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Solar Fred Asks: Can Your Company Do "The Solar Puppy Dog Close?"

By Tor 'Solar Fred' Valenza
March 3, 2011   |   21 Comments

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21 Reader Comments
Comment
1 of 21
March 3, 2011
An interesting idea, but I could see even one install being returned to a small installer could put them out of business. That's a big gamble to make for a marketing campaign.

If the puppy dog is returned in a few days the seller still has a full priced puppy dog to sell. If a PV system is returned after 1 year the installer will have little of value, at least in California, and will have to come up with cash they may not have handy. I'm not even sure there is a system in place to handle the rebate return. The tax issues could get weird if the owner had taken the 30% tax deduction already.

This might work if the contract had the right exclusions and limits on the offer, and the installer could find an insurance policy to cover the loss.

It's an interesting way of looking at things though.
Comment
2 of 21
March 3, 2011
I agree Marvin, and I certainly mentioned the financial risk, above. But I wonder, like other retail returned items, weather a 1 year old set of panels couldn't be resold and reinstalled "As-is" at a discount. One would lose time and some panel pricing, for sure, but I bet there's a market for discounted installs for solar bargain hunters. One would have to be completely upfront about the return and dissatisfaction, of course. Again, I would hope that 99% of your installations are satisfied customers. There's nothing more powerful than a referral and nothing so devastating to a company reputation than a bad reputation.

And yes, there would have to be some kind of rebate and tax guidance for returns. I would be curious to know if anyone has had dissatisfied customers that demanded panels be taken off and how the rebate aspect was handled. Once issued, utilities might not keep track of returns, so there may be some further cushion there if it were legal for the solar installer to keep the rebate. Tax ramifications would have to be handled personally by the consumer and the IRS (unless the PPA/lease companies adopt this idea. Shh! Don't tell them. ;) )

As always, thanks for your perspective.
Comment
3 of 21
March 4, 2011
I've been trying to sell solar (water heater system) in Ireland for some months with a very limited success. I'd really worry about making such a claim. I'd very certainly want my CEO's written approval before I'd say it aloud to anyone.
Comment
4 of 21
March 4, 2011
Hi Fred:

The person who buys the puppy after being addressed with such flimsy sales tactics is an idiot. He deserves the rug piss and poop stains...
Its like car ads. The famous Mitsubishi Eclipse commercial featuring "Days go By" by Dirty Vegas is a case in point. I could look at that chick all day long and watch her move and love every second of it. But, am I going to buy a car because of her 2D image..??.. Dooooooon't hink so...
Maybe if she came to my door...LOL....

.....Bill
Comment
5 of 21
March 4, 2011
IF the concern is 'How do I market a one-year-old solar panel?' I am sure, as the author noted, that there will be no lack of individuals ready to pounce on a "good deal" offered as long as you accompany the panels with a certification of full testing and performance.

You could, of course, take a queue from BMW -
http://www.automotivetraveler.com/images/stories/blogs/brandys/080725-01-Greek-Used-BMW-Ad.jpg

Depending on your target demographic...some may truly not care a whit about buying a panel that would be just as old if it had been sitting in your garage for a year, and whether someone else first connected to the output terminals. In fact,

I'm not a tax pro, but am fairly certain at least the federal tax-incentives apply to the second purchaser as well, simply rebating a percentage of his (lower) installation cost.
Comment
6 of 21
March 4, 2011
Removing panels would leave patched holes behind and a compromised water barrier. I would not be motivated to buy panels that had a return policy.

And most people don't have pet dogs. Using one as a promotional prop would not make a favorable impression the majority of your potential market, who may not be as enamored with them ; )

http://biodiversivist.blogspot.com/2010/03/domesticated-dogs-mutualists-or.html

http://biodiversivist.blogspot.com/2010/08/lapdog-to-go-with-your-laptop.html
Comment
7 of 21
March 4, 2011
You might have a problem with the SPCA if you tried to install puppies on your roof. There would be an opportunity for an enterprising inventer to come up with special Roof Roof racking though.
Comment
8 of 21
March 4, 2011
At least in California the rebate cannot be applied to used equipment. So at the very least the system would have to be discounted for the lost rebate even if as good as new. I don't think the federal tax rebate has any similar restriction.

The basic requirement for permanency in the CSI Manual is:
If the solar energy system is removed prior to end of the 10 year warranty period, either:
The solar energy system may be installed at another site within the Program Administrator service territory within six months. The relocated system installed at the alternate site would not be eligible for an additional CSI Incentive; or
The System Owner would be unable to participate in the CSI Program for any additional installations under the CSI Program, including any active reservations that have not yet been paid.
Failure to re-install the solar energy system within 6 months will result in the return of the EPBB Incentive payment.

Other rebate programs probably have similar requirements.

If the right insurance could be found by the installer to cover the return this could be an interesting offer to a homeowner. I don't think the average homeowner would even catch that there would have to be patched holes in the roof after the system removal, or care as long as it was done well and was water tight.

I hear a commercial around here for mattresses that say try our mattress and if you don't like it after a month we will take it back and refund your money. But they also take care of disposing of your old mattress so if you return theirs you then have no mattress to sleep on so you have to buy something anyway. The returned mattress would not have any value because you can't resell a used mattress around here. I bet this is a return option that is not used very often so even though there is a significant risk to the mattress seller if one is returned the odds of return are low.
Comment
9 of 21
March 4, 2011
@pfiddle Yes, certainly, this is a top down decision policy. Some sales people are the CEO's in smaller solar firms. :) That being said, this is a tool one might use for someone is financially on the fence. I would hope that most sales people could spot a customer who is going to complain just to take you up on your challenge. Drop this customer, and move on.

@Bill. For solar, again, this is about confidence in your workmanship and customer service. One has to ask what one is afraid of to implement such a policy. It's the uncertainty of being able to handle the cost of a return. To mitigate this risk, perhaps there is an insurer who will write a cheap 1 year policy--based on your track record. If previous customers have been satisfied, chances are most will be too.

Russ, this has nothing to do with actual puppies as a prop. I was using the puppy example as the origin of the sales tactic. As for the 1 year return policy, different incentives motivate different customers. This one may not work for you, but might for others.

Luke: :)

Thanks all for you comments.
Comment
10 of 21
March 4, 2011
Marvin, thanks for researching the info. Regarding the insurance coverage, we were on the same page. See my comment to Bill above. :)
Comment
11 of 21
March 4, 2011
"...Russ, this has nothing to do with actual puppies as a prop..."

...says the man using a puppy as a prop ; )
Comment
12 of 21
March 4, 2011
Re: I don't think the average homeowner would even catch that there would have to be patched holes in the roof after the system removal, or care as long as it was done well and was water tight.

They care a great deal about holes in their roof (and they should). Every salesperson will testify to dealing with this question almost before any other conversation takes place.
Comment
13 of 21
March 4, 2011
Hi Fred:

LOL... this is funny... but on a serious note...

Talking about if you don't like it, return it..
For solar no way, be it PV or Thermal.
You can not compare either one of those to a mattress or any other cash and carry type of item. Solar is almost as severe as saying, try our siding and if you don't like it, return it etc.. ..LOL.. not going to happen, too much labor, to integrated into the existing structure and if someone ever did try that policy, they would have to pad their front end system prices so much it would be ridiculous, just to allow for the person who just changed their mind, or some other reason, Murphy etc..

.....Bill
Comment
14 of 21
March 4, 2011
"if someone ever did try that policy, they would have to pad their front end system prices so much it would be ridiculous...."

I disagree. If you have a very good, experienced install crew who provide quality and pride in workmanship and the electricians know their licence is on the line, then you have nothing to worry about. How would you compete with other companies if you're pricing is way out of the ball park so to speak? There would have to be a very valid reason other than to simply change their mind. If not, they could argue that the sky is not blue and get their money back.
Comment
15 of 21
March 6, 2011
This could only work if the pv system was installed on a trailer, then just haul it off. Which would solve the unsecured credit issue. If the customer defaults on their loan, then repossession is an option. There, big problem solved, now can we get low interest loans like the car dealers offer?
Comment
16 of 21
March 6, 2011
It's a great thought experiment. I would say that if we went into every project with the thought that "I'm going to do this job like I have given the client a money back guarantee" then we would really have a heightened awareness of everything that we did.

It's not a bad idea to go in with that mind set. So the specifics of how the guarantee would have to work are fun to bat around but they don't really matter.
Comment
17 of 21
March 8, 2011
Although a couple of neighbors have installed solar panels, I haven't considered it because of the cost effectiveness and possible complications of building maintenance if the solar unit is put on the roof or loss of lot usability if put on my yard.

The time to install a solar system is when the house is built instead of trying to add on to an existing structure.
Comment
18 of 21
March 8, 2011
Ron

There's very little maintenance of the modules on a roof (hose them off with a garden hose occasionally if you want to, normally rain keeps them clean) if that's the building maintenance issue you're referring to. An average size system of say 3 kW will take up ~300 square feet (10 ft x 30 ft). That's not much area considering the cost savings benefits, the pride you have in contributing to a healthy environment and the bragging rights of asking your (non-solar) neighbors what their electricity bill is & then showing them yours which will be very low or zero depending on how you size the system and your energy usage.

As far as cost effectiveness, in California payback times for solar PV systems are as little as 5-10 years (after that, your electricity is free for the next 15-20 years) and ROIs are in the teen percentages (tax free). You won't get that with very many other investments (like the stock market, for instance). You should speak with a reputable solar sales person because there are a lot of misconceptions concerning the issues you've stated. A site visit is free of charge and can be a valuable lesson in solar economics.
Comment
19 of 21
March 8, 2011
Hi:

To comment #14, I think it comes down to size, as allot of things do, as to whether it could "fly" for the business.
If you are small or a startup, it would probably kill you. If however you were big and doing lots of volume, the occasional de-install cost could be spread out over all the cash flow and be absorbed into the cost or require very little to be tacked on to the install costs.
Its just to me, such flimsy Psyc 101 tactics are a big turnoff when I have been on the receiving end...

.....Bill
Comment
20 of 21
March 8, 2011
There was a really interesting article in the November 2010 issue of Photon Magazine highlighting Sunspot Solar Energy, a NM-based installer who provides an energy production guarantee for PV systems his firm installs. If the system falls short of estimates he offers one of three remedies:

1. issue refund based on lost production revenue

2. issue refund based on system size (for components that underperform)

3. alter or adjust system to improve performance

This type of approach offers less risk against the installation company and still provides the same level of customer satisfaction.

Unfortunately, many incentive programs provide upfront cash rebates based on system design parameters and theoretical system production. Entirely production-based incentives programs - RECs, FiTs, and so forth, are still a small part of the incentive pie on the residential scale and would really provide incentive for setting up a business model such as Sunspot's.
Comment
21 of 21
March 10, 2011
The idea to offer satisfaction guarantees is an excellent one. The biggest risk relates to what issues might make the client become unsatisfied.

OK. So, you can control most of the variables - you do a fantastic job, service, production, everything perfect or better than expected! But.....

Cars almost always go up in price; puppies gain sentimental value. But....PV Systems, one year from now, will be available at lower prices that today.

Fred, I love your creative suggestions; you provide interesting food for thought. I think your basic question is what more can we do to help improve our client comfort levels so that they will, a) choose solar, a b) choose our company as their service provider.

Let's keep working on it.
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