Diversify Your Solar Business for Long-Term Success

The solar industry is evolving, and with it, the challenges contractors face. During a recent conversation with a solar contractor, they shared a troubling experience: their TPO/lease finance provider couldn’t pay them for installed systems due to cash flow issues. Instead of cash, they were compensated with equipment—a partial solution, but far from ideal.

Unfortunately, this isn’t an isolated incident. Contractors relying solely on TPO/lease providers have encountered similar struggles, especially as some providers face financial instability. To mitigate these risks, some companies have tried working with multiple TPO providers, thinking it creates a safety net. However, this approach often increases operational costs. Different providers come with varying requirements for contracts, approvals, and documentation, creating inefficiencies and administrative headaches.

So, what’s the solution? Diversify.

Adding customer-owned systems to your strategy is a proven way to create a more stable, diversified cash flow. While TPO/lease deals remain a valuable option, expanding into cash and loan-based systems allows you to tap into the growing 60+% of homeowners who prefer to own their solar systems. Here’s how it can transform your business:

Why Diversify with Customer-Owned Systems?

1️⃣ More Control: Cash & Loan deals let you own the customer relationship. You decide the service level, build trust directly, and avoid dependency on third-party providers.

2️⃣ Diversified Revenue Streams: Maintain your TPO/lease pipeline while reaping the financial benefits of customer-owned systems.

3️⃣ Get Paid On Time for Service Work: With warranty-backed systems, you’re compensated for parts, labor, and service efforts—reliably and on time.

4️⃣ Streamlined Payments: Say goodbye to the delays and incomplete reimbursements that often come with TPO/lease agreements.

5️⃣ Unlock Additional Revenue Opportunities: Battery upgrades, system expansions, and R&R (removal and reinstallation) for re-roofs can become direct revenue sources for your business.

6️⃣ Drive Referrals: A strong reputation for reliability brings organic growth through word-of-mouth and repeat business.

A Strategy for 2025 and Beyond

As we approach 2025, contractors have a unique opportunity to set themselves apart by diversifying their business strategy. Here’s how to get started with implementing customer-owned systems:

1. Assess Your Current Portfolio

Start by evaluating how much of your business relies on TPO deals and identify areas where cash or finance deals could make sense. Cash or financed systems could complement your current offerings and create more balance in your revenue streams while allowing you to be more competitive in certain markets.

2. Partner with Trusted Financing Providers

Look for partners that align with your service standards and can integrate smoothly into your operations and proposal software. Different loan partners have different rates and loan structures, so looking at your options and choosing the right mix of loans for homeowner needs is paramount.

3. Leverage Warranty Solutions

Integrate a 30-year, insurance-backed warranty like Solar Insure to differentiate yourself in the market. A strong warranty not only protects homeowners but also ensures you’re compensated for service work, turning the burden of service work into a reliable income stream.

4. Train Your Team To Sell Value

Ownership deals require a different mindset to sell compared to TPO deals. Selling cash and finance products requires a greater emphasis on the value behind the product and the company offering it. Developing rapport with the customer and taking time to educate them can make the closing time a little longer, but when done properly empowers customers and gives them a greater level of confidence and satisfaction in their project. 

By taking an education and value-centric approach, salespeople elevate their brand and the solar industry as a whole. Train your team to assess a homeowner’s needs and recommend the right product to achieve their goals. Rather than push one product all the time, educate homeowners on the value of everything you have to offer. 

5. Enhance Customer Education

Help homeowners understand the financial and operational benefits of owning their solar systems. You can highlight the return on investment, lifetime savings, lifetime cost compared to TPO products, increased property value, and greater control over future system additions. 

6. Start Strong, Scale Strategically

Target homes with optimal solar access and leverage local markets with special incentives to maximize your success. Ownership is the future—start by showcasing the unmatched benefits to this key segment and build momentum. Train your team to adopt a proactive mindset, focused on delivering the financial freedom and control that ownership provides. Don’t wait—ownership isn’t just a shift, it’s a game-changer for your business. Lead the charge, and capture the market before your competitors do.

7. Focus on Relationships

Emphasize the trust and reliability that come with owning the customer relationship. As their trusted solar provider, you’ll be a beacon of stability for them and their energy needs long-term. By providing exceptional service, you’ll not only drive referrals but also position your business as a leader in your market.

The Opportunity Awaits

By balancing TPO/lease deals with customer-owned systems, you can create a diversified, resilient business model that is better equipped to handle the ups and downs of the solar coaster. A diversified product portfolio ensures more consistent cash flow, long-term growth, and a greater ability to adapt to market trends.

Let’s build a stronger, more sustainable solar industry together!