Subway billboards. Google ads. Tupperware parties.
A growing number of solar retailers are turning to some tried-and-true strategies to entice would-be buyers to plunk down a good chunk of their savings to install solar panels on their rooftops.
SunWize Technologies is the latest to try a familiar strategy: getting existing customers to hold neighborhood parties to promote SunWize's installation service. In return, the party host gets a cut of the sales, while neighbors and friends are entitled to discounts if enough of them place orders.
It's a type of outreach that generally could require more money and time than, say, sprucing up a website and buying Google ads. If done well, the strategy could produce high-volume sales.
"When you bring neighbors and friends together, they have a chance to hear the feedback from multiple people looking at the same technology," said David Kaltsas, SunWize's executive vice president. "We end up with more educated customers, and they tend to be happy customers at the end."
SunWize isn't new to the solar business. Founded in 1992, the company was named the country's largest distributor of solar energy equipment in 2008 by market research firm SolarBuzz. It has a factory that uses the company's own encapsulating technology to make hardy solar energy products for industrial applications such as marine exploration and railroad transport.
SunWize also has been designing and erecting solar energy systems for years. After Mitsui & Co. bought it in 2006, the company has put more resources into that line of business, Kaltsas said. The company set up the head office for its installation business in San Jose, Calif., last year.
California, of course, is ground zero for solar retailers. The state offers generous incentives via its California Solar Initiative and is home to more solar energy installations than any other states (in terms of production capacities).
SunWize is up against hundreds of installers in the state alone. It provides residential installation business in California and Oregon, and commercial installation in additional states such as Texas and New York.
The company came up with the idea of hosting solar parties roughly a year ago and held five or six events to define the rules for the program, Kaltsas said.
SunWize typically asks existing customers to hold such gatherings, where a company representative would be around to answer questions. From there on, those in each party would have 60 days to sign installation contracts.
The company offers a 5 percent discount for overall installation costs for five homes, 10 percent for 10 homes and 15 percent for 15 homes or more.
SunWize said its neighborhood discounts, along with California's own incentive and the 30 percent federal investment tax credit, could save each homeowner over 50 percent of the equipment and labor costs. Citing data from the California Solar Initiative, Kaltsas said the average prices of residential systems installed for the first six months of this year ranged from $7.22 per watt to $7.75 per watt (not factoring in any incentives).
The host of the party would get a referral fee. For each person who signs up through the party, the host gets 1 percent of the cost of the solar energy system that will be installed at that person's home.
Holding neighborhood meetings to offer group discounts seems to have become a popular approach. That will give SunWize plenty of competition from among installers who also are wooing an entire neighborhood at a time.
Foster City, Calif.-based SolarCity and Los Gatos, Calif.-based Akeena Solar have already carried out such marketing efforts, for example.
Some communities have banded together to seek group discounts. GoSolarMarin came into being in 2007 when a woman in San Rafael, Lisa Max, decided to organize homeowners to negotiate for discounts. It has continued to do so today, but now charges a referral fee to installers it has selected.
One Block Off the Grid in San Francisco, meanwhile, started off as a for-profit business to organize community meetups and negotiate with installers for discounts. The company makes money by charging installers a referral fee.
SunWize also recently launched a financing program in which customers could obtain a zero-interest loan for up to 12 months from Lyon Financial Services.
The company would cover the interest portion of the loan, which is meant to last until the customer could take the 30 percent federal investment tax credit. Kaltsas declined to say how much the program would likely cost SunWize.
Image via SunWize.