Solar companies battling Tesla through door-to-door sales

Even as Tesla has switched to retail-based solar installations, many companies installing solar panels for homes still hang on to the tried-and-tested model: door-to-door sales.

By: Bloomberg | Published: December 18, 2017 6:23:53 pm

Rooftop solar installations, Tesla, door-to-door sales, Elon Musk, Vivint Solar, SolarCity, eco-consciousness, solar systmes, Silicon Valley, pro-solar mindset Finding new sales is a constant issue for residential solar companies, especially now. (Image Source: Bloomberg)

It wasn’t a flashy ad or Elon Musk’s charm that convinced New Jersey firefighter David Philpott to get solar panels for his home. Instead, it was a neighbor’s recommendation and a visit from a door-to-door salesman. Knocking on doors may seem old-fashioned, better suited for encyclopedia salesmen of decades past than for peddling a high-tech product in the Internet age. In fact, just this year, Musk’s Tesla Inc halted door-to-door solar sales. But other companies remain committed to the traditional ways, notably Vivint Solar Inc, a panel installer that still counts on ringing doorbells for almost 90 percent of its sales.

“It’s always been our bread and butter,” David Bywater, chief executive officer of the Lehi, Utah-based company, said in an interview. “It’s a very consultative sale. It’s a very large purchase by a consumer.” Finding new sales is a constant issue for residential solar companies, especially now. After 16 years of growth, US demand is contracting and investors have grown impatient with unprofitable companies. Vivint installations have been mostly flat in 2017, while Tesla is adding far fewer systems this year than its SolarCity unit did before it was acquired a year ago. While many early customers were eager to go green, installers are now reviewing their marketing strategies, looking for the best way to reach people who might need more encouragement.

Sceptical: that’s how it was for Philpott, 55. He’d been curious about going solar. A neighbor had recently installed panels and his daughter had been encouraging greater environmental consciousness. Plus, he’d heard that a no-money-down lease would save him money and he figured solar would make his home more valuable. But all the information he found online was hard to make sense of. “People don’t get why there’s no cost,” he said. “They’re skeptical.” So, when Vivint salesman Kevin Powell knocked on the door, Philpott and his wife were already in a pro-solar mindset. Powell had signed up Philpott’s neighbor, and after explaining all the details, he signed up Philpott too.

Solar systems aren’t a simple sell. They’re expensive, there are a lot of regulations and incentives to wade through and customers have to live with the decision for years. That’s why an in-home visit can be so important, said Tyson Peschke, an early employee who helped develop Vivint’s door-to-door strategy. “Door to door sales will always be a vital part of the solar industry,” said Peschke, who has since left Vivint and co-founded Blue Raven Solar LLC, an American Fork, Utah-based rooftop installer.

Rooftop solar installations, Tesla, door-to-door sales, Elon Musk, Vivint Solar, SolarCity, eco-consciousness, solar systmes, Silicon Valley, pro-solar mindset If customers are interested in solar, Tesla will then arrange a site visit. (File Photo)

“You have this Silicon Valley idea – that you’ll go from two users to 10 million overnight with their technology, and with no human interaction whatsoever,” he said. “Average Joes won’t go in that direction. Solar is an in-home consultation.” While Tesla isn’t sending salespeople door-to-door – it’s a luxury brand – it still does in-home consultations. Tesla on Friday began marketing solar at some of its retail outlets, where customers can also buy its electric cars and home-storage systems. If customers are interested in solar, Tesla will then arrange a site visit.

Still, most potential customers still need a home visit. And even if going door-to-door feels outdated, it works. “Investors want to see profitability,” said Hugh Bromley, a New York-based analyst for Bloomberg New Energy Finance. “They’re willing to see the company invest in marketing so long as it delivers a profit-bearing customer in the very near term.” Vivint expects to be cash-flow positive next year. There aren’t many alternatives to door-to-door sales, according to Peschke.

“The problem has been door-to-door sales took off, and no one has come up with the next thing yet,” he said. “The big solar companies don’t have the resources to reinvent their sales channel.” Rooftop solar companies have developed numerous online tools to help convince people to install panels and generate leads. But this strategy is often more expensive than door-to-door if it requires installers to buy leads of potential new customers. “I believe in door to door,” Peschke said. “I believe it will grow. But I hope for the sake of the industry that it will be supplanted by something better.”

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