- Residential solar product sales have been forced to shift toward digital channels, creating unexpected opportunity for cost savings
- Shift to digital sales will allow the industry to lower customer acquisition costs ahead of federal tax credits being phased out in 2022
- SING subsidiary Direct Solar America is seeing increased virtual sales each week, has expanded its presence to nine more states
Solar power and renewable energy sources have been lauded for being at the forefront of cutting-edge technology, enabling consumers to lower their costs while simultaneously reducing their carbon footprint. However, and despite its high-tech focus, residential solar energy technology has long been sold in a decidedly low-tech manner – through customer referrals and face-to-face sales. Innovative companies like Direct Solar America, through its parent company SinglePoint Inc. (OTCQB: SING), are creating ways to capitalize on the market’s largely homebound status. The solar industry has been sharply affected in recent weeks as prospective customers have shied away from purchases due to store closures and shelter-at-home orders. However, the forced transition to online sales may be a boon in disguise for the industry, and solar product brokerages such as Direct Solar America stand to benefit the most.
SinglePoint, a publicly traded company dedicated towards acquiring businesses focused on emerging technologies, purchased solar power broker Direct Solar America in May 2019 as it sought to capitalize on a boom in residential solar installations, which increased by 45 percent in Q3 2019 relative to the same period in 2018 (http://nnw.fm/8lCE4). Direct Solar, which specializes in assisting customers with solar product sales and arranging financing, has enjoyed a remarkable growth spurt since the acquisition with sales and operations now spanning 25 states.
The firm has also rapidly positioned itself as one of the industry’s pioneers through the introduction of its virtual solar sales platform. “The Direct Solar America management team did a great job re-positioning the company quickly in these uncertain times […] ultimately we believe this is an improvement in the process and will continue to drive the company to new levels in the future,” SinglePoint CEO Greg Lambrecht stated in a news release (http://nnw.fm/7RmfF). In an industry where previously “90 to 95 percent of closed sales had an in-person meeting of some sort,” Direct Solar recently revealed that it is seeing virtual solar customers increase each week through its online channels (http://nnw.fm/rWrO5).
The transition to online sales has been resisted by solar companies based on the industry’s conventional wisdom that customers would hesitate to commit to such costly purchases online. However, in 2016, Tesla shifted the sale of its solar products to its online channels with energy consultancy Wood Mackenzie suggesting that the move may have lowered Tesla’s customer acquisition costs to “close to a quarter” per watt by the end of 2019. That pricing was in sharp contrast to Vivint and Sunrun, the two largest solar firms in the US, which had customer acquisition costs of $0.94 a watt and $0.90 a watt, respectively (http://nnw.fm/zSu5V). With federal subsidies for residential solar purchases set to be phased out by 2022 (a tax credit of 26 percent is available to consumers this year), the solar industry may be obliged to protect its margins by reducing their customer acquisition expenses – estimated by WoodMac to account for 21 percent of total costs (http://nnw.fm/ks2MN).
A recent survey published by EnergySage (http://nnw.fm/Q0blF) revealed that 21 percent of prospective solar product buyers in 2019 were willing to purchase their residential power systems online as compared to only 10 percent in 2018. Notably, it was also the only sales channel that saw an increase in preference. Direct Solar America has been able to rapidly scale its operations (the firm has extended sales coverage to nine additional states in recent weeks) following the introduction of its virtual sales platform as its agents are now able to discuss solar options at any time and anywhere with clients – helping the company to accelerate its growth rate. As SinglePoint President Will Ralston summarized (http://nnw.fm/BksF4), “this whole situation and what it’s forced us to do will only position the company to be more efficient and [have] lower costs.”
For more information, visit the company’s website at www.SinglePoint.com
NOTE TO INVESTORS: The latest news and updates relating to SING are available in the company’s newsroom at http://nnw.fm/SING
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