According to recent reports, the demand for solar energy for the home has skyrocketed in 2020 Bloomberg New Energy Finance (BloombergNEF) research, in which US residential solar installations are up 21% in the first seven months of this year compared to the same period in 2019. And in the fourth quarter of 2020 Solar Market Insight Report, Wood Mackenzie and SEIA project that the U.S. residential PV market will grow 13% by 2021 by 2020, and longer-term growth of 10-15% between 2023-2025.
Much has been said about the potential for roofers to take the plunge into diversifying their business through the installation of residential PV systems. However, we have yet to see widespread adoption.
The opportunity for contractors to diversify their business is clear and the contractors who take advantage of this opportunity are sure to scale their business and set them apart from their competitors. Why is now the time to move forward?
1. 75% of US roofs are made of asphalt shingles and the average life of an asphalt shingle roof is 15-20 years.
Depending on how old the roof is at the start of a solar installation, it may need to be completely redone before solar panels are installed. The average life of a residential PV system is 20-30 years, which means that the average asphalt roof needs to be replaced sooner than the system it is under.
2. In fact, 20% of residential solar system jobs are not completed by the installer because the house needs a new roof at the time of installation.
Often times, residential solar companies avoid underlying roof projects because they don’t specialize in that area and have the bandwidth to run such a time-consuming process. However, roofers can handle this aspect of solar installation just fine.
3. One EagleView report supports both roofing and solar, and the transition between the two:
EagleView’s Inform ™ products provide data to enable both solar and roof planning and sales activities, such as azimuth, slope and location of roof obstructions, as well as a summary of the roof covering with suggested waste factor calculations.
One report, two jobs and less time on the roof.
4. There are several ways for roofers to enter the solar market, which means you can start small and work your way up.
To go from the easiest / least profitable to the biggest overhaul (and thus most profitable) these are:
- Sell the lead to a partner. You can just ask the homeowner if they’ve ever thought about solar power, and then sell that lead to a solar installer. As a roofer, you know how old the roof is, either because you installed it or you can just see that it is getting old. This makes the lead more valuable than that of any other lead source. By selling these simple leads (roof age plus customer contact information) you can generate additional income and create tons of new leads.
- Selling a convinced home owner to a partner. In this case, the contractor can go through a more thorough qualification process to ensure the homeowner is in a good position to transition to solar, and then sell that qualified lead to a solar installer. Since the homeowner has expressed interest, this qualified lead would include information such as qualification for federal solar tax credit, purchase motivation, name of the electric company, and some amount of usage information and the age of the roof. Since this step involves removing the ‘bad’ leads, it will yield a smaller number than step A, but will also generate more revenue per lead.
- Basically selling a PV system and giving it to a third party to installespecially if your business sells more than it can install. This is where your business starts to make real money, and in turn can develop a close partnership with a solar installer.
- Sell and install the system yourself. While this takes the most effort for your business, it is almost pure profit. This way, you can create a solar energy business in small steps, and as you learn and gain more experience in the industry, you will be well on your way to significant revenue streams.
Another benefit of bringing solar panels to solar installers is that they, in turn, will bring roofing cables to you. This doubles the benefit for both companies and can improve the relationship even further.
5. When you go to the location of a potential roofing project, you will not be able to determine the age of the roof, so selling and installing it yourself is a much more effective solution.
If you’ve done thousands of installations, you know how to determine the age of the roof, which makes the process much easier. For example, if a contractor knows that the roof is 15 years old, he can offer the homeowner a new roof plus a PV system and a financing plan that covers both.
As solar installations increase, in addition to storage – which is another source of leads you can sell to the solar installer – securing this additional revenue stream will be critical to growing your customer base and building your bottom line.