March 3, 2022

Tips To Create An Effective Solar Proposal: A Beginner’s Guide

solar panels on roof

Solar proposals can be tricky to get right, straddling the line between a sales tool and a technical document.

It’s well worth the effort to figure it out though, considering the effect a good (or bad) proposal can have on your bottom line.

For instance — according to data from Wood Mackenzie, customer acquisition costs now account for 23% of the total price of a residential system — the equivalent of $5,250 per customer for a 7kW system.

That’s an awful lot of money to spend no matter how you cut it. But it’s especially hard to swallow when a customer cancels their order due to expensive, time-consuming change orders stemming from weak proposals. In fact, 68% of solar businesses lose sales following change orders.

With that in mind, we’re going to go over 4 tips to create an effective solar proposal. Let’s get started.

Tips to create a winning solar proposal

All the following tips center around one main theme — highlighting what the customer cares about the most. After all, a solar proposal needs to focus on the information that matters from the customer’s point of view, not yours.

1. Focus on the energy bill savings

For many homeowners, solar panels sound like a great idea until they’re looking at the actual proposal. It’s just different when the real numbers are in front of them and they’re deciding whether to pull the trigger.

Focus on the energy bill savings
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That’s why it’s critical to focus on the customer benefits – primarily the savings in terms of their energy bill. For example, how much will they save on electricity this year? How quickly can they recoup their investment?

This return on investment often tips the scales in the customer’s mind, giving them that final push to go through with the project. And while many customers are familiar with general numbers for solar, it’s much more powerful when it’s personalized to their specific home and project.

Most property owners, for instance, have already heard that they’ll probably break even on their solar investment in seven to eight years. But this depends on a variety of factors, including the size of the system, sun exposure of the property, and their specific energy consumption and cost. In southern parts of the U.S., for instance, customers often pay under 12 cents per kWh, while those in the Northeast typically pay 20 cents or more.

So customers are often eager to see exactly how much they can save personally — in both the short and long term. Here are a few key metrics that are good to include in your solar proposal:

  • Estimated savings in the first month
  • Estimated savings in the first year
  • Estimated payback period (break-even point)
  • Estimated savings in 25 years
  • Estimated property value increases
  • Estimated monthly utility bill with solar (now and in 25 years) vs. without solar (now and in 25 years)

When laying out the estimated savings, also explain the practice of net metering, which allows homeowners with solar panels to sell unused electricity back to the grid.

This gives customers a concrete understanding of what their electricity bill will look like going forward. As you can see in the chart above, most states have passed net metering laws, but there are still a few that haven’t. If your customers are in one of the states without net metering, be sure to include specifics to their area.

2. Identify all rebates and incentives available

Solar rebates and incentives can be a great way for homeowners to save money upfront or on an ongoing basis, but can be an overwhelming process for many; the information out there is fragmented and confusing at best. So anything you can do to clear the waters will make a big difference.

Identify all rebates and incentives available
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Solar rebates and incentives can be a great way for homeowners to save money upfront or on an ongoing basis, but can be an overwhelming process for many; the information out there is fragmented and confusing at best. So anything you can do to clear the waters will make a big difference.

Not only will it illustrate how much they can shave off the installation cost, but it establishes your company as a trusted source of information. Here’s a list of available rebates and incentives that you should include in your solar proposal.

The federal investment tax credit (ITC)

This is by far the best solar incentive out there. The ITC gives customers back 26% of the cost of solar installation. And because it’s a tax credit as opposed to a deduction, it directly offsets what customers would otherwise owe in taxes. This means the ITC often comes back as a refund at tax time.

State tax credits

Some states offer their own tax credits in addition to the federal ITC. The amount varies greatly from state to state but can really add up when paired with the federal credit. Check out the DSIRE (Database of state incentives for renewables and efficiency) for specifics on states in your area.

Cash rebates

Some states, municipalities, and even utility companies offer up-front cash rebates for solar installation. Such rebates are usually limited-time deals and disappear once a certain amount of solar has been installed in your region.

When laying out the various rebates and incentives available to your customer, make sure to personalize them to their specific system. For instance, don’t just say that they can save 26% with the federal tax incentive. Show the cost of their system and then the exact dollar amount they will save, both cumulatively and per incentive. Here’s an example:

Rebates and incentives

Total savings$9,700
Cost of your system$20,000
Minus incentives-$9,700
Actual cost to you$10,300

3. Include financing options in your solar proposal

As you might be gathering, getting the financial side of things right is a big part of nailing your proposal. And when you think about it from the customer’s perspective, it makes sense. Solar panels cost a lot of money and they have to figure out how to pay for them.

Include financing options in your solar proposal
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So, including financing options in the initial proposal gives customers actionable information that they’re looking for. And it can make the difference between a solar proposal sitting on a homeowner’s desk for weeks vs. being acted on immediately.

As for the specific financing options available, homeowners have three main choices: a solar loan, a solar lease, or a power purchase agreement (PPA). The first, a solar loan, works like other personal home improvement loans — the homeowner takes out a loan from a lender for the purchase of the system and makes monthly loan payments to pay back the loan.

With solar leases and PPAs, the homeowner may not pay any upfront costs but also doesn’t own the system. It’s kind of like renting. The solar installer owns the system, and the homeowner pays monthly for using the energy the solar panels create (which is typically less than an average electricity bill).

In order to offer actual financing options in the proposal, you’ll want to line up a financing partner (if you haven’t already). This can be a nationwide solar loan company or a local bank or lender. If you decide to go with a solar loan company, a few options include Sunnova, Mosaic, LightStream Financial, Sunlight Financial, and GoodLeap.

4. Create stronger solar proposals using EagleView

As you might be gathering, getting the financial side of things right is a big part of nailing your proposal. And when you think about it from the customer’s perspective, it makes sense. Solar panels cost a lot of money and they have to figure out how to pay for them.

How EagleView strengthens contractor’s proposals and helps improve close rates

EagleView’s solar products like Inform Essentials+ and Inform Advanced allow contractors to create a proposal based on accurate, final-design quality measurements as opposed to rough, preliminary measurements — meaning there are often no follow-up external site visits needed to correct anything.

As you can imagine, this greatly reduces customer-facing change orders and operational hardships, improving both the homeowner experience and the length of the project cycle. Take the experience of Ipsun Solar, for example. Joseph Marhamati, Ipsun Solar’s Vice-President and CFO, and one of the company’s founders, says that,.“Essentials+ has enabled us to get our customer-facing change orders down to almost zero.”

5. Lay on the social proof

Up to this point, we’ve been focused on the financial benefits of installing solar panels in general. However, you also need your proposal to show the customer why they should choose your solar company over a competitor. On average, solar installers are directly competing with 20 or more companies.

Factors that many property owners consider when choosing between companies include long-term viability, level of service, and attention to detail. Basically, customers want to make sure that they get a high-quality installation and that your company is going to be around if they have problems in the future.

One of the best ways to make your case is by letting other customers do it for you. You can do this by sharing reviews, testimonials, and case studies right in the proposal. To make them even more relatable, feature customers that your prospect can connect with on an emotional level and present the review as a story.

Examples of relatable anecdotes may include:

  • A retiree on a fixed income who was concerned about the upfront cost of solar
  • An environmentally conscious spouse with a solar-skeptical partner

If your company’s been around for a while, you can also present social proof in the form of numbers. Below are a few things you can share to help ease customer’s concerns.

Social proof & numbers to close solar leads

  • Total number of solar installs completed by your company
  • Regional or national rankings
  • Any specific local projects and references
  • Online reviews (Yelp, Google, Facebook)
  • Number of employees who live in the local community

What EagleView does to help solar contractors

EagleView complements or eliminates your site survey process, delivering the external roof data you need to plan a solar project quickly. We help contractors with the following:

  • Comprehensive remote measurement solutions, including pitch, azimuth, and remote shade analysis.
  • Design solutions that allow you to create precise digital models instead of drawing over 2D images and needing to estimate the size and location of obstructions.
  • Determine optimal panel placement for solar energy production based on solar access values derived from sophisticated shade analysis.
  • Create proposals, permit sets, and project plans faster with digital file exports for popular design programs.

Learn more about how EagleView can help your solar business sell more panels in less time. Order a report today to see how it works!

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