By Pete Wilking, founder and president of A1A Solar Contracting

If you’ve been installing solar for any length of time, chances are you’ve heard from homeowners in crisis concerning the sudden insolvency of their original solar contractor. With so much growth in our industry, why do we see so many installers come and go? The answer is simple: It depends on how the business owner defines “success.”

Often, contractors define success in terms of gross sales, watts sold and total installations completed. The missing element is usually profit. With no regard to some level of profit, there is absolutely no way to stay in business. It’s easy to generalize, to factor in your equipment and labor and see the gross profit from each job. That being said, unless you’re also figuring out accurate tabulations for overhead expenses such as marketing costs, insurance, engineering, software/IT services, etc., chances are your pricing is too low for your own good.

Our industry is notorious for waging price wars with each other in order to win a job.  Contractors stack up a bunch of underpriced, unprofitable jobs and then end up having to cut corners because they don’t have anything left to pay their bills or their employees. Fighting to offer the lowest price results in no profit, low quality, customer dissatisfaction, and, as a result, poor customer reviews. That leaves you with a distressed company. With 20/20 hindsight, you might conclude that it would have been better not to get the job at all. Nobody wins—not the customer, not the contractor, not the industry.

As an 11-year solar veteran, my definition of success involves a quality install and a happy customer. A fair profit for the company so that it remains an ongoing entity is also essential. Sounds easy, right? Not so in markets where price shoppers pit one contractor against another and assume that all solar contractors are the same.

We know that’s not the case, but how does the customer know? Through due diligence. A little bit of effort on the customer’s part can be a life saver and also help a good solar contractor win the deal and not have to play the low-price match game. Most people understand that decent quality and good people and processes cost money. If you don’t account for all of your job costs appropriately, your business won’t be around for very long.

Customers could use some unbiased guidance. The price of the system should be a factor—not the only factor—in selecting a contractor. Here are some tips you can share with your prospects in order to help them choose good solar contractors:

• Verify that the company is a licensed solar contractor (assuming your state has this designation).
• Check for any complaints lodged against the company with the Contractor Licensing Board and/or the local BBB.
• Verify proof of current workers’ compensation and general liability insurances.
• Verify that the company has workers that are NABCEP PV installer-certified (a national credential ensuring expertise in PV).
• Check SolarReviews and other online review hubs (Google, Yelp, Facebook, etc.).
• Request and call at least three past customers for reference, including both current and those from several years back.
• Find out if installations are outsourced. If yes, to whom? Ensure that you get proof of insurance from any subcontractors performing work.
• Find out if the solar contracting company has received any awards locally, regionally or nationally.
• Visit the company’s office to assess the facility and quality of staff.
• Ask about financing options available including leases and PACE.
• Ensure that the contractors will achieve your needs and wants, not just theirs.

As solar contractors, we have an obligation to the industry to provide a better overall customer experience and final product while earning a fair profit for ourselves. Giving customers some tips during their selection process will help them choose the most honest, thorough and professional contractor for the job.