selling solar
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Some Good Solar Industry Data and Tips for Increasing Solar SalesTRANSCRIPT
April 5, 2010
Selling Solar
How to enter, compete and win in the solar business…
April 5, 2010
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
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Selling Solar
GROWTH
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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
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Selling Solar
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
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Selling Solar
Source: NREL
Global Growth in Cumulative Capacity
Germany Remains #1. Spain surpasses Japan and US in
2007 Due to New Feed-In Tariff
United States ranked
#4 in total installed
capacity in 2008 with
around 1.2GW
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Selling Solar
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
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Selling Solar
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
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Selling Solar
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. Provides political capital, voters from all backgrounds favor solar
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Selling 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
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Selling Solar
USA Solar Market By Connectivity 1997 - 2008
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Selling Solar
USA Solar Market By Connectivity 2009
+429 MW
+40 MW
2009
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Looking Forward
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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
• 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
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What About Our Biggest
Competitor?
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Selling Solar
Coal!
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Selling Solar
Positive: Coal remains the United
States’ #1 source of energy with over
50% market share
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Selling Solar
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.
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Selling Solar
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
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Selling Solar
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 life expectancy:
59 years
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Selling Solar
Are These Really The
Jobs Of The Future?
Can We Really Build A
New, More Competitive
America This Way?
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ECONOMICS
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Solar Economics 101U.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
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Selling Solar
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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Selling Solar
2/3 of the U.S. is at
or below grid costs
20151% annual increase in grid electricity prices
95% of the U.S. is
within 5 cents a
kwh
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Selling Solar
• 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
Recent Developments For
Downstream Players
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Selling Solar
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
But We Still Face Major Challenges
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Federal Investment Tax Credit (ITC)
30%
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Federal Investment Tax Credit (ITC)
Solar PV
Solar water heating
Most Energy Efficiency Solutions
What Qualifies?
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Selling Solar
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 220
New Jersey 57
Florida 36
Arizona 23
Colorado 23
Hawaii 14
New York 12
Massachusetts 10
Connecticut 9
North Carolina 8
Other States 29
Total 441 MW
Cumulative Capacity
California 1102
New Jersey 128
Nevada 100
Colorado 59
Arizona 50
Florida 39
New York 34
Hawaii 27
Connecticut 20
Massachusetts 18
Others 78
Total 1,653 MW
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Selling Solar
Financing
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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.
• No affect 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.
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Selling Solar
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
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Selling Solar
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
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Selling Solar
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
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Conclusions
Everyone who got in recently expects great things
Few are prepared to handle business opportunities
Most are misrepresenting / mismanaging qualified
opportunities
Do not or are not accurately measuring results
Gaia Worldwide Survey of Small and Mid-Size Solar
Integrators/ Installers – November 2009
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Selling Solar
Control what you can control
Little or
No
Control
Manageable
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Selling Solar
The Big Question for the startup…
Where Are the leads?
821 “Solar” Groups
Professionally Oriented Social Network
Over 20 Million Users
Background Info, Location, Work Experience
Fastest Growing Social Network
Over 300 Million Users
#1 website on the web – Bigger than Google
“Real Time” Social Networking
Very good way to evaluate market potential
Can grow to thousands of followers very fast
Thousands of “Solar” Pages
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Selling Solar
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
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www.meetup.com
Groups that share
a common affinity
organize live
events online
FREE
817
Members
904
Members
94
Members
33
Members
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Selling Solar
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
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Selling Solar
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
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Selling Solar
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
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Selling Solar
Great Websites Do The Selling For You
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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
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Selling Solar
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!
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Selling Solar
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
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Selling Solar
Joe Boyce
1 (877) 331-4280 | 1 (617) 312-3866
www.gaiaworldwide.com
www.solarvisionaries.org
Twitter:@josephboyce | Facebook: solarPV | LinkedIn: Joe Boyce