Whether you manage a local rooftop PV installation business or a nationwide solar operation, soft costs are one of the most talked about and critical challenges for solar managers to tackle right now. In this post, you will gain a firm foundation for discussing soft costs and learn how to start addressing soft cost inefficiency at work.
In this guide, we will go over these key questions:
Simply put, soft costs are made up of all the customer acquisition, personnel, administrative and operational expenses outside of the solar panels, inverters and other balance of system hardware components required to sell and install a PV system.
For solar contractors, this is a warning sign that they cannot continue to rely solely on decreasing component prices as a viable means to bring in profits. In order to build a sustainable solar company, both solar and non-solar research show that targeting soft cost reductions is now the fastest and most effective way to get there.
At the end of the day, one of the key responsibilities of solar business managers is to steer company operations so as to maximize profit margins. Traditionally, most managers have focused on increasing top-line revenue through growth and market penetration. However, as the solar market matures, it is now crucial to keep an eye on the bottom line in order to be a truly efficient and growth-ready company.
As was mentioned in part 1 of this post, soft costs can make up to two-thirds of the total solar installation cost. In order to minimize your overhead, your focus will need to be on streamlining the processes behind activities like customer acquisition, labor management and supply chain.
In your mind, select an operational process that you are familiar with (installation, inspection, maintenance, etc.) and ask yourself:
Creating a set of process maps for various activities and hand-offs is often a great discovery technique when answering questions like the above. Here’s a simple flowchart tool that we like!
What you’ll likely find is that there is a compounding effect taking place: small delays, missed steps or communication inefficiencies conspire to become large, costly time-wasters for you and your team. What can you do about them?
No two solar providers have the same reality, but a common consensus is that teams unfortunately spend more time on repetitive, manual and administrative tasks than on growing the business itself. To give you and your team back some of that time, the easiest way to automate those small, annoying steps is through the adoption of “solar software.”
Solar software is the family of tools that is solely focused on addressing the operational challenges of solar installation, maintenance, sales and management teams everywhere. Over the past few years, the American PV market has begun to embrace the idea of implementing innovative technology to spur growth, an example of which is the introduction of an annual Solar Software Summit (S3) by Greentech Media in 2016.
There is software (whether in progress or already launched) that supports various steps of the solar process, from digitizing the proposal design process to empowering better data collection and retrieval in the field. If your company does not have a CTO or CIO with a process for exploring new technologies in place, we recommend starting by:
Though it does take an open-minded and results-oriented leader to step outside of traditional methods and embrace innovation, the results are well worth it. You can then further stabilize solar operations by reinvesting the money that is saved into increasing innovation, quality and customer experience to form a solid foundation for future growth. What’s important to note is that the pursuit of soft cost reduction has long-lasting and far-reaching effects on your organization that go beyond increasing profits; it results in cultivating a solar company that is more resilient, more disciplined and possesses a solid foundation for growth.
Interested in improving workflow automation and communication via solar software? Take a look at what other residential and/or commercial solar providers have done. SunSystem Technology, the nation’s leading residential installation and O&M provider, published this LinkedIn article on how they use mobile forms, data integration and process automation to work smarter, not just harder.
Scoop Solar is a unique solution that incorporates mobile and cloud technology to create an intuitive field-to-office experience for your team. By connecting your data and existing software with easy-to-build work apps™, your team can access, input and sync data from a mobile phone or desktop, wherever they are. Work smarter and lower your overhead with features such as standardized mobile-optimized forms, one-click reporting, built-in integrations and more. Learn more about our made-for-solar solutions here.