The 7 Deadly Sins of the Solar Industry

Listen as Jason discusses "The Seven Deadly Sins of the Solar Industry" with the hosts of the "Climate By Us" Podcast:

The Seven Deadly Sins of Residential Solar

The residential solar industry is in the middle of a contraction period after a massive boom, offering immense opportunities for growth and innovation. Companies in this space often fall into critical pitfalls—“The Seven Deadly Sins” of residential solar—that can hinder their success and customer satisfaction. Here’s a detailed look at these common challenges and how to overcome them.

1. Losing Focus on the Customer

Failing to prioritize the customer is a cardinal sin in the residential solar industry. Companies often become too focused on internal metrics, sales targets, or operational efficiency, neglecting the very people who drive their business: the customers. This misstep can manifest as poor communication, a lack of personalization, or failure to address customer pain points.

Impact:

• Customer Satisfaction: A seamless experience drives referrals, which are invaluable in an industry with one primary lead source.

• Misaligned Priorities: Sales teams often dominate decision-making, overshadowing customer-centric strategies.

• Lost Trust: Companies who continuously de-prioritize customer needs will find their customers turning away to more trusted sources.

Expanded Solution:

• Implement robust customer feedback loops using surveys, online reviews, and direct outreach to understand pain points and improve processes.

• Train sales and service teams to view customer needs as the cornerstone of decision-making through regular workshops and scenario-based training.

• Use tools like Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT) to measure satisfaction consistently and act on findings immediately.

• Introduce customer-centric policies such as flexible financing options or post-installation support to strengthen loyalty.

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2. Poor Pipeline and System Management

A well-managed pipeline and mature systems are the foundation of operational efficiency in solar. Yet, many companies fail to align their tools and processes with their growth ambitions. Pipeline mismanagement—such as delays in lead tracking or resource allocation—and outdated systems create inefficiencies and frustrate customers.

Impact:

• Longer Cycle Times: Frustrates customers and reduces operational capacity.

• Missed KPIs: Without proper tracking, inefficiencies compound over time.

• Inefficient Systems: Weak CRM systems and outdated tools lead to mismanaged data and project delays.

Expanded Solution:

• Use advanced project management tools or solar-specific software to track the pipeline in real time.

• Conduct weekly pipeline reviews with teams to identify bottlenecks and brainstorm solutions.

• Invest in advanced CRM and ERP systems tailored to the solar industry to streamline operations and enhance data accuracy.

• Continuously review and refine proposals and designs to reflect current customer needs and technological advancements.

• Automate routine tasks, such as permitting and financing workflows, to reduce human error and speed up processes.

3. Poor Communication

Overpromising and under delivering is often a result of poor communication. This sin arises when companies fail to set clear expectations or provide timely updates, leaving customers frustrated and uncertain.  This is one of the most common complaints from customers while waiting for their system to be installed and interconnected. 

Impact:

• Customers feel left in the dark and frustrated.

• Discrepancies between expectations and outcomes tarnish the company’s image.

Expanded Solution:

• Develop a comprehensive communication strategy that outlines touchpoints at every stage of the customer journey.

• Train staff to use clear, jargon-free language when explaining technical aspects like installation timelines or financing terms.

• Invest in customer portals or mobile apps that provide real-time updates on project progress.

• Create a customer care team dedicated to proactively addressing questions and concerns.

4. Cash Management and Payment Problems

Mishandling payments—whether through delayed receipts, inaccurate disbursements, or opaque financing—undermines trust and disrupts operations. Customers expect clarity and reliability when it comes to their financial commitments, Sales Teams expect a clear and fair payment process, EPCs expect timely payments from their finance partners, and subcontractors expect timely payments for their services. 

Impact:

• Customers may lose confidence in the company’s reliability.

• Sales teams become restless and look for new partners.

• Vendors and partners may become reluctant to collaborate.

Expanded Solution:

• Automate financial processes with software that tracks payments, generates receipts, and handles disbursements.

• Establish clear policies and timelines for payments to vendors, sales commissions, and customer refunds.

• Develop a 13-week cash flow model and set clear expectations. 

• Create a dedicated team to handle financial inquiries and disputes to build confidence in your processes.

5. Firefighting vs. Fire Prevention

Operating in constant crisis mode is unsustainable. Companies often fall into this trap by neglecting long-term planning and relying on reactive measures to address issues as they arise.  Especially now in our contraction phase - throwing bodies at problems is the wrong answer to the problem.  Companies need to invest in scalable solutions that focus on process improvement and create efficiencies.

Impact:

• Limits scalability and growth.

• Creates recurring problems that drain resources, especially cash. 

Expanded Solution:

• Develop a strategic growth plan that includes both short-term and long-term goals, with clear milestones.

• Conduct regular process audits to identify inefficiencies and address root causes before they escalate.

• Invest in employee training to empower teams to anticipate challenges and implement preventive measures.

• Build redundancies into critical systems, such as backup suppliers or alternate financing options, to mitigate risks.

6. Lack of Transparency

Lack of transparency can alienate customers and create internal silos. When companies fail to provide clear information about costs, timelines, or financing, they risk losing trust and credibility.

Impact:

• Customers are left confused about costs, financing, and other critical details.

• Internal silos develop, leading to inefficiencies.

Expanded Solution:

• Provide clear, upfront information about costs, financing options, and project timelines through detailed proposals and contracts.

• Use visual aids, such as infographics or videos, to explain complex topics like third-party ownership (TPO) models or escalation factors.

• Foster a culture of open communication within the organization through regular team meetings and cross-departmental updates.

7. Focusing on Short-Term Sales Over Long-Term Relationships

Focusing solely on closing the immediate sale is a dangerous short-term strategy. Companies that neglect to cultivate lasting relationships with their customers miss out on opportunities for referrals, repeat business, and long-term value creation.

Impact:

• Lower Lifetime Value (LTV): Customers are less likely to return or purchase additional services.

• Fewer Referrals: Dissatisfied customers don’t recommend your business to others.

• Missed Opportunities: Lack of follow-up leads to underutilized potential for upselling and cross-selling.

Expanded Solution:

• Develop a post-sale engagement plan, such as annual check-ins, maintenance offers, or energy efficiency consultations.

• Implement a referral program that incentivizes satisfied customers to recommend your business.

• Provide ongoing education about solar upgrades and advancements to maintain customer interest.

• Treat every customer interaction as an opportunity to build trust and showcase value for all stakeholders.

Avoiding the Pitfalls: A Roadmap for Success

By addressing these seven deadly sins, companies in the residential solar industry can unlock significant opportunities for growth and customer satisfaction. The key is to:

• Stay customer-focused: Put the customer at the center of every decision.

• Manage pipelines effectively: Streamline processes to ensure efficiency and satisfaction.

• Emphasize transparency: Build trust by being clear and honest with customers and teams.

• Invest in maturity: Equip your business with the tools and strategies needed to scale.

Residential solar is full of potential. Avoid these pitfalls, and your company can position itself as a leader, building trust, driving innovation, and ensuring long-term success.