Why the Solar Industry Should Re-Think the Service Bidding Site Approach

By Ted Strzelecki

So, competition is good -- but for whom, exactly? Not for the entrepreneur in the solar industry, thats for sure.

In a transparent business world, being honest and following up just isnt enough: Your competition is already doing that too. In the beginning, you may try to join a solar bid site. This is where a potential customer gives their street address and a copy of their electric bill and then has many solar companies blindly submit a bid with specs and pricing.

This might seem like a good move to start to make a name for your organization while you build your brand. You assume that once you spend enough time on these sites, you will eventually close some business from this source. Creating even the smallest amount of revenue will start to make you feel confident -- up until the point in time when you realize the bigger names in your industry do not use these avenues or any other bid sites and you ask yourself why. I noticed this myself and made some changes with my own organization. Only after making these changes did my margins skyrocket and we began to make some real revenue.

The way I see it, as you begin to scale from the clich garage (I literally started in a closet) and graduate to your own office building with several tiers of employees, the margin for these online platforms is no longer enough. At this stage, youre either a full-blooded entrepreneur or you need to have some on your team. The reason is, at this level you need to innovate to survive. The hard part is recognizing this and still being able to scale from there on. If you are copying others or relying on these bid platforms and just doing what everyone else is doing, then you deserve to only do as good as others are doing. Average is average for a reason -- because it is easier.

You may be asking yourself, "Where is that sweet spot to capture both in the solar industry?" My answer? There really isnt one.

In my mind, bid platforms are aimed to be an unbiased saving grace for the end user by offering vetted companies at competitive prices. However, when looked at through a magnifying glass, I believe they are detrimental and will be the downfall of quality in solar.

Upon launch of these bid sites, the companies using them that are vetted and bidding for work are in fact making decent margins and are hopefully able to bank some of that revenue for later costs associated with this newfound revenue (warranties, client upkeep, furniture expenditures and so on). The longer these solar bid sites stay running and the more popular they become, the bigger the undercutting issue becomes.

While the end user of these services may be excited because costs are dropping, I believe that so too does the quality of the service, the companies using this platform, the warranties behind them, as well as the integrity of the people in the industry. The service bidding model may work well for furniture and car sites because they are products, but my personal recommendation would be to ask a trusted colleague, neighbor or friend which company they choose to do business with and whether they would employ its services again. Ask about the results, the customer service aspect, timelines and the overall cost. However, for service-based commerce, solar in particular, you know what they say: You get what you pay for.

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Chariman & CEO of Solar Wolf Energy , Founder of ARC-S Realty Trust, Author of "Why Your Business Needs Solar."