2017 update customer acquisition costs in the solar industry
A 2016 report produced by NREL (National Renewable Energy Laboratories) has shown that the average customer acquisition cost faced by residential solar installers across America has fallen from $0.49 cents per watt in 2014 to $0.37 per watt in Q1 of 2016, a reduction of 25%.
However, these figures are distorted by the fact that they include EPC contractors who source a significant amount of their work from financing platforms for which they are EPC contractors only and so do not have lead generation costs associated with these jobs.
The better figure to use is the figure of $0.43 per watt, also quoted in this same report which NREL associated with full service solar companies that offered financing options as well as cash options to clients.
Figure 13. Q1 2016 benchmark by location: 5.6-kW residential system cost (2016 USD/Wdc)
When using this number it showed customer acquisition costs have fallen only 13% over 2 years.
Given this same report showed the average size of a residential solar job in America was stable at 5.6kW then the average cost of customer acquisition in the residential solar market it America stands at $2,408.
The concern for installers is that over the same period of time average selling prices for a 5.6kW residential solar system have fallen by more than 28%.
Herein lies the difficult position solar companies are now in, selling prices falling faster than customer acquisition costs.
The question all solar companies are now asking themselves is what solar leads are best to buy and "how much can I pay for solar leads before it is uneconomic".