make a stand. This is the key to the current solar providers including us staying in business today and tomorrow. Work instruction based offering, yes, we’re energy, yes, we’re tech but at the end of the day, we need to roll trucks and we need to put boots on the roof to get the job done. Unlike a lot of other scalable industries, the value is–unlike other industries where the value is in like an app or an online widget or a handheld hardware device. We as solar installers don’t and can’t think of our business goal as the same. We are in construction and because of this we need to think of scale in terms of like longevity, 5, 10, 15 years down the road and really repeat business. Having great customer service should be really number one priority along with keeping cost low and if you’re able to do that overtime, businesses will scale naturally and customers will just by nature gonna flock to your brand.
Stratton Report: Going back a little bit more to kind of the options that are out there for your residential customers, what are the most common financing options for residential customers in the market today?
Ruben Ugarte: It’s really a broad landscape. There’s a lot of different options than ever before. All good things if presented in the right way. The product of choice is still the power purchase agreement or PPA, shout out to Sunrun who we use along with the lease option. The adoption of the solar loan has really increased in a lot of different markets including California as well as PACE or what’s called Property Assessed Clean Energy. Cash purchases is still a go-to for a lot of homeowners who are looking for ROI. The best part is that there’s a lot of different finance options and within each finance type, there’s a lot of strong and multiple providers that are competing for installers business. And this allows us as installers to kind of lower the dealer fees, increase customer service and ultimately we hand the saving back down to the customer in lower pricing and which increases ROI on solar energy.
Stratton Report: You have a unique perspective because you know both sides of the market. What does the residential market of the future look like from the customer side and from the installer perspective? What do you see happening down the road?
Ruben Ugarte: It’s gonna be sunny, very sunny. We’re in solar, so I won’t begin to predict the future but I will say that residential solar is here to stay and with lower product cost and increase knowledge at all levels of installation. Customers are gonna find going solar a much more enjoyable experience and far more streamlined than we were yesterday. On the installer side, we’re poised to really support the next wave of solar adaptors with still very low install penetration rate that’s compared to the actual numbers of homeowners nationwide. I think solar has a large field ahead of it and we really believe that an industry will rise to the occasion and be ready once that tipping point comes our way.
Stratton Report: And staying a little bit on the installer side, what do you think the role will be for large national players versus regional and local installers? How will that change in the future? How will that come into play?
Ruben Ugarte: That’s a really interesting question. Not sure how to answer since I think with the landscape is so intermixed than ever before, but I believe in the brand awareness of large players like ourselves, along with Sunrun, SunPower, Tesla coming from a small family roofing business in Los Angeles, I see the opportunity and he commitment from a lot of the smaller firms who aren’t concerned with scale but still do a really great job on their 3, 4, 5 installs a month. All in all, I think both the large national as well as smaller regional firms will have success but it’s really being dependent on how they micromanage their customer facing experience whether that once again be at a state, at county or even in like your local city level. Both large and regional need to continue to support, push forward the growth of the solar industry. It allows us to expand the use of solar technology and we just need to do this and continue to do this at the same level. I know being here in California, this is something that is just kind of part of our California ethos. At Horizon, we’re members and we support CALSEIA and SEIA, Solar Energy Industry Association. They do a lot of work for us at the capital and federal levels that valuable. I think every installer needs to be part of these types of organizations that support our mission to expand rooftop solar, and whether that’d be through policy development, advocacy, education or just overall networking, I think in general that’s how both the large and small players can help push our future forward.
Stratton Report: Let’s move on to solar plus storage. Do you expect residential solar-plus-storage to achieve widespread adoption in the market? And if so how will that impact your business?
Ruben Ugarte: Yeah, we do. Solar plus storage is here. We began internally to align ourselves with storage providers both on our operations and our sales team. We’ve taken the time to understand the process, get informed on how the next wave of offering will impact our business model. It’s important for a lot of installers not to just jump in and start offering storage without having the true understanding of how it’s gonna affect our current process both on the sales and the offsite. We kind of use especially here in California changes within the investor on utilities. We see storage being a fundamental addition to the clean energy offering or really entering into a new era where solar won’t be just a standalone product. It’s gonna be coupled with storage and other energy efficient options that really give the homeowner a holistic peace of mind and really give them the control over their energy cost not just having solar on their roof.
Stratton Report: Thinking a little bit broadly again, what do you see as the biggest opportunity and the biggest challenge in 2018 for the residential and commercial installers?
Ruben Ugarte: Yeah. So I think the biggest opportunity and the biggest challenge is the ability to stay focused on the customer and providing value to them at every level of the installation process. This is and will continue to be the biggest opportunity for installers and it applies to both residential and commercial projects. I wish I could give a more complex answer but I think we really need to for lack of better word dumb it down and really stay focus on our customers and really listen to them. I don’t think customers want to go through the same experience that a lot of them have gone through over the last five years. I think a lot of solar companies have matured in how they sell as well as service customers. And I think if we can continue to refine that, I think we’re going to be ready to take on the masses when that time comes.
Stratton Report: Let’s move on to technology. What technologies would you say are impacting residential solar and how are they changing the game? Are there any technologies that you’re seeing with big trends out there?
Ruben Ugarte: Yeah, so coming fresh off at Solar Power International 2017 (SPI), it’s always a great part about these types of conferences, you get to see all the cool and new gadgets that are out there. Panels who hire efficiency is always a good thing. We just talked about storage. There’s a lot of coating tools that have gone very advanced and really given a lot of the sales team the ability to quote out multiple financed types very quickly. It’s always convenient when you’re at the kitchen table as well as over the phone or screen sharing and you’re able to show or advice the customer on multiple options that could save them versus having a reboot in a different finance portal every single time. So I think that’s intriguing. I think also after the install, the monitoring platforms, those are great. There’s a lot of homeowners who have already gone solar and the post install is really important especially if you’re looking to drive low cost referral business. I like the contest out. I haven’t used them first hand but I think having the ability to monitor your production, usage, high charging, your air conditioning load and then being able to have like a simple visual calculation on your phone that tells you how much money you’re saving in real time. I think that’s gonna be the norm over the next decade, for sure.
Stratton Report: For our last question, I want to go little bit extra broad for you and talk about what’s going on a national level. So the federal administration plans to roll back some of the environmental regulations that we’ve had, paving the way for an increase use of fossil fuel. So the lower the cost of fossil fuels, the harder it is for solar and other renewable energy sources to compete. Also the Federal ITC is winding down. How will this, if at all, impact your organization’s business?
Ruben Ugarte: It won’t. Solar can’t be stopped. There is too many smart and ambitious professionals working daily to the move us forward that regardless of what happens at the policy level, our industry and our product offering will continue to appeal and become a widespread adopted household product. I’m an optimist by nature and obviously I love and work in this industry so I’m gonna say these things but I mean, it’s true. In regards to the ITC expiration, I think this is a good thing. Tax credits are in placed to do exactly what they’ve done for our industry in the US. It’s a lot of very small technology that was high priced to be driven down at much lower cost that has spurred massive adoption. By 2021, this will be evermore true and I think we as an industry will and should be positioned to offer cost savings with solar without the tax credit. And I think in general from an economic perspective, I mean, that’s the essence of having these types of subsidies, these types of tax credits. This has allowed us to employ so many people in every state nationwide. It’s helping empower people to challenge what they know to be the comment. I can only buy my energy from the utility. Now they’re like, “Hey, I have options.” I mentioned at SPI on stage when we had our panel that we as consumers especially here in the US were so used to having options and being able to go–if you’re shopping for a cell phone, you’re shopping for a car or even if you’re looking for cable. You have so many different options and different price points and packages that you can actually shop with energy which is a massive part of what we need to live. We don’t have any options so that’s just weird and I think it’s just great that solar has grown up to the point where not only do we have options and people are interested in going solar. They’re now far more educated than they were 10 years ago and a lot of people are waiting to go solar and have either looked into it or have heard of it and there’s more homes on the street with solar panels on, you become more inclined to go, “Hey, let me look into it.” I don’t see anything stopping the solar train and I’m excited to be part of it.
Stratton Report: All right. Well, Ruben, these are all the questions we have for you but before we conclude, is there anything you haven’t had the opportunity to share that you think is important for our audience to hear?
Ruben Ugarte: No, I think we covered a lot and I really appreciate the opportunity. I think that as an industry, coming from the roofing industry like I mentioned and into solar, I mean, I really got into solar for really the freedom portion of it. I really just believe in people having choice and having freedom from high cost and things that are just placed on them. And I think we are at a point where we’ve hit some bumps in the roads and there’s been a lot of issues recently but overall, it’s an industry we’re a lot smarter, we’re a lot stronger and I just encourage everybody who’s reading this or watching this to just continue to be optimistic, do what they do within their own company or within their own state and 10, 15, 20 years down the road, we can look back on this era of solar and go like, “Wow, like back then it was so different than it is now and there was so few people who have gone solar.” So I’m just excited to kinda continue to climb the mountain with all of my peers.
We also had the privilege of interviewing Ruben Ugarte at Solar Power International 2017. Watch our exclusive video interview below:
What are the key factors that are needed to successfully manage the marketing and customer acquisition costs for the residential market?
What strategies for acquiring residential customers are gaining traction in the market?