Robert Allen, owner of Luma Resources and, as president of Allen Brothers Roofing, in Rochester, Mich., a roofing contractor himself, thinks solar will continue to be a great niche for home improvement contractors, particularly roofers. As the cost of electricity rises, he says, the U.S. will become the world’s biggest solar market, and every roof replacement becomes a potential solar sale. “The sun never sends you a bill,” Allen says. He is convinced that in 20 or 30 years the odd thing to see will be the roof without solar. —Jim Cory is editor of REPLACEMENT CONTRACTOR.
In Hot Water It looks like an oversized skylight but it’s actually a solar panel dedicated to heating water.
American Design & Build, in Bel Air, Md., through its American Century Solar division, sells more of them than any other company in the state. ADB started selling water heaters because so many other companies sold solar electrical systems in Maryland, a top state for incentives.
The company developed a marketing campaign with a logo and materials that include a solar-powered lawn sign. “Then we set out to build a brand,” says vice president Kevin Carmen.
Most solar companies direct their marketing to homeowners who have already made up their minds and are looking at vendors and financing options. But such prospects are “few and far between,” Carmen says.
ADB is adept at generating leads among middle-income homeowners who can usually afford a solar hot water heater, for a fraction of the cost of a solar system. Many never thought themselves candidates for any kind of solar.
“Solar, to me, is like running a hurdle race,” Carmen says.
One advantage the company presses is its 19 years in business. “Nobody knows what’s going to happen to these solar companies once the incentives go away,” Carmen points out. —J.C.
Payment Plan Homeowners generally finance, pay cash, or lease solar systems. Buying, in the long run, produces the greatest positive cash flow. Buyers are eligible for a 30% federal tax credit on renewables, and there are also other incentives — plus solar renewable energy credits (SRECs) in some states. And, as with other home improvements, homeowners can also borrow to buy. A same-as-cash loan, for example, can bridge between the time of purchase and when the tax credits take effect.
Leasing solar is increasingly popular in the 14 states where it’s available. Homeowners lease a system from a company and agree to buy the power generated. Up-front costs are minimal, rates are usually below market, and the leasing company maintains the system. Major players include third-party financing firms SunRun and Sungevity, which subcontract installation, and SolarCity, which offers financing and installation.
But leasing has its drawbacks. Incentives and the benefit of depreciation go to the leasing company. And because terms and conditions vary, homeowners should know what happens if they sell their home or need to fix the roof. “For roof repair, there’s a good chance you’ll have to remove a significant portion of the system,” says Scott Siegal, owner of Maggio Roofing, which sells solar systems. “And the leasing company isn’t going to pay for that.” —J.C.
