David knows how to sell residential solar. He’s been a top producing salesman for over a decade. But nothing threw him for a loop like Time of Use Rates (TOU). He’s seen all the rapid changes and innovation the industry has encountered—more efficient panels, microinverters, and dropping hardware prices—and adjusted his sales methods accordingly. Now he’s worried that TOU will forever make selling solar a heavy lift and limit his ability to grow his business.
Lucy has been selling solar for about the same amount of time and she too understands the challenges presented by TOU rates but can’t help but think of what happened to the taxi industry when Uber came around: massive transformation that gave travelers a far superior experience while offering others a great way to make some extra money. So Lucy’s hopeful that TOU will provide the same catalyst to modernize the grid, give people control over their energy investments, and perhaps even the ability to transact peer to peer.
The Good Old Days
In the past, the structure of solar rates was simple: net metering established that consumers in California could send every excess kilowatt hour (kWh) generated by their solar system back to the grid and then use these banked kWh later. In short, with net metering the grid acted as your battery.
Every kWh was set at a fixed price, so if you generated excess energy while you were at work, when you came home and turned on your lights, you would pay the same price for the energy you used as the price you were paid for the energy you generated. This meant that solar’s value proposition was a match made in electricity-bill-defeating heaven. For both David and Lucy, business was booming.
Then along came TOU and things got complicated.
A Seismic Shift
Under TOU rates, the cost of a kWh of electricity fluctuates based on peak energy demand in relationship to the time of day. With so much solar being exported to the grid during the day, demand on the utility is low and therefore the price is low. Since solar produces electricity during off-peak hours when the sun is shining, under TOU it generates a very low credit from the utility.
But at night, when solar is no longer producing and demand is high—because everyone gets home from work, gets into their comfy clothes, turns on the lights, fires up the game, and cools down the house—prices are high, really high. The cost of a kWh ranges from seven cents per kWh during the day (off-peak) to fifty cents per kWh in the evening (high-peak)! Unfortunately for solar owners or those contemplating purchasing solar, TOU rates are a deal killer.
Sales Process Interrupted
For David and Lucy, TOU rates forced them to rethink their offerings, but what were they going to do? Well, David had survived this long by leveraging his construction background and figured he would simply need to market and sell based on quality of the equipment, craftsmanship, and his company’s longstanding reputation for providing quality service.
To David, nothing was more important than a handshake. He cared about
his customers’ long-term interests, so he planned to up the ante on his customer service, to make sure he would help his current customers and gain new business by word-of-mouth. But there was still one fundamental problem with his approach: TOU rates ruined traditional solar’s repayment
model. No matter how great the customer service, the monetary advantages of solar no longer penciled out.
Embracing the Change
But Lucy was excited about the advancements in technology she was reading about and their application to energy management: artificial intelligence, blockchain, the Internet of Things (IoT), and Smart Homes. Knowing that utility industry changes like TOU would threaten the old model of solar, she knew she needed to teach her customers to make their solar investment future-ready.
In other words, they needed to be prepared to adjust for the changes that would continue to come. This meant she had two options to boost her sales: first, start promoting batteries; second, get smart and employ some new tools.
Lucy soon realized that by leveraging technology, she could mitigate the disruption caused by TOU. One of the most promising was the Energy Management System—like naak’s energy cloud platform—which gives customers control over their energy allowing them to shift energy usage to off-peak times when electricity is cheap.
An Intelligent Solution
Imagine having a value creation device or brain that knows how to
maximize the value of your solar, battery (if you have one) and do so in response to changing utility rates. Telling your AC to cool off the house before peak pricing begins just before you get home on a hot summer day and to run your pool pump from inexpensive off-peak utility power. Or visualize not having to wake up in the dead of night to plug in your electric vehicle to avoid high charging costs; simply automate charging your car
with your app and never think about it again.
naak’s Smart Hub platform integrates and controls your entire energy ecosystem based on your utility rate tariff, your learned usage patterns and energy needs allowing your solar generation and (for certain customers) battery storage to automatically make the best choices for you. This is the difference between smart and intelligent homes. Smart systems are simply connected to the web, while intelligent systems make the best energy decisions for you the moment it’s needed, so you don’t have to think about it.
Empowering the Customer
When Lucy knocked on the doors of potential solar customers, TOU was now her competitive advantage and she quickly become their trusted advisor. In her sales pitch, Lucy taught her potential customers to ask the right questions when buying solar:
- Will my solar system be smart or intelligent?
- Will my solar be future-ready and reduce the impact of changes in the energy industry?
- Will I have the ability to control, monitor and visualize my energy consumption?
During her presentation, she opened up her laptop to demonstrate how solar’s value proposition worked under the old model and what would happen with TOU rates. Then she showed how an energy monitoring system could avoid the pitfalls that would come with TOU rates. She pulled out smart plugs to demonstrate how energy was being wasted by certain appliances and how her customers could turn these on and off remotely from their phone.
She taught her customers that by controlling their energy intelligently, they could maximize the value of their investment and feel safe knowing their solar investment was future-ready, regardless of the changes that occurred in the energy market. With solar, intelligence meant more savings and improved lifestyle.
Failure to Pivot
David took a different approach out of the gates. He doubled down on his marketing efforts and when he met with potential customers he continued to tout his outstanding construction and customer service.But his solar sales plummeted. He kept running into intelligent customers that asked the questions Lucy taught them, understanding that his value proposition wasn’t viable long-term.
Lucy also increased her marketing, but by promoting energy monitoring and future-ready solar investments, her sales grew exponentially, even picking up clients who turned down David.
Disruption as Competitive Advantage
What we know for sure is the energy industry will continue to change. TOU rates will not be the last seismic shift the solar industry encounters. Intelligent energy management ensures that an investment in solar isn’t squandered and adds value to its owner and the grid.
By integrating smart energy technologies with solar systems and batteries, consumers can reap the benefits of being nimble enough to adapt their energy usage patterns to the utility rate changes that are always around the corner. The ability to control energy consumption and resources is the winning strategy.
Nowadays, David has learned his lesson. He is selling naak with every solar system and even engaging customers who aren’t ready for solar or battery storage. But he’s working harder than ever to gain customers he lost. Lucy, on the other hand, has never been so busy. She hired several employees to expand her offering into smart energy management, batteries, and solar.
The sales pitch is easy: Save more no matter what the utility imposes on you with an intelligent energy management and value creation device. Control your energy consumption, protect your solar investment, and enjoy peace of mind for years to come.
Don’t be a David. Get smart and be a Lucy.