By Don Tarkenton, major account manager, eOriginal
Solar is rapidly growing as more consumers seek the benefits of renewable power. The U.S. solar industry achieved another record year in 2014—growing by 34% compared with 2013—to install nearly 7,000 MW of solar electric capacity, according to the Solar Energy Industries Association. Given the track record of growth, solar conversion and popularity are predicted to increase in 2015.
The popularity of solar has spurred financial innovation, as well as attracted investors and traditional bank funders. Many solar companies are growing faster than their processes can keep up with. With this growth, scrutiny of the contracting and lending process is high and dynamic. With more bankers and investors jumping into the space, the state of the industry is changing, increasing risk but also driving revenue potential.
This makes it essential for solar companies to have thorough processes in place for origination and management of loans. With that in mind, many solar contracting businesses are “going digital,” using digital transaction management (DTM) to better manage financing deals and contracts for both homes and business entities.
Understanding digital transaction management
DTM has recently emerged as a new discipline that encompasses the fully digital creation, management, governance, and transfer of electronic assets. It takes the uncertainty out of traditional pen-and-paper asset management and ensures assets are ironclad and unfailing. Furthermore, it facilitates the creation and management of an Authoritative Copy document: a legally binding original copy that satisfies all parties, including banks, lawyers and other organizations.
DTM has gained traction in the solar industry as the digitization of contracts has exploded in popularity. Five years ago, early adopters aimed to remove paper from their business processes, focusing mostly on the eSignature aspect of the process. Today, DTM has evolved to provide end-to-end digital management of document-based transactions. According to a study conducted by Aragon Research, the market is expected to be valued at nearly $30 billion by 2020.
What this means for the solar industry
For solar contractors, DTM pertains to the financial aspect of leasing and contracting of hardware: the solar panels.
Digitization enables solar contractors to develop a streamlined process, from presenting to a potential customer all the way to signing the contract. For instance, presenters can walk potential customers through the process on a tablet at their homes, thus eliminating the delay it takes to return back to the office, transcribe the information, and then proceed with contracting. In short, DTM accelerates and simplifies the entire lending and loan management process, reducing the sales cycle without sacrificing security or the legality of the contract.
The benefits continue. When properly done, DTM provides an end-to-end digital asset management solution that also includes electronic vaulting. Vaulting adds key functionality because it provides encryption, securitization and ability to maintain and control the digital asset for its entire lifecycle, including post-signature execution. In short, vaulting makes digital contracts just as legal and enforceable—if not more so—as traditional paper contracts signed with ink.
The future is bright (apologies for the overused solar pun) for the solar industry and using DTM will help protect investments and provide legally binding contracts without the muss and fuss of pen-and-paper processes.
For solar contractors, DTM helps to:
-Simplify the loan origination process and pool contracts more quickly and efficiently
-Significantly reduce sales cycles and provide a first-class customer experience with a quick, easy, convenient, and secure loan process
-Sign and manage loans and leases from the start of financing through to securitizations