Purchasing a solar energy system can be a major decision with daunting research required before making a purchase. Solar cooperatives provide an opportunity for neighbors to become united in making purchase decisions. Learning how to best harness the sun takes time. Solar cooperatives can help put people at ease.
However, solar cooperatives are not always the best option, and can result in a poor purchase decision. Here are 7 things you should consider before using a solar cooperative:
1. The Winning Bidder Is Usually Not Local
While solar cooperatives generally favor local contractors, local applicants rarely win the bid to supply parts and installation services. As much as we all like to buy local, decisions most often come down to price or other factors. Let’s face it – price is almost always a primary factor.
Guess what – once that installer is finished with the last installation, there is rarely any real service after the sale available. They may provide required warranty services that were contracted, but timeliness suffers. They won’t likely maintain a presence in your community. And like many other companies in this industry, they will most likely not be around to service you anyway.
That brings us to the next reason.
2. Low Pricing Means Low Expectations After The Sale
Contractors that price their services so low will not have the financial wherewithal to provide service after the sale. The incentive is far too low. In fact, the number one way to go out of business is to charge too little. There is only so much good that sales volume can do.
Conversely, contractors that charge fair prices and act responsibly will put away reserves to deal with inevitable service issues. They are in it for the long haul and are focused on their reputation first.
3. Customer Acquisition Savings Is Nonsense
Organizers of solar cooperatives will tell you that the winning bidder does not have to pay high customer acquisition costs (advertising, commissions, etc.) to find cooperative members. That is simply not true. Cooperatives often charge fees to the contractor for every client they deliver, even if that client had already started a conversation with the installer. In fact, one Florida cooperative organizer charges $600 per installation!
I can tell you unequivocally – our costs to acquire a customer are far less than that.
And the idea that sales reps are not required is simply untrue also. In one cooperative we participated in, there were over 100 interested parties. 37 ultimately made a purchase. And the sales process for each of those 100 parties was equally as daunting as any regular client. Actually, it was even harder given the multiple information sessions that we had to organize and lead.
4. A Cookie Cutter Approach Is The Wrong Way To Buy Solar Panels
To make money on solar cooperatives, installers need to standardize their offering, limiting the available options to prospective buyers. Now that is also true of other installers operating outside of cooperatives, but they are not contractually obligated to stay rigidly within the guidelines of the cooperative.
Too many people buy products that are not in their best interest because they are swayed in a particular direction by the rigid rules of the cooperative bidding and operating process. Moreover, the solar contractor for a cooperative will have little incentive to tell you about other products you may prefer. They may not offer energy saving products or solar pool heaters, for example.
Solar cooperatives usually offer one or two solar panel options and one or two inverter options. That might be fine for you, but it might not. They aren’t going to tell you that!
5. Bulk Purchase Savings Is a Myth
Solar panels are a commodity, as are the related system components. If an installer is already in business and is doing any significant sales, they already have bulk purchase pricing and/or purchase commitments in place that result in the same savings. The cooperative installer is not going to access any better material prices than an installer of a similar size.
In fact, larger installers often have higher costs for labor and certainly for overhead. Smaller contractors can counteract higher material prices by running a tight ship.
6. Workmanship is Key
A solar energy system might be on your roof well beyond 25 years. Do you want someone installing solar panels on your roof after they are squeezed to offer a highly competitive price? That is a recipe for disaster. We routinely get called out to fix problems created by other supposedly reputable contractors. In fact, we recently handed a client a $22,000 bill to fix their mess. We basically had to start over.
Aside from money, the installer is also squeezed for time, having to install dozens of systems in a tight timeframe. The thought process is that this should result in economies that reduce prices. In reality, it just incentives speed over quality workmanship.
You can vet an installer all you want, but if they are sending crews in from out of town, they are likely not adequately supervised by the actual license holder. If they offered the best price or even the second best price, they have every incentive to cut corners.
7. You Are Not Supporting Local Business
In these days of next day shipping and wholesale pricing to the public, local businesses are closing their doors at an alarming pace. Some people don’t really care about that, and that’s fine. But for some industries, that is simply not an option.
Would you hire an out of town Air Conditioning contractor? What happens when your A/C goes out in the middle of August? Who are you going to call? Smart homeowners develop relationships with their electrician and plumber.
A solar contractor is just another trade contractor. We have a complex job involving other trades. We have to be experts in electrical, roofing, mechanical installation of equipment, and even plumbing. We do things that no other trades dare try. It makes sense to base your purchase decision on the relationship you are establishing with your solar contractor.
Aside from that, the actual license holder – the person responsible for your installation, should be local to oversee the installation and address any issues that arise before, during and after installation. The State doesn’t give licenses to companies. They give licenses to individuals.
Often we can meet or beat the prices offered by a solar cooperative. We appreciate that you might want to unite with neighbors. That can provide peace of mind and collective power, so the reasoning is sound. We encourage people to get multiple quotes, second opinions and do their own research.
We also ask you to consider whether a cooperative is the right approach for you. Listen to what they have to say. Attend the meetings. Educate yourself. Just be aware that it is also a sales pitch in favor of the winning bidder and the cooperative itself.
Once you have done your research, talk to us. Start a relationship. Vet us vigorously and check our reputation. And give us a chance to earn your business!
Contact us when you are ready.