Solar customers rely on commission-focused, unqualified salespeople to recommend the best PV system for them. Surely, says Sophie Wright, there has to be a better way.
Residential solar is booming, offering everyday people the opportunity to own a little power generator on their home. Like many booming industries where government incentives and rebates are offered, cunning “cowboys” begin to enter. These ruthless operators not only take advantage of customers but can also tarnish the industry and cause discredit to ethical operators. Some liken the industry to the pink batts saga, and no-one wants likes that comparison.
As an industry, what are we doing wrong and how can we fix it?
To create a sustainable (no pun intended) industry it is vital that customers are educated. The regular customer begins looking at solar for a variety of reasons – usually to save money on electricity bills or to do their bit for the environment. We cannot expect them to know exactly how solar works and be experts in system design. It is our role to educate them and provide a high-quality system that will suit their household requirements now and into the future.
Customers will often request a 6.6kW system from a retailer or installer because they have heard from someone it is the system size they need. Or sometimes, even potentially worse, they will request “the biggest that will fit on my roof”.
Many solar businesses are quick to respond with a standard cookie-cutter package or the largest that will fit based on an aerial image of someone’s roof. This happens when solar business owners, installers, retailers and salespeople all want to make that quick dollar just by selling solar – and selling solar fast. But what if, as an industry, we start to think about what we do not as simply selling solar but as providing a solution to our customers.
Most customers will base their decision purely on price – after all, a 6.6kW system is a 6.6kw system, right?
It is up to us as an industry to analyse each customer’s usage profile, determine their future energy needs and then explain why the system sizing, design and components are best for them and their situation.
If the customer is able and willing, then set up system monitoring and educate them on how to use it. This prepares them for future energy independence, knowing when to use their power to get the best out of their solar system. It will also show them if the system is doing what the salesperson promised it would! Without system monitoring, a customer is installing solar in the pure hope that it will do what they want it to.
It takes much more than a 30-second conversation for a salesperson to work this through with a customer. It is vital to establish why the customer wants solar in the first place and to be curious enough to explore their unique scenario, their present reality and the future needs of their home and lifestyle. This will take a salesperson a lot longer to work through initially but will mean a far, far better result, not only for the customer but also for the longevity of each business and for the industry.
The other significant factor to consider is the customer’s ability to export to the grid. With falling feed-in tariffs, educating customers that bigger is not always best is essential. It would be a very rare case now for anyone entering the solar game to make money on their electricity bills like they did in the days of premium feed-in tariffs.
Financial incentives for exporting should now be considered a bonus rather than an income potential, and if any customer is coming to solar for this reason alone, it absolutely requires a conversation around how to make solar work instead through self-consumption as the priority.
Now let us consider who is actually selling solar systems. The solar industry has layer upon layer of compliance requirements for solar installers. There is a plethora of solar standards and regulations, Clean Energy Council accreditation requirements, OH&S processes and yet nothing for salespeople!
As long as salespeople are employed by a retailer or installer that meets all their requirements, anyone can sell solar. Many large retailers will have salespeople who then send jobs to designers. In smaller operations it may be the business owner who does the sale, the design and the install. Or some businesses may employ a salesperson to sell the system, which is then installed by a qualified installer who also signs off on the design.
When we consider that, aside from making the initial decision on which solar retailer or installer to engage with, whoever the salesperson is is actually the point at which the customer makes their purchase decision! Potentially, this means a customer is making a decision to proceed with solar based on a conversation with someone who does not actually have any relevant qualification or idea of what they are talking about.
This is a major gap in our industry. We should consider an industry requirement in which technical accreditation is required as a minimum for all solar salespeople. Ethics and sales skills could perhaps be added to an existing accreditation, such as the CEC grid-connect design course as a minimum for anyone discussing solar sales or design with customers.
Furthermore, the person who makes the sale should then be the one signing off on every single design, not the installer, who may be handed a job to install from a retailer or salesperson. They would sign off purely on the design, except of course in the instance where the installer is the salesperson. That way, the salesperson in fact is also the designer.
This creates salespeople who are accountable and lends credibility and knowledge to our industry. Most importantly it is one way for customers to be assured they are speaking to someone with the appropriate knowledge skills to design the system and to educate the customer at the same time.
Imagine what that would do for our industry.
We should also consider exactly how salespeople are paid. Typically, no matter what the industry or product, salespeople are largely, if not solely, paid commission.
What is therefore the obvious correlation when you combine a commission-based salesperson striving for the biggest pay cheque with the system size that they are selling? The result is big volumes of big systems. However, this is in an industry where technical design is required! This is an industry where export limitation can mean a bigger system is never fully utilised.
With a commission-based structure, the real risk is that, when designing a system little consideration is given to specific household needs. The salesperson is driven purely by how much commission they will receive.
As a point of contention, consider what would happen if we removed commissions. This would be another step in ensuring systems were designed based on customers’ wants and needs. For the salesperson this is a far longer process, but the result is an educated customer and a system that will meet their requirements. It helps to create an industry where customers get the system they want, so there are no mutterings that “solar didn’t save me money” or “solar is a scam” because someone hasn’t been sold a system just because the salesperson was after higher commission. It seems like an obvious win-win for customers and the industry.
It is difficult to know what the perfect pay structure is, as commissions generally drive sales. Perhaps changing to a flat commission per sale and removing commission based as a percentage of price is enough. Or perhaps a purely salary-based arrangement could work. Ultimately, though, salespeople working without commissions (and who, remember, now are accredited designers) are not at the mercy of the ebbs and flows of the industry. Their driver is to be the most knowledgeable at meeting customers’ needs to make a sale. The better they are, the more they can command as a salary.
Ultimately, if we consider making solar salespeople accredited and removing percentage-based commission structures we are one step closer to building a reputable industry. We would have knowledgeable customers who understand the solar systems they are buying and are confident in the sales and design process. Imagine what will happen to the cowboys then.
Cover image by Solar Sphere - solarsphere.com.au