Smart home installation ideas for solar pros

Savant solar customer

Interest in home electrification is growing. Same goes for the product ecosystems that — much like the rug in The Big Lebowski — tie the whole electric home together. Given the ebbs and flows of the solar market, solar installers might be wise to incorporate some of these ancillary “home electrification” services and “smart home” gizmos into their product offering.

In this article, we’ll explore the smart home / electric home services market for solar pros interested in diversifying their offering. This article was originally published in the Q1 2024 edition of Solar Builder magazine. Check out the digital edition and subscribe for free, right here:


Profile of a smart home installer

As more smart home appliances and gadgets hit the market, brands like Savant continue to expand their product arsenal for homeowners and add new sales / install opportunities for dealers.

Savant is a premier home control and automation brand, and one of the fastest-growing smart home companies in the luxury and mid-markets. Savant has about 2,500 resellers in the U.S. and another 2,500 around the world. At RE+ 2023, Savant promoted its new Power product line, which includes home energy storage, EV charging, and smart load management. For more information on the Power product line, check out this Solar Builder webinar.

So, Savant is in a unique position to provide an expanding solar installation business with some options. Savant dealers come in a variety of shapes and sizes, says Ian Roberts, VP of market development for power with Savant.

“Professionals enter the space as it makes sense for them,” he says, rattling off security contractors, audio / video pros, and general electricians to name a few. “We’ve seen a lot of non-traditional companies enter the technology market, so we know how to embrace that and equip new customers with the right tools.”

For example, a retail audio / video store might tack on installation services, and then start to upsell GE Cync smart lighting. Savant acquired GE Lighting, a Savant company, in 2020. An HVAC contractor can install that smart thermostat but also recommend automated window shades to improve a home’s heating and cooling efficiency. A solar installer’s next step might not be as obvious, but smart home brands are clearly courting solar + storage installers.


Profile of a smart home customer

Savant app

Roberts says customers generally start getting into smart home tech for one of four wants and / or needs:

  • Wanting to upgrade their home entertainment system. Audio / visual equipment, WiFi routers.
  • Wanting to enhance their environment. This is more about aesthetics and functionality — lighting, shading, thermostats.
  • Needing better home security or privacy. This could mean simple door entry cameras or complex stations that communicate throughout the house. This could also mean automated shading for privacy.
  • Wanting and / or needing more sustainable and reliable power. This is the newest category in the space and why brands like Savant are folding in home power solutions.

How to expand into smart home installs?

One benefit is the customer acquisition costs could be near zero. Example: Partnering with Lowe’s or Home Depot where do-it-for-me (DIFM) services are prevalent.

“You could be a Lowe’s Pro to install lighting or thermostats people buy nearby,” Roberts says. “We can also pair a solar pro with a Savant dealer in their same market. If it’s completely brand new to somebody, I would always recommend putting product into your house as the contractor and understanding that experience and that value and being able to speak to it directly.”

“We believe that it’s about building ecosystems,” says Jason Conrad, head of go-to-market at Palmetto. “We’re not suggesting that all solar installers should go out and create their own HVAC installation business. What they should do is start thinking about ecosystems within their local market, and how they can do the sales and distribution of those products.”

Palmetto started as a clean energy platform that helped large consumer brands break into the solar space and to make clean energy more accessible for homeowners. Solar installers that join Palmetto’s network (and are approved in their vetting process), then benefit from and Palmetto’s tech tools that aid in sales, financing, fulfillment, permitting, and more.

Palmetto continues to add business-building services to its platform. This year, Palmetto is tacking on home electrification modeling to show savings related to new investments such as heat pumps, battery storage, etc. — and then offer any or all of it under the same no-money down, monthly financing option.
“Rather than hunting one solution at a time and having to continuously incur that customer acquisition cost, you can think more about ‘land and expand,’” Conrad posits.

Palmetto’s Consumer Energy Plans are a third-party ownership product offered via LightReach — a “modernized version of a lease,” according to Conrad. “If you offer the financing and you make that more accessible, and you have the energy intelligence data to show the consumer what they can do, that’s just way more for you to follow up with. You’re always going to be way more efficient from a customer acquisition perspective if you’re selling into your existing customer base versus going out and acquiring new ones.”


Why should I do any of this?

Palmetto

The solar installation business is seasonal, and installers are constantly riding that razor thin edge of profit margin. Sell and install like mad in peak season; survive the down season.

“In the wintertime, you’re selling less solar, but you have the same costs, so you’re burning cash,” Conrad says. “You’re fronting cash for equipment, you’re fronting cash for commissions, and everything of that nature. A lot of solar installers don’t carry big cash reserves.”

Thus, a perfectly healthy business that has consumer demand and quality service can suddenly go insolvent because of a 90-day period in which they don’t have enough cash to float payroll.

Palmetto has opened up its platform in ways that help solve the solar cash flow conundrum. Example: EMPWR Solar, a regional EPC, operates and install as they always have. What’s different now is that they are selling and installing through Palmetto’s platform, which provides software, consumer financing, operating cash flow, equipment, technology, and a digital customer experience.

“We’ve had a lot of interest from smaller companies,” Conrad says, “wanting to use the platform to distribute under our brand, access the consumer financing, use the equipment bundle, and basically get that ‘cash float.’ Because, if we drop ship the equipment to their jobsite, if we front the M1 commission payment, if they use our sales tools, our technology and our financing, then we can help them weather the storm through the down market.”

Back to smart home products, many of these installations are also simpler, single person jobs. They are less time sensitive than a solar install and way less cumbersome to take from lead to install. That automated window covering job or smart light switch installation could easily and flexibly fill downtime for certain crew members.

“Think about the range in skill sets on your team, and if there’s any inefficiency in half of your team waiting on the other half to finish one part of the job,” Roberts suggests. “No problem. Anybody could be diverted to go put that thermostat on the wall or install another smart dimmer and move the overall project along.”


What are my sales opportunities?

Energy efficient lighting. Retrofittable smart dimmers and switches are an easy add for any installer familiar with electrical, and it has a direct benefit to the power side. “Without any infrastructure really, solar professionals can start adding other elements to the home that help the homeowner use less energy, helps their batteries last longer, and makes more of their solar,” Roberts says.

Climate smart thermostats. Another easy job for a solar pro that ties to home energy. All of the wiring is already going to be there for you on most jobs as long as the original system was wired with enough wire, but Savant does have adapter kits.

Shading solutions. Think about managing the sun for the homeowner outside the house, using that electricity, with easy retrofittable shading solutions. They manage natural heat and privacy in the same space.

window shade solution

“That’s a huge play and honestly quite a good profit center,” Roberts says. “There’s a variety of fabric styles that appeal to a wide range of homeowners. Some prefer simpler designs, where others may want to invest more to enhance their decor.”

On a good size window, that shade solution could be $800 to $1,000, plus labor, and “you’re adding to the project quite easily.”

WiFi network. “One thing to just keep in mind is that most smart home technologies, like that smart camera or doorbell, rely on a reliable network to perform well,” Roberts notes. “When you’re looking to install all of these great things, I also recommend taking a look at the WiFi in the house to support these solutions. There is also great value there for providing a better streaming and connected experience.”

Heat pumps. Electric heat pumps are interesting because their peak time of year is generally in winter, when someone’s furnace gives out, and when no one is installing solar. In fact, Conrad encourages solar installers to think about heat pumps and other higher transactional value items instead of smart thermostats and smart heat vents.

“Think more about HVAC and heat pumps or new roofing technologies,” he says. “Let’s say the average margin in peak season is based on just one single installation project. They could really increase that per-install profit margin if they go and offer the consumer financing around HVAC or heat pumps or roofing as an example.”

Whatever new business line you chose, just remember: Do not try to address the entire home all at once. “If the homeowner is focused on enhancing their main living space, start by helping them with their immediate goals,” Roberts advises. “That initial project will expand to other areas naturally and create more opportunities in the future.”


What comes first: solar or smart home?

Savant-solar-customer

First, consider the solar customer. SolarReviews and UC Berkeley’s BEACN consulting group analyzed findings from more than 400,000 U.S. homeowners who submitted a request for a quote from SolarReviews.com between 2016 and 2020. Choosing such a long period of time revealed an especially important tidbit on the value of older leads.

Leads surveyed from the earliest time period (January 2016) were still getting solar installed nearly five years later. More than half of customers made their decision one year after starting the process. Another 68% of survey respondents who had not yet installed solar indicated that they were still interested in installing a solar system in the future.

“We see that in all of our data too,” Conrad says. “What that tells us is consumers, when they are getting into this buying cycle, they take a long time to think about solar. The evaluation cycle for solar is already so long we don’t want to miss the opportunity to go in and start on home electrification.”

Maybe the answer to the question of this subhead is just whatever gets you in the door. “You have the opportunity to build these lifelong relationships and grow your business,” Roberts says. “You’re the technology partner for this homeowner. They are coming to you because they don’t know, or they trust in your expertise. And we all understand how quickly technology evolves, so there’s always going to be new smart home solutions to offer next month or next year.”

The advantage a solar / storage installer might have for selling and installing other products and services is the insight into home energy usage and utility rates. Solar homeowners are more likely to keep tabs on their electricity usage and understand the benefit of other purchases that help optimize that usage.

“You’re adding value by keeping people in touch with what’s possible,” Roberts says. “It doesn’t have to be a hard sell. To me, it’s a longer-term play. For solar installers especially, as we go into these ebbs and flows of a potential recession or dealing with supply chain issues, we have these other options to help these installers even out the business and keep customers over a longer period of time.”

“We want to talk to customers a lot more about how they can have awareness and understanding of their energy production and consumption and really solve this problem, which is you don’t get the full ROI on solar unless you actually change your energy usage,” Conrad notes. “You can, but many customers install solar and then increase their energy usage, and the ROI can evaporate.”

Apps have real value, especially when that app ties all of these various technologies together. Savant’s award-winning app can control both smart home and smart power products. This makes it straight-forward for the professional to deploy, and intuitive for the homeowner to enjoy.


Value of one-stop shopping

The market for everything discussed here is fractured. Think about the reality of an eager, educated homeowner interested in adding solar, upgrading their 20-year-old HVAC with heat pumps, installing an EV charger, and maybe insulating doors, walls, and windows. It is an unwieldy, stressful and confusing customer journey that involves a dizzying array of local contractors, each with their own financing products and, potentially, questionable fees and processes.

Here again, Palmetto helps. Its Energy Intelligence platform has a building-level energy model for 85% of buildings in the United States. In addition to the traditional solar energy proposal, Palmetto can model out energy savings for door and window installation.

The LightReach energy plan cuts one-third out of solar soft costs, according to Palmetto’s data. “We’re always selling those energy plans at a lower kilowatt hour rate than what the utility is offering, and we actually have policies in place around when the consumer has to see savings,” Conrad says. “We designed the pricing so that you can always save in year one if you buy at the right price. Buying at the right price requires you to have the right sales experience.”

Example: Palmetto launched LightReach in Georgia where solar system payback is not great, between 10 and 15 years. Customers with a LightReach TPO plan are showing savings in year one.

“We didn’t open in Georgia to make a ton of margin, but we launched LightReach in Georgia so that we could turn the consumer value proposition problem around, and that’s a big mission of our platform,” Conrad says. “What we’re offering is the financing. If you’re a certified installer of LightReach, you’re giving the customer that one place to make payments for all these home electrification items. That ecosystem of LightReach certified installers is how you can easily pull people in to help with that customer bundle.”

Bundles. Ecosystems. Partner networks. Tying technology together, Lebowski-style. Connectivity is the future of the home, and it might be the future of your solar business too.


Chris Crowell is Editor-in-Chief of Solar Builder.

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