The SolarReviews secrets to success with solar leads and solar appointments

Updated 12/6/2022

Many owners of solar companies have an incorrect view that buying solar leads is not highly profitable. Often this view has come about because of an experience they have had with a low-quality lead vendor or because they have bought leads or appointments when they did not have the systems in place to work them profitably.

However, when done right, buying solar leads or appointments is, in fact, extremely profitable.

Consider the success enjoyed by SolarReviews customers. In 2021, we saw two companies that started as small solar buyers with us sell for a combined value of nearly $1 billion. During 2022 several others have received valuations of over $100 million during acquisitions or VC funding rounds.

Their secret to success was simple: these companies could regularly acquire customers at the lowest cost of acquisition possible because SolarReviews was driving their customer acquisition.

SolarReviews is both the largest supplier of leads and appointments to the residential solar industry and also the highest quality. On average our customers generate $6-$8 of gross margin for every dollar they spend with us on either leads or appointments.

In this article, I’ll show how you can utilize solar leads and appointments to achieve the same levels of success. I’ll explain:

• The cost of solar leads and appointments
• Why it’s cheaper to use SolarReviews than generate leads yourself
• Your lead generation options as a solar company owner
• How to spot lead fraud
• The magic source of cheap, high-quality leads (Hint: it doesn’t exist)
• Why SolarReviews clients have done so well
• What to expect when buying leads or appointments from SolarReviews and other genuine lead vendors

If you are a solar company owner or manager, understanding the economics of customer acquisition and the options available is essential knowledge. Reading this article will give you a unique insight into the customer acquisition landscape for residential solar as it exists in 2023.

How much do solar leads and appointments cost in 2023?

Solar lead costs vary between $35 and $200, depending on the location and the number of solar companies they are shared with. This cost is set by solar companies competing to bid for traffic on large platforms such as Google and Facebook.

Generally speaking, the following two points are true regarding the cost of solar leads:

• The more attractive solar is in a particular city or county, the higher the price of traffic. The price of traffic, in turn, raises the price of leads or appointments due to a saturation of solar companies in the area.
• The more companies the lead is shared with, the less each company will pay.

Want to see the price of leads in your area? Set up an account through the registration link above.

I have included a discussion about the cost of appointments further below in this article.

Why do solar leads cost so much?

The profit margin in the U.S. residential solar industry is phenomenal compared to similar home improvement industries or by international comparison.

For example, installed residential solar systems are sold in Australia at around $1.20 per watt compared to around $3 per watt in the U.S. This means that you get paid $16,000 more than a company that installs the exact same 8 kW system in Australia.

Given this profit margin, it is unsurprising that so many are investing heavily to attract solar leads. However, this means that solar companies are competitively bidding up the cost of traffic and leads. From October 2021 to October 2022, our cost per lead across all paid traffic searches increased by 38.5%, while the cost per click increased by 65%. Since 2017, our cost per click has increased by more than 300%.

Are SolarReviews leads better quality than leads from other vendors?

Yes, they are. SolarReviews runs an incredibly high-quality verification process in which only 48% of the raw leads pass and are sold. Here are the key reasons why SolarReviews leads far surpass the quality of leads from other vendors:

• We provide a wide variety of educational content, which means consumers on our websites are well-versed in the economics of solar before they decide to request a quote.
• Our solar cost calculator allows consumers to select how many quotes they would like to receive. They won’t have to worry about their phone ringing off the hook knowing that, on average, our leads are only sold to 2.3 companies per lead and our appointments to only 1.5 companies on average.
• We require consumers to verify that their phone number is correct by having them enter a specific pin sent to their phone to see their online estimate. If they do not confirm their phone number, they are not sold as a lead unless they are further qualified.
• We provide a high-quality online estimate to consumers. Those who have tried to copy our ads and call to action promise the same but deliver no online estimate to customers.

All leads are checked for:

• Shade
• Whether it has a viable roof for solar
• That the address is not a mobile home
• That the address does not already have solar

An onshore, American-based QA team completes this qualification. They disqualify over 50% of the raw leads we generate from paid traffic, meaning we only sell approximately 50% of the raw leads we generate.

Some solar company owners have tried both SolarReviews leads and generating their own leads using Adwords. Many concluded that they could generate leads themselves for the same price.

However, they noticed their cost of acquisition was higher with self-generated leads. Solar company owners realized they needed to generate two raw leads equating to one SolarReviews-quality lead. Most solar companies don’t realize that half of our raw leads fail our QA standards and are deemed unfit to be sold.

When they instead look at cost per appointment and cost for sale, it’s clear that SolarReviews leads generate a significantly lower cost of acquisition.

Are solar leads and appointments worth the high price?

Absolutely. As stated above, for every dollar a SolarReviews customer spends on leads or appointments, they will generate between $6-$8 of gross margin. This means you could see a 600% to 800% return on your investment. If you’re not buying solar leads by now, you’re missing out on an incredible opportunity to take your business to the next level.

Current levels of profitability in the solar industry will not be around forever and solar company owners need to be aggressively making the most of these excellent trading conditions.

Our solar leads profitability calculator allows you to enter your cost per lead or appointment, your conversion percentage from lead/appointment to sale, and the metrics of how profitable jobs are for you. This includes the average job size, selling price, and cost of labor and materials.

Let’s take a look at a snapshot of a live dashboard of one of our smaller clients in California:

Let's follow the math. They bought 92 leads and won eight jobs. That is a conversion percentage of 8.6%. This is a little above average, as normal conversion rates from lead to sale are around 6%, but vary greatly depending on how you price your systems.

This installer has an average job size of 10 kW and an average gross margin of $1.20 per watt. They sell at $3.00 per watt, and their labor, equipment, and permitting costs total $1.80 per watt. So, they have generated eight jobs with a total value of $240,000 and a gross margin of $96,000.

Even though approximately 19 of the 20 leads this company purchased did not buy solar from them, they still made a 10x return on their ad spend.

Why can SolarReviews generate a cost per acquisition from Google Ads and Facebook at a lower cost?

Many of the leads and appointments sold by SolarReviews are generated via Google Ads and Facebook.

While you can set up traffic-buying accounts on these platforms relatively easily, it’s unlikely that you’ll achieve the same cost per lead or cost per sale as we do. This is because:

• We have a large amount of organic traffic. SolarReviews' solar-specific websites (SolarReviews, Solar-Estimate, and SolarPanelTalk) generate approximately 12 million organic visitors and 200,000 organic leads annually. This allows us to run our paid traffic business at a significantly lower margin.
• We offer the consumer a choice of how many quotes they want. When they select two, three, or four, we can share the cost of generating this lead over multiple solar companies, allowing each company to pay less. If you buy traffic directly, you might think that the leads are exclusive to you, however, companies will often also visit our website for quotes. So, the “exclusive lead” you get when you buy traffic directly isn't all that exclusive.
• It is not always possible to hire competent resources to manage paid traffic. Many self-anointed Google Ads experts will know enough to convince you they are an expert, but not enough to actually do the job well. We are fortunate to have platform-specific experts who are among the world's best at managing a specialized advertising budget.
• Google and Facebook are becoming complex applications, making it harder for one team to manage spending across multiple platforms. It is difficult for even a platform-specific expert to maximize returns from just one platform.

How to find high-quality leads for cheap (hint: you can't)

There is no cheap, high-quality, and high-volume source of solar leads. Period.

It might be possible to generate a low volume of low-cost local leads from referrals, but volume and quality can only be obtained from larger platforms.

Large platforms like Google, Bing, Facebook, YouTube, Outbrain, Taboola, and others own the consumer and sell the traffic to the highest bidder. They are aggressively making it harder to generate organic leads from their platforms. In many Google search engine result pages, or SERPs, the ads are above the fold, and you have to scroll down to see any organic content.

Unfortunately, this means paying for clicks is the only way to get a reasonable volume of leads from those platforms.

A lead generation company like SolarReviews is performing this traffic-buying function for you. We spend money on journalists to generate organic solar leads and paid traffic to generate additional volume.

At SolarReviews, we have the ability to efficiently and effectively mix paid leads with high-quality organic leads. This allows us to deliver you a premium lead at a lower overall cost of acquisition.

Why you haven’t succeeded with solar leads in the past

There are two reasons why you may not have succeeded with solar leads previously:

• You’ve been buying leads from fraudulent lead vendors; or
• Your follow-up process has been inefficient.

It is a prerequisite to success with lead buying that you are not dealing with a fraudulent lead vendor. Here is a link to an article where I discuss tips to recognizing fraudulent lead vendors.

It is incredibly competitive to take a good solar lead and convert it into a sale. Automated CRMs are essential to the solar lead sales process. The best solar sales organizations are calling leads back almost immediately. Manual systems cannot compete with automated CRMs or dialing systems, and we highly recommend that companies invest in this specific infrastructure – especially if they’re in a highly competitive market.

Many solar company owners believe they have the personnel to work leads effectively. The reality? They don’t.

In almost every case where clients have complained about their returns, we have provided them with a dummy lead to follow up with. We soon learn that these companies do not call the dummy number for hours, and only call it once or twice over the following week.

Other companies burn leads because they have poorly-trained people making the initial calls to consumers or have very inflexible sales models where they will only answer questions if the consumer agrees to an in-home appointment. Your SolarReviews account manager can offer advice on setting up your follow-up process.

What contact rate can you expect from solar leads?

With SolarReviews leads, you will generally get a contact rate of 80% if you call the consumer immediately and regularly over the first few hours after the lead is generated.

Unfortunately, you can’t return the 20% of leads you don’t contact. Just as Google will not refund us for the 12 clicks we bought to generate that lead, you cannot return a lead that does not answer their phone.

When a lead falls through, it’s natural to be upset – you may even want to throw in the towel on buying leads completely. However, we would advise you to stick with it. Remember, even selling just one lead out of 20 purchased will make an 800% return on your lead investment. Focus on the fact that one lead out of every 20 turns an $80 purchase into a $15,000 margin – and that lead is coming. Be patient!

Drop-off rates are an unfortunate reality when it comes to lead buying. Even with the most honest and high-quality lead vendors, there will always be many more leads that fail than convert.

What is the conversion rate from leads to set appointments?

The conversion rate of SolarReviews lead to appointment, complete with a best practice follow-up, averages around 33% nationally.

Solar appointments

Many family-owned solar companies want to avoid investing time and cost into a sales infrastructure like the one we mentioned above.

Smaller, owner-operated solar companies are at a disadvantage when it comes to chasing up leads quickly. However, they are at an advantage once they are in the home with the customer. Owner-operated companies are typically local, and the salesperson generally has a much broader range of knowledge than a salesperson for a larger, more corporate company.

This is why we often recommend that owner operated companies buy appointments rather than leads. The appointments cost more but they yield a lower cost of acquisition and give the company a way to grow even before they have a complex CRM and dialer set up.

How does the cost of solar appointments compare to the cost of solar leads?

Solar appointments are between three and four times more expensive than solar leads. This is because it takes three leads to generate an appointment. In the process of trying to press the consumer to make an appointment, you may disqualify other leads. The consumer may grow wary, believing you were only after their information, and then refuse to enter into a serious shopping process.

These disqualified leads do not earn any revenue. However, the clicks from Google or Facebook that generated these leads still need to be paid for and are reflected in the cost.

How much do solar appointments cost?

Solar appointments usually cost between $200-$500, depending on the location and the number of set appointments. Once you’ve set up your account, the cost of appointments in your area can be found in your company dashboard.

We only set one or two appointments per consumer. This is because the no-show and cancellation rate is too high when more than two appointments are set.

This is the most affordable way to generate appointments. Dozens of clicks need to be purchased to generate just one in-home appointment. With a cost per click in Google Ads costing around $8, this can equate to $200-$300 worth of traffic. Then, it’s time to follow up on those leads and find the appointment-ready customer.

Are there different types of solar appointments?

Yes! SolarReviews offers both in-home appointments and pre-set virtual appointments. Virtual appointments are generally a lower cost compared to in-home appointments. Ultimately, it is the consumer's choice which they prefer. We are then guided by the consumer’s selection, the type of appointment that best fits their needs, and how many appointments they want to schedule.