Solar Power Sales Tactics

Cardew

There has been some debate in various threads on Solar Power about the tactics employed by the salesmen in the industry.

I have been sent a promotional letter from a solar power installation firm which promises that by fitting their systems “I will save money and help save the planet too!”

Apparently I have the opportunity to participate in a scheme where my house will be used as a show house and in return I get a significant reduction in installation costs. I can also get interest free credit and my VAT paid. All tactics straight from the “how to sell double glazing, fitted bathrooms or fitted kitchens to the gullible” manual.

Contacting the firm they refuse to even to give a ballpark figure for installation but told me a simple Domestic Hot Water(DHW)system would save 40% of my Total gas bill.( I questioned them closely on this point)

Well considering DHW accounts for about 15-20% of my gas bill it is hard to see how even if it provided all my DHW they could make such a claim.

So I did a search on the internet and the following makes interesting reading:

August 20, 2006]
The sun power salesmen said there'd be hot water - now they are in it
We are told that if we fit solar panels to our roofs, our fuel bills will halve, the value of our houses will rise oh, and we can help to save the planet at the same time. The soaring cost of electricity and gas - coupled with fears about global warming - means that millions around the world are seriously considering switching to solar power.

The news last week that six million Powergen customers will see prices rise by 18 per cent will give yet another boost to the solar industry.

New companies are springing up and climbing on the solar panel bandwagon.

But consumer watchdogs told Financial Mail that several firms have left a trail of customers hot under the collar.

One Dorset company, Simplee Solar, is the subject of several hundred complaints and is now heading for trial at Bournemouth Crown Court accused of making a misleading claim in its sales literature about how much money could be saved.

Other companies attracting complaints include Smart Energy (UK) - where Simplee Solar founder Lee Comer was once a director - Solar Technik, also based in Bournemouth, and Spectrum Energy, which is now in liquidation.

The main problem area does not involve the photoelectric panels sold by High Street giant Currys and other reputable suppliers, but much simpler systems that use sunlight directly to heat water.

'There is a significant and growing problem,' said Sarah Smith, spokeswoman for the Trading Standards Institute. 'The people who were selling dodgy damp-proofing after the floods have started up in the solar business during the hot weather.' Ivan Hancock, divisional Trading Standards manager in Dorset, has put together the case against Simplee Solar.

He told Financial Mail: 'I am also getting lots of inquiries from colleagues in other parts of the country as the solar panel firms hit one area after another.' Hancock said the complaints follow similar patterns. A number of firms use a ruse that can undermine customer rights.

Under the law, if a door-to-door salesman makes an unsolicited visit then any contract signed is subject to a seven-day cooling-off period. Instead, leaflets are delivered offering a 'free survey'.

'The leaflets often mention that the Government has a scheme for grants to pay part of the cost,' said Hancock. 'They can subtly imply that the Government has approved them and the use of the word survey also puts people at ease.' Once in the door, the high-pressure sales tactics begin. One elderly victim said: 'The man was there for three hours.

He made big promises about savings and was very insistent. We could get a big discount if we signed on the spot, but they would be gone if we waited.'

He signed up for a system costing almost GBP7,000, but discovered that it would not work in his home as he had a combiboiler rather than a water tank.

After a threat of legal action, the company blamed a rogue salesman and cancelled the deal.

Hancock said elderly people were especially vulnerable. 'A money-saver that protects the planet for the grandchildren has got to be attractive to many retired people,' he said.

The South Coast had been the first area to see the problems, but it was clear that cowboy solar firms were working their way across the country, he added.

Hancock is urging consumers to look carefully before buying. 'Get more than one quote,' he said. 'Try to get claims in writing and watch out for the difference between total fuel bills and water heating charges.' Simplee Solar boss Comer is adamant that solar companies are being given a rough ride by consumer watchdogs.

'We are a good company,' he said. 'The simple fact is that people don't like direct sales. We are about the biggest solar panel firm in the country so it is no surprise that we get the most complaints.

'But it is not about high-pressure sales.

It is about buyer remorse. People have to sign three separate documents to buy panels.' Comer also blames the children of customers for pushing their parents to cancel orders. 'They see mum and dad spending part of their inheritance and try to persuade them to think again.' Comer said his firm would mount a stout defence in court. 'We are completely innocent and we will fight the charges,' he said."

kittiwoz

I agree Simplee Solar are total cowboys and there are plenty of other firms like them who make false claims, trap people into contracts with no cooling off period, demand payment up-front and overcharge for solar installations.

On the other hand I do think solar DHW has potential benefits for the environment and while it's not a money saver it needn't be the huge rip-off it is with Simplee Solar. If anybody is interested in Solar DHW and wants to look into it with their eyes open they should have a look at the solar water heating factsheet provided by the energy savings trust. Also they might like to use an installer who is a member of The Solar Trade Association whose members are apparently reputable.

Cardew

On BBC1 tonight(Mon 4 Sep) at 8:30pm Rogue Traders examines the tactics of a solar panel salesman.

Skiduck

Cardew wrote:

On BBC1 tonight(Mon 4 Sep) at 8:30pm Rogue Traders examines the tactics of a solar panel salesman.

going to be very interesting, I've heard a lot about the tactics but not experienced them first hand, so this will be the closest I will get.

Volcano

Considering the similar tactics used by double glazing firms in the past, it is heartening that the benefits of double glazing continues to be a good reason to install it.

As long as these cowboy solar installers can be prevented from making outrageous claims and overcharging, hopefully the benefits of solar heating can become feasible and the industry won't become too tainted.

Cardew

Volcano wrote:

Considering the similar tactics used by double glazing firms in the past, it is heartening that the benefits of double glazing continues to be a good reason to install it.

As long as these cowboy solar installers can be prevented from making outrageous claims and overcharging, hopefully the benefits of solar heating can become feasible and the industry won't become too tainted.

I hate to appear the voice of negativity, but perhaps the benefits of double glazing(D/G) will not stand up to close scrutiny; certainly from an economic perspective.

There have been plenty of articles like the one below that question the wisdom of fitting double glazing.

http://www.telegraph.co.uk/property/main.jhtml?xml=/property/2005/11/16/pask15.xml&sSheet=/property/2005/11/16/ixpright12.html

I am in an 18 year old house I had built with high quality hardwood framed D/G. I have already had 3 sealed units ‘blow’(become misted) and replaced at huge cost. From the research I have done I am lucky to have waited 18 years, many require replacing much sooner. I have a Velux widow in a cottage(the largest they make) that blew after 10 years and cost £200. Certainly I am looking at replacement costs over the next few years of £Thousands. I am seriously considering putting in single glazing with thick plate glass as they blow.

If you research the internet there are articles that state it is a time bomb waiting to go off.

Cardew

For those who didn’t see the programme on BBC 1 referred to above it was an all too familiar story of what must verge on criminal deception. Outrageous prices, outrageous claims of savings and outrageous lies.

Leaving that aside the spokesman for the Solar Trade Association put savings in perspective:
For a solar domestic hot water system(which is currently the most cost effective system) he stated you can expect savings at current gas prices of between £50 - £150 per year. To achieve that you should expect to pay between £2,500 to £4,000 for an installation. All this assuming you find a non rip off installer.

So to borrow that money at, say, 6% you will pay £150 to £240 pa in interest to save £50 – £150 a year! Then you can start to work out pay back times on the capital.

We will ignore any costs for maintenance/repair of electronics, pump and installation + anti freeze if required

Volcano

Though interesting we'll put the double glazing issue aside for this thread.....

On your figures above (which are as mentioned in Rogue Traders) we are looking at a pay back time of somewhere between 16 and 80(!) years. Borrowing money to pay for it would be fairly insane, though it's good to point out how insane this is.

The really critical thing here is not just how much money you 'save', but how much your initial capital outlay is. This applies to wind turbines, double glazing, solar power etc. The manufacturers of these products aren't here to save the planet or save us money, they exist to accrue money. It is they who decide how quickly these items pay for themselves as they decide their own profit margins: "Maybe we could install them for £2000 rather than £2500 (meaning it'll pay for itself 5 odd years quicker) but hey! I've got my eye on a new Ferrari so £2500 it is!"

Of course I don't expect them to do it for free, but some of these companies will make hundreds of thousands of £ profit out of people installing these units. How quickly they payback rests heavily with the initial profit these companies are making.

Cardew

Volcano,
Agreed it would be insane to borrow money to pay £2,500 to £4000 as you will NEVER pay back in the life of the system. Bearing in mind that initially each year you are in effect adding to your debt. (taking mid point figures you 'save' £100 on fuel costs and 'pay' £195 in interest.)

However even if you pay cash you are still losing the compound interest on the capital outlay - which at 4% nett starts at £100 to £160 pa.

Then there is the cost of electricity to run pump.

Also everyone just blithely assumes that the system will run for 20 years trouble free.(cos the salesman say so) A system that has electronic sensors, pumps and panels and pipes on the roof exposed to what an English winter can throw at them. Just look at the guarantee offered with the systems! and the chance of it being honoured!

Volcano

If people want to install these systems as a way of reducing their reliance on other fuels and leading a more 'green' lifestyle then I think that is fair enough. Installation costs are still way too high for something that can be done by your average plumber, but once the initial profiteering has gone hopefully the prices will level out.

Offering these as a way of saving money doesn't seem to add up:- a variation on the "give me money and I'll save you money" scam that is centuries old. Interesting that the salesmen on last night's programme never once mentioned the 'green' angle as a selling point. Seems that environmental reasons are not enough to shift units.....

feesh

Volcano wrote:

Of course I don't expect them to do it for free, but some of these companies will make hundreds of thousands of £ profit out of people installing these units. How quickly they payback rests heavily with the initial profit these companies are making.

Why is that when you're in a green industry, it suddenly becomes offensive to people if you make money? (I'm in the wind industry and we get the same allegations thrown against us).

You can't argue with how much money these companies are making. All companies, whatever they sell, are there to make as much money as possible - the market dictates how much they make in the end though.

The same way I know that my car manufacturer made a nice tidy profit on my car, when it was new (although I bought it used) but I'm sure the original purchaser was more than happy to pay a premium because its a good quality car and is heading happily towards 100k miles without problems.

If you have a problem with how much these things cost, shop around, there are cheaper ways of doing it!

As more people become interested in home-grown energy, the price of these things will come down because the market will get more competitive. I know that those companies featured on BBC1 last night were terrible, they made me feel sick, but at least it shows that solar hot water is at last becoming more mainstream.

The trouble is that some of the best solar companies I meet at conferences and exhibitions are run by a couple of 'enthusiasts' and they are bloody awful at marketing!!! They can't yet afford to pay for sales staff and some of the leaflets they produce are literally pages and pages of technical text, absolutely shocking !!! So these cowboys come in and take advantage of that.