Appointments?
In the first quarter of 2023, numerous U.S. states executed a significant policy shift, reducing many of their net metering benefits. Experts anticipate that this sweep could fundamentally change the trajectory of the solar industry. With lower incentives to adopt rooftop solar, it is expected that buyer demand will take a hit, resulting in fewer solar appointments for solar installers.
An Unsettling Shift: The Nationwide Downgrade of Net Metering Benefits
Net metering has been a critical instrument in the solar industry's toolbox, allowing consumers who install solar systems to sell their excess electricity back to the grid. Typically, this has been accomplished at retail electricity rates, helping homeowners to offset the costs of both their solar installations and continued energy usage. Thanks to these helpful rebates, net metering programs have significantly spurred the adoption of solar power over the past few decades.
However, according to a report published in Solar Builder Magazine, Q1 of 2023 saw a widespread shift in this policy, with several states slashing these benefits considerably. Net metering compensation is increasingly moving towards time-varying and avoided cost rates - all generally lower than the retail electricity rates compensation had traditionally been based on.
● States such as Arizona, Nevada, and Maine, for example, have instituted policies that pay solar customers at avoided-cost rates. Thisequatestothe price theutilitywould havehad to paytosource the same amount of power elsewhere.
● Other states like California and New York are moving toward timevarying rates, where the price paid for excess solar energy fluctuates based on the time of day.
Potential to Drive Down Solar Appointments for Contractors
Solar installers are forecasted to feel the pain of these reductions immediately. Poor net metering compensation has now dramatically increased the payback timeline for homeowners considering installations. In California, for example, the new NEM 3.0 rates are projected to stretch this period from 5 years to 9, almost doubling the time it takes for homeowners to recoup their investments.
Under such conditions, solar is becoming a less appealing investment to customers all over the country. Demand is predicted to shrink, concentrating among homeowners who have the flexibility to consume their solar power during peak-use periods, rather than feeding it back into the grid with meager compensation.
For homeowners who don’t have this luxury, solar becomes far less economically viable. Battery installations could help minimize losses, but incorporating these into installations only grows the total price tag, which may be more than customers are comfortable spending in this new era.
Maintaining an Edge Through the New Market Crunch
Unfortunately, Q1’s shift is not an isolated occurrence. It's part of a broader trend of anti-solar legislation proliferating across the country. These policy changes represent a significant evolution in the solar landscape and are expected to have far-reaching consequences for installers.
To stay ahead of the curve, contractors will need to adapt to these changes by revising their marketing strategies, focusing on customers who are educated on the current circumstances surrounding solar and are still amenable to installing. By concentrating on customers who demonstrate financial preparedness, contractors can avoid losing time to prospects that don’t pan out.
Qualified Solar Appointments Offset Demand Dips
Many contractors are already changing their lead generation strategies to counteract the new market slump. Partnering with agencies that can provide fully screened, exclusive solar appointments is proving to be a successful route.
Agencies like Grid Freedom can deliver leads that have been personally interviewed and identified as eager solar customers - individuals who are further along in their buyer’s journey than average. All leads are sourced via attraction-based marketing, resulting in prospects that are proactively researching solar and ready to take the next steps.
After passing the screening, each lead is confirmed for their first appointment with the contractor. This streamlines the sales process for installers, ensuring that their time is only spent on meetings with customers who want to make a deal happen. Contractors can create a stronger foundation for sales, minimizing the friction that is being created by an increasingly tumultuous market.
