Why solar companies go out of business: The most common mistakes

Published: 13 July 2021

Even in a thriving industry, solar companies can go out of business by making some of the most common solar company mistakes.

Solar power is one of the fastest-growing electricity sources in the world, and this includes the residential sector. According to the Clean Energy Council, Australia added more than 3 million kilowatts of small-scale solar power in 2020 alone. However, even in a thriving industry, by making common solar company mistakes, solar companies can go out of business. They need to make sure they pay attention to things like customer service and workmanship.

Photovoltaic technology has continued to evolve in recent decades, and manufacturers offer solid warranties for their solar panels and inverters. However, to use solar power successfully in homes and businesses, having the best technology is not enough. Companies must also provide excellent customer service and technical support, while working with qualified installers and designers. In this article, we will discuss some common mistakes among solar companies, and the negative impacts they can have.

Mistake #1 – Downsizing customer service departments

Solar power is a highly technical topic, and not everyone who purchases a home solar system has a professional background in energy or electricity. For this reason, solar providers can expect many questions and inquiries, not only from previous customers but also potential buyers. For example, there may be homeowners who are interested in going solar, but they want to understand the costs and benefits before making a decision.

Solar companies cannot assume that their customers will find answers on their own when they have questions about photovoltaic technology. Many companies have downsized or laid off their customer service department in an attempt to lower costs, but this is a serious mistake. Unlike a car, a solar power system cannot be tested before buying it, and a good customer experience is key to keep sales strong.

Mistake #2 – Outsourcing solar design and installation

Reducing their technical staff and relying only on external contractors is also a common mistake among solar companies. This is not always a bad thing, since there are many qualified contractors who can install solar systems professionally. However, when solar companies pick the cheapest option, the quality of their installations can be expected to suffer.

Another disadvantage of relying on contractors is not being able to control the customer experience. Again, this is not a bad thing if customer service is a high priority for the contractor, but this is unlikely when solar providers are only focused on low costs.

When you work with Instyle Solar, your project is completed by CEC Accredited Solar Installers and Designers who are part of our team. This ensures you get a professional installation, and our staff is ready to answer any questions or provide any technical support you may need.

Mistake #3 – Not providing post care services

The initial installation represents most of the work done by solar companies, but the relationship with a customer does not end there. Homeowners who have already installed solar panels with a company need attention: they may have questions, they may need technical support, or they may need help with a warranty claim.

Solar companies who forget about customers after installing their solar system hurt their own reputation. Previous clients who don’t get post care services are likely to tell their friends and relatives, and the potential market for that solar company will start to shrink. A solar power system has a typical service life of over 25 years, which means that solar providers can expect to have long-term customer relationships.

Mistake #4 – Incorrect grid applications and connect agreements

Most solar installations are grid-tied, which means their voltage is synchronized with the local electricity service. This is very useful for homeowners:

  • You can use electricity from the grid when your home consumption is higher than your solar power generation.
  • On the other hand, when you have surplus production, it can be easily sold to your electricity provider in exchange for a power bill credit.

Having a power generation system connected to the grid means you must meet certain technical requirements. This is not an issue when your solar system is designed and installed by professionals, and the necessary paperwork is completed correctly. However, if the grid application and connect agreement have mistakes, you will not be allowed to connect your solar panels.

There are cases in which a solar power system has already been installed and paid for, but the provider has pending paperwork and the system cannot be connected yet – some homeowners have been forced to wait for months!

Final recommendations

Using high quality solar panels and inverters is important, but you also need to find a solar company who provides a professional installation and good customer service. Many solar companies go out of business because they don’t pay attention to these areas – they downsize their customer service department and technical staff in an attempt to cut costs, and they delegate solar installations to external contractors. This tends to have a negative impact on quality, and companies start having issues in areas like post care services and grid applications.

At Instyle Solar, we manage the entire process in-house when providing solar power systems for our customers. This includes the initial home assessment, design, paperwork and installation, plus any technical support that may be needed in the future.

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