Selling Solar

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

GROWTH

Global Market Has Turned the Corner…
Proven as a “Bankable” technology
Viable alternative to fossil fuels for power generation
Considered highly scalable, no longer fringe
Energy policy and energy security being taken more seriously
Government support is very high mainly due to climate change
Supply / Demand balance has been a problem. Maybe no more
Recent price declines putting solar on par with fossil fuels

Unique economic benefits
Creates good jobs at blue collar, white collar, professional level
Stimulates economies locally– easy to target hard-hit areas
Rapid growth during global recession - positive outlier
Billions in Venture Capital raised each year - #1 cleantech sector
Stable hedge against energy prices
Grid parity will create explosive demand and economic growth
“Distributed Generation” deployable anywhere there’s sunlight

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

Surprising Growth in 2009 Beat Everyone’s 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

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 40 percent)
Strong interest (92 percent of Americans think it is important for the U.S. to develop and install solar

Business, Government, and Consumers Aligned In Their Support
U.S. is depending on solar to create jobs and economic growth
Abundant and safe source of domestic energy
Energy Security has become a major problem
Good for our environment and quality of life
Plays to Our Strength - Maintains Global Competitiveness
Provides political capital, voters from all backgrounds favor solar

“Widespread Adoption”
Government Stepping Up
FY10 $225M
Recovery act $117.6M
FY2009 – $175M
The administration and Congress have demonstrated interest and support in solar over the past several years

USA Solar Market By Connectivity 1997 - 2008

USA Solar Market By Connectivity 2009
+429 MW
+40 MW
2009

Looking Forward

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
U.S. Solar manufacturing grew 7% in 2009 despite recessions
In 2009 Solar Electricity surpassed 2.200 MW in total capacity
2009 Annual solar electric installations grew by 37% from 2008
Solar Hot Water installations rose over 10% from 2008
Solar Thermal Grew to nearly 24,000 MW
Only decline was in solar pool heating, down 10% due to housing crisis
Source: American Solar Energy Society

What About Our Biggest Competitor?

Positive: Coal remains the United States’ #1 source of energy with over 50% market share

Negative: Tragic mine collapse kills 25 injures dozens more. Massey Energy being investigated for safety violations.

Average Coal Miner Wage: (10 years experience – Kansas City MO)
$23.83 per hour

Average Coal Miner Wage: (10 years experience – Kansas City MO)
$23.83 per hour
Average life expectancy:
59 years

Are These Really The Jobs Of The Future?
Can We Really Build A New, More Competitive America This Way?

ECONOMICS

Solar Economics 101
U.S. Electricity prices increase 4% a year on average
PV Prices have declined an average of 5-7% a year for the last 20 years
Last year ASP of solar modules declined between 30 and 40%
Polysilicon, the main raw material used in well over 80% of all solar panels manufactured globally is derived from the most abundant material on earth – sand
PV O&M costs are the lowest of any major energy source
As demand grows for PV manufacturing and logistics costs are reduced
There are tens of billions of dollars invested in R&D aimed directly at reducing cost the U.S. alone
All of the solar deployed in the U.S. to date produces less than 0.5% of our annual energy demand

GRID PARITY
The point at which renewable electricity is equal to or cheaper than grid power.

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

20151% annual increase in grid electricity prices
2/3 of the U.S. is at or below grid costs
95% of the U.S. is within 5 cents a kwh

Recent Developments For
Downstream Players
Margins have shifted in your direction
Service levels are improving with higher availability of product
Rapid price declines have not been met with reduced incentives
Banking crisis led to a host of new, innovative financing vehicles
Environmental, Geopolitical, and other factors creating higher consumer awareness, stimulating demand in residential and small business markets
Vertical Integration is the trend - Manufacturers acquiring downstream partners to stabilize sales

But We Still Face Major Challenges
Consumer perception
“Solar is still too expensive”
“Only works if you get a lot of sunlight”
“Payback Period is over 20 years”
“Solar will get much cheaper, so it’s better to wait”
Incentives Are Inconsistent and Constantly Changing
Staying current can be a challenge
Many markets still lack incentives
Budgets can be spent quickly – no more cash available
Growing Competition
Highly fragmented market could create price wars
Your biggest competitor is the grid, and prices vary widely
Price Instability
Many believe they have stabilized and are starting to increase slightly already

Federal Investment Tax Credit (ITC)
30%

Federal Investment Tax Credit (ITC)
What Qualifies?
Solar PV
Solar water heating
Most Energy Efficiency Solutions

State Programs
www.dsireusa.org

State Programs

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

Financing

PACE “Property Assessed Clean Energy”
Removes a major barrier to wide scale adoption
20 year financing via special assessment on homes and businesses
Eliminates upfront costs to consumers – Biggest deal breaker
Federal/city/state/utility rebates still apply
Save money from day 1! Typically Utility+PACE less than original bill.
Noaffect city budgets or non-solar tax payers
Transferrable to new owners after certain period (usually 5 or 10 years)
Get familiar with them PACE iscatching fire across the country.

PPA’s “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
Negotiate a rate that commonly includes an annual increase
PPA provides maintenance and repairs + monitors your system
PPA gets tax benefits or State rebates or Renewable Energy Credits
Usually has an option to buy or renew PPA at the end of the agreement
You need to have an excellent credit rating to qualify
Often complicated with major tax and legal implications

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
Can include maintenance, repairs, monitoring – not always
No tax benefits or rebates or Renewable Energy Credits (RECs)
Usually includes option to buy at the end for a set residual price
Require good/excellent credit rating depending on the program
SolarCity fast becoming the 800 lb Gorilla – www.solarcity.com

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%

Gaia Worldwide Survey of Small and Mid-Size Solar Integrators/ Installers – November 2009
ConclusionsEveryone who got in recently expects great thingsFew are prepared to handle business opportunitiesMost are misrepresenting / mismanaging qualified opportunitiesDo not or are not accurately measuring results

Control what you can control
Manageable
Little or No Control

The Big Question for the startup…Where Are the leads?
Professionally Oriented Social Network
Over 20 Million Users
Background Info, Location, Work Experience
821 “Solar” Groups
Fastest Growing Social Network
Over 300 Million Users
#1 website on the web – Bigger than Google
Thousands of “Solar” Pages
“Real Time” Social Networking
Very good way to evaluate market potential
Can grow to thousands of followers very fast

If You Don’t Believe…Consider These Facts…
Facebook now gets more traffic than Google
1 out of 8 American Married couples met via social media
If Facebook were a country it would be the world’s 3rd largest
100+ hours of video are uploaded to YouTube every 5 minutes
74% of people trust peer recommendations, 14% trust advertisements

817 Members
904
Members
www.meetup.com
Groups that share a common affinity organize live events online
FREE
94
Members
33
Members

Establishing Validity
Even if everything goes great, you are just a stranger until you are validated
Know as much as possible beforehand
Avoid “low value” questions
Offer industry expertise
Answer only the questions they ask
Add “dimensions” to the interaction

What Gives You Validity?
Thought Leadership
Get Recognized as the Industry Expert
Share Market Knowledge with the community
Meet and educate groups
Get active in the community
Partner with local businesses to reach customers
Present at their facilities
Local media interviews, topical discussions
Keep your message clear and consistent across all communication

How you know you’re building a brand
People start looking to you for general industry information
Invited to speak at industry, government, or community events
Web traffic increases – time on site increases
Leads come in more complete
Someone says “I’ve heard of you guys”
Employees bring in friends / family as new customers
Media starts calling you

Great Websites Do The Selling For You

Great Web Presence: Sungevity
Leads with Solution
Highlights Customers
Interactive, fun
Easy to pass on to friends
Sign-Up for communication
Featured Solar Install
Whitehouse

Interactive Site Makes Customers “Feel It”
The Most Profitable Investment you can make
Mapping Software
“That’s My House!”
Customers walk through the entire qualification process right online!
Staff get to choose only the most qualified ones to follow up with
On-site visits down over 90% - Saves $300 per visit!
50%+ Closing Rate!

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
Continuously look for new areas of opportunity
Track your results and stay nimble
Key Takeaways

Joe Boyce
1 (877) 331-4280 | 1 (617) 312-3866
jboyce@gaiaworldwide.com
www.gaiaworldwide.com
www.solarvisionaries.org
Twitter:@josephboyce | Facebook: solarPV | LinkedIn: Joe Boyce

Selling Solar

by aquamaureen on Jul 27, 2010

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Selling Solar — Presentation Transcript