If you’ve considered expanding your residential solar contracting work to serve commercial customers, it’s important to understand the differences in these markets and whether your business is ready for the change.
Differences Between Residential and Commercial Solar
Wondering what to expect in the commercial solar market? Here are some important differences.
Commercial and industrial solar projects take longer, mostly due to the complexity. Residential solar is a quicker process. Between determining the financial benefits and the installation, residential solar takes between four and 12 weeks from start to finish.
The process for commercial solar takes longer for several reasons, including the number of stakeholders involved in the decision-making process. In fact, it could take as long as six months to a year to complete. Some of this is the permitting process, but there are other factors as well.
These time differences also impact the sales process. It’s important for companies looking to make the switch to understand the differences with the commercial solar sales process.
The complexity of commercial solar makes the whole project more technical. Residential is straightforward and operates on a smaller scale, allowing you to identify technical issues and discover solutions quickly.
Commercial has a lot more technical concepts. For example, the electrical equipment involved may be at a higher rating, so you may need to upgrade transformers to ensure the local infrastructure can handle solar backfeed.
Teams that venture into commercial solar may need more engineers on the team and a good in-house designer to streamline this process and deliver better customer service. This may expedite the permitting process as well, since there will be fewer revisions.
Communicating with commercial solar customers is different than residential. The entire process is longer, so sales reps need to offer clear expectations at the start about the length of the project and its requirements.
The frequency of communication overall may be less with commercial customers. Homeowners typically want projects completed as soon as possible. If expectations are managed correctly, a commercial customer will communicate less knowing that the project is six months to a year away.
Perhaps one of the biggest differences between residential and commercial solar projects is the costs. Virtually every aspect of a commercial project is on a larger scale, and with that comes higher costs for each aspect.
That said, the economies of scale with commercial projects involve a lower cost-per-watt for better value. Some of the costs are set, whether residential or commercial, such as the equipment that’s brought to a project site. Commercial customers also benefit from bulk savings, in some cases.
Are You Ready to Switch to Commercial Solar?
Managing the complexity and expectations for commercial solar customers is essential to success in this market. Here’s how to tell if you’re ready:
You’ve Maxed Out Your Residential Market
Despite increasing adoption, the residential market has limitations. At some point, you will have completed all the projects available in your local market, leaving the customer pool dried up. If that’s the case, it makes sense to expand into commercial to broaden your opportunities.
You’re Sick and Tired of the Grind of Residential
Residential solar is a big investment for homeowners. Selling to this market is a grind, and each sale only yields so much for the time involved. Like other B2B markets, commercial solar has a lengthier sales process with more stakeholders to persuade to close the deal, but you’re not jumping from one customer to the next quickly.
You Want to Make More Money Selling Fewer Deals
Do you want to make $5,000 or $50,000 on each deal? Why work that hard for a lower-value sale instead of investing the time into a big-ticket sale like a commercial solar deal?
As mentioned, there’s a lot of complexity with commercial solar. The time pays off with more money per sale, however, eliminating the constant hustle for customer acquisition and revenue. The tradeoff is that more time and effort is put into the sales process.
Find Success in the Commercial Solar Market
Though they’re both solar, the residential and commercial markets have many differences that are important to consider before expanding your solar business. Preparation is the key to success, especially when it comes to streamlining the process and saving your commercial customers time and hassle.