Most residential installers are still seeing customer-acquisition costs continuing to rise, which puts a strain on many of their bottom lines. But new research by GTM indicates that trend is about to change.
While the plummeting prices of residential solar equipment continue, the anticipated drops in customer-acquisition costs haven’t followed, says Allison Mond, GTM Research solar analyst and report author. In fact, the opposite is true – costs have risen 30%, from $0.41/watt in 2013 to $0.52/watt in 2016 – an average increase of $800/customer based on a 7 kW system.
If residential installers can hold on for just two more years, though, those prices are expected to start a steady decline. “We expect customer-acquisition costs to decline to $0.40/watt by 2022 by means of further market maturity, proliferation of the long tail of installers and changes in lead generation strategies,” Mond writes.
For now, acquiring customers remains one of the largest portions of installation costs – and as companies like Vivint Solar and SolarCity retool their sales’ strategies to become more retail-oriented instead of the more prevalent door-to-door selling, those acquisition prices will, at least in the short term, continue to grow.