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Got a Solar Broker? An old business model with a NEW twist. What you need to know before you shop with a solar broker.

How to shop for solar using a solar broker… your PERSONAL solar agent!

These days the solar industry is enjoying a steady climb into the alternative energy marketplace, and with this, an unprecedented rise in sales.   With so many buyers entering the market, sooner or later along comes a new way to inventively shop for these major investments.   Just as there are brokers for real estate investments, so too are a new breed of brokers for, you guessed it…  S-O-L-A-R!  So what makes the age old broker business model, (with a new twist) so special?  Let’s take a look at the benefits and advice of engaging the shopping services of a “solar broker”.

But first off, what exactly is a solar broker?  A solar broker is an agent-intermediary who helps a buyer shop for a solar or other alternative energy equipment investment.  Analogous to how a real estate agent would represent you with the intricacies of making a home purchase, a solar broker acts in a similar capacity to shepherd your purchase process; conducting the shopping, handling your concerns, and representing your interests to the solar companies who want win the privilege of selling you a solar installation.  And just like the real estate agent earns a commission from the seller who sold you his home; the solar broker earns his compensation from the solar company who sells you a solar investment.  But the upshot, here is the solar broker’s compensation is usually less than that of an in-house sales force.  Hence, shopping for solar just got cheaper, and definitely a lot easier for the customer.

Here’s some of what you can expect from the free services of a professional solar broker:

Benefits to the Customer:

Efficiency and Ease of Use: If time is not on your side, it will be with the solar broker, as he makes only one visit to your site, as opposed to the several site visits you’ll encounter from multiple solar salespeople.  Better yet, if your project requires multiple site visits, it’s the broker who will be there to front your interests so you can spend your valuable time doing other things.

Saving Money and Sanity: It could be said that making a solar purchase is an equivalent to buying a car or a house; it may very well be the second major financial investment you make within your lifetime.  A solar broker will do for you what you may not do for yourself, that is… give your project the objectively to see what’s behind many decisions to be made.  Brokers and their energy consultants know equipment, contracts and the inside track to their resources, including finance strategy, and price negotiation.

Financial Analysis and ROI: Solar brokers “normalize”, that is, balance out for comparison of each bid returned from three pre-screened solar companies. They discuss return on investment, cash flow, internal rate of return, and energy payback… advising buyers on which offer is best for their unique situation.  From warranty, equipment and system size, they make it easier for buyers to discern the price difference between three comparable solar companies.

For the Commercial Buyer: Solar brokers manage each process of a business owner’s transaction, sparing the owner administrative hours and decreasing work flow interruptions.  Brokering helps the organization stay accountable to its peers when one person is put in charge of shopping.  Brokering improves two way communications between buyer and seller by removing outside sales pressure.

No Salesman.  No Pressure: For many buyers the way they feel about the salesman has just as much to do with how they feel about the product they are considering for purchase.  Since the broker removes the perception of “being sold”, there’s more room for trust and communication, then folded arms and deflecting sales pressure.

No Catch.  No Strings: The broker mentality is refreshingly UN-sales.  They take great JOY in placing their ethics and allegiance with the customer.  Why?  Because the chance of closing a sale is much higher when a buyer works with a broker than with a salesman; this due in part that the broker has a three in three chance of their buyer making a purchase, compared to the one in three chance of the same buyer making a purchase with one out of three salesmen.  This virtue alone is one of the BEST reasons a broker and a buyer make such matrimonial bliss in the solar shopping marketplace.

Ethics and Impartiality: By its very nature brokering lends itself to an impartial way of doing business.  Similar to how a real estate agent represents his client’s interests in shopping for a home; the broker too practices the same advocacy in making sure his buyer gets the best price, terms, and conditions for his money.

Overall Satisfaction: Most buyers report overall greater satisfaction and peace of mind when they have a representative on their side of the table.  After all, most purchases are made on emotion, and later back filled with logic, like saving money.  But it’s the path to getting there that leaves the buyer with a gratifying experience.

Benefits to the Seller:

Positive Pre-qualification: Brokers save solar companies time in locating earnest buyers.  It’s the broker’s expertise that weeds out the serious from the mysterious tire-kicker.  In order for a buyer to be considered for representation he must first demonstrate commitment toward to shopping process.   Similar to a mortgage broker pre-qualifying his buyer to purchase a house, like credit score, employment verification, and bank statements; the solar broker pre-qualifies his buyers by visiting the site, assessing it for appropriateness, collecting utility bills, and other pertinent data before putting out the project to bid to multiple companies.

Better Closing Ratios: Statistically, solar salesmen have a success rate of closing approximately 17% of their transactions, this in part because he has an only one on three chance of winning his customer when he is typically shopped against two other competitors.  Whereas, the solar broker has a much higher reward ratio… a three in three chance for most every transaction.  Even with some sales falling through the crack; that’s still a 75% closing ratio for delivering the product to the buyer with a higher rate of customer satisfaction for getting the job done right the first time.

Acquisition Savings: The average solar company saves 6% in marketing costs when it uses a broker. How?  The broker pays for his own marketing and advertising; he reduces the need for salespeople; he decreases overhead expenses, like insurance, sick days, office equipment, along with car and gasoline maintenance and expense.

Increased Profits: Because the broker makes it more profitable and efficient for the solar company to do business, these savings may be passed along to the buyer in the form of better pricing, and to the solar company in the form of increased profit margins.

Protected Margins: The solar company’s profit margin is protected, and motivation to participate in bid proposals rise dramatically, as the broker can limit bidding wars by restricting requests for proposals to no more than three.  The broker helps his buyer understand the value of keeping bids to a limit of no more than three to avoid chasing away quality companies, and to prevent price cutting to the sacrifice of material quality just so a bidder can win the job.

More Efficient Sales: The broker increases sales efficiency and prevents “failed sales syndrome” by keeping communication alive, and helping to overcome buyer objections that may not be shared with the solar company if it were not for the broker to act as agent-intermediary.

What to Look for In a Solar Broker:

A broker should have at least one year of experience as a solar salesperson, including a hands-on history of working on installations. Or, the broker should have access to a certified energy consultant that works with him on all projects.  If this is the case, the client MUST be introduced to the energy consultant and made a part of the working relationship between buyer, broker and energy consultant.

Certifications and training that build credibility and expertise are excellent ways to ensure your broker and/or energy consultant is qualified to represent you.  Examples of knowledge base are:

NABCEP certification (North American Board of Certified Energy Practitioners).  Check out their website at:     http://www.nabcep.org/
CABEC certification (The California Association of Building Energy Consultants).  Check out their website at:     http://www.cabec.org/

Ask your broker for a list of client references, and call ALL of them. Your goal is to get their honest to goodness feedback on their experience with your broker.  You want to make sure you have an ethical broker on your side, and not a shady one who may be sharing bid prices to help one bidder come out the winner, or playing BOTH sides of your transaction.  Also, ask for a list of client references and the current license numbers of the solar companies your broker uses.  You can easily check these contractor licenses within the state you reside.

If you have any questions as to whether or not your pricing is comparable to what your broker has located for you, then you are free to call for two additional bids on your own.  But beware, as you may find that prices may be higher or lower that the estimates your broker has given you.  Why?  Because you will likely not receive an accurate portrayal by simply calling up and getting two more quotes over the phone, and most solar companies will tell you it’s not that simple, and this much is true.

Solar estimating is a subjective process to each different company’s analysis software, equipment quality, processes, overhead, and many other cost factors.  So be careful when scrutinizing on your own.  You may find that you will have confused yourself even more; creating more distress, than ease of mind.  Overall, it’s much better to communicate any hesitations you have with your broker BEFORE trust is tested.   Any reputable broker will understand your misgivings and take you seriously in resolving your concerns.

In Closing…

As the solar electric and solar thermal industry continues to grow in popularity, so too will the number of brokers who will represent the interests of discerning and savvy buyers who want a professional sitting on their side of the table.  Solar brokering can be a rewarding way to bring buyers and sellers together for the good of many, including the consumer, the solar industry, and the economy.  Not to mention, fostering energy independence, cost savings, and most of all to support the cause of a healthier world environment.




Article by Jennifer Coleman of Sun Source Solar Energy Brokers, Solar Sonoma County, California.

Reference:

“Brokering For Reducing Costs and Increasing Customer Satisfaction in Solar Sales” by Andy Black of On Grid Solar Energy Systems

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Sun Source Solar Brokers
525 East Cotati Avenue, #220
Cotati, California 94931
707-888-7046

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