August 8th, 2011

How to Start a Renewable Energy Company – Part 1

Chris Williams

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TOPICS: BOSTON

BOSTON -

Starting in September, aside from working with HeatSpring, I’ll be moving up to Maine to help one of my best friends get his renewable energy division off the ground. For me, it’s not about the money, it’s about having fun, learning, and actually using my hands to build something from start to finish. It will also help me to establish credibility and confidence in order to purchase and renovate a building. My issue with most (not all!) solar and geothermal contractors these days is that in the name of efficiently they are segmenting business roles into more and more specific tasks. It’s not that that it’s bad business, it just gets boring for me.

I’ve installed many systems, designed a few, but also want the experience of testing some of my marketing and sales assumptions. Personally, I’m not sure if I’m interested in staying directly in the EPC world, its a tough business and the competition is only getting more intense (I should know, HeatSpring trains hundreds of contractors every year). With that being said, it’s very important to actually understand how these systems are being installed. Really understanding the technology will lead to better communications, positioning, and branding of the whole industry. Also, understanding the process can lead to more business opportunities by figuring out how to make jobs more profitable. There are a lot of opportunities selling to contractors that are installing projects to help them do their jobs easier, faster, and more profitably. These business opportunities – selling to EPC contractors – tend to have higher margins, be more scaleable, and have less competition then working directly in the EPC world. The size of this opportunity is relatively large, mainly because of the “newness” of the industry,  it’s current “smallness” (which makes some larger players not consider it) and its high growth, you can mess up many times and still have a viable business.

While creating the division of this company I’ll share every step and hope to uncover the “secrets” of renewable energy. It should be fun.

A lot of residential and light commercial renewable energy work is starting to be picked up by general contractors, like Jamie Leef of S+H Construction in Cambridge. Why? General contractors are in a unique position to pick up this work because they’re used to managing projects, sales, and it supplements their existing business.

Beginning in September, I am going to be working with one of my best friends in Maine to create their renewable energy division. My friend Gilbert took over his father’s residential construction company. It’s a small local company in coastal Maine that has a repuation for building high quality, energy efficient homes. Read below for the full article.

I’m going to keep a journal of the journey on Heatspring Magazine because many of the issues we’ll be dealing with are common for everyone in the industry. What am I going to be discussing? Everything that a small business must do to make money; establishing our marketing and sales strategies, performing site visits and creating sales proposals, applying for incentives, the design process and lastly, the installation process. My goal is to be 100% open and share everything we learn. I have absolutely no fear that me sharing this material will mean less business for us. In fact, I feel it will sharpen our business strategy, writing has a tendency to do this. Read below to get this specifics.  If you like this idea, have any questions, or are working on a similar project, feel free to leave a comment or ask me on HeatSprings facebook page.

Step 1. Where are we now? What capability does the company already have?

The first thing I’ve done when speaking with Gilbert is to catalog our current capabilities. The company has a solid reputation in the region for high-qaulity work and building super-energy efficient structures. Their focus has always been on creating the most efficent shells possible and now we’re looking to supplment those skills with renewable energy.

What does this mean for the new renewable energy division? It means that we have existing relationships with all the drillers, electricians, engineers, building departments, plumbers and roofers we’ll need to complete any job we need to. In addition, because Gilbert and his father, Jonathan, are building experts, I have a huge knowledge base to tap into if any technical or building related question come up that I cannot answer. This decreases a lot of risk me, I’ll never feel that I’m getting in over my head.

Step 2. What are we lacking?

Given that we have all the capacibilties to design and install the systems, WE JUST NEED MORE SALES! Duh, that was easy to figure out. So, I’m going to take some of my own adivce. In the past, I’ve suggested creating a free renewable energy workshop for property owners to bring your potential customer to you. This is exactly what I’m going to do. In fact, it’s the only marketing I’m going to do.

What will I include in the first presentation?

Note: It needs to be quick and high impact. 20 – 25 minutes max. People have short attention spans so every second needs to be useful to the homeowner.

  1. Establish my credibility. How do I know how to design and install renewable energy systems? Why should they trust my financial calculations?
  2. Outline the problem. I will not address climate distruption because most people in Belfast will already be familiar with it, and it tends to polarize the audience. However, they may not be familiar with building science facts and numbers. It will be key to address the most common issues in a homes energy usage, and address durability and comfort. The goal will be to allow property owners to self-qualify and select themselves. The reality is that 98% of homes need some sort of work, even if its just a little more insulation and air-sealing.
  3. Run though the solutions. Go over the basics of energy audits, how solar and geothermal systems work, and weatherizing. I will keep the solutions quick but each will run through this same pattern: A) Where the technolgoy works (remember self-qualificiation), roof orietnations, building characteristics. B) how they increase the comfort and durability of your home C) and the financial benefits of each technology. If you invest in this XX technology, what are your typical returns.
  4. Emphasis government incentives. This seems to get people really excited.
  5. Provide CLEAR NEXT STEPS. If a potential customer is interested I need to make it CRYSTAL CLEAR what their next step is.
  6. Ask them if they have any questions. I want to make sure to provide plenty of time for anyone with questions.

How will I market the free workshop?

1. Create a simple, compelling title that is useful to the customer. There are a few themes I’d like to utilize when brainstorming possible titles.

  • Make your home as comfortable as possible - A large percentage of Belfast’s community are retirees
  • Utilize government incentives. Why not?
  • Get strong financial returns with little risk – again most people are retirees. So, they’re planning on living in their homes for a long time and are looking for high return places to put their money.
  • Be a responsible citizen.

2. A couple titles could include….  (keep in mind I’ll be doing this in the fall, before the winter in Maine)

  • Free homeowner workshop: preparing your home for winter
  • Utilizing government money to save you money this winter
  • Investing in your home to get high returns at low risk
  • 10 reasons you’re paying too much for energy
  • Making your home more comfortable and paying less for energy

3. Create a one-page flyer and bring it to local businesses. Belfast is a small town, so ‘small town marketing’ is what will drive attendance. Something that might not work in Boston, where people don’t really know each other, could work in Belfast. Also, because I grew up there, I know a lot of the people in town.

4. Create 3 to 4 different flyers and create a different URL for each based on the message and then track how much traffic to the event each landing page gets from each URL. This will give me an idea which message is more effective.

5. Make the workshop regular. Either once a week or twice per month, I haven’t figured this out yet. This will be key for people spreading the word. They need to be able to easily remember the day of the the week, location, and time to tell their friends.

What will I be using as feedback to tweak the workshop? What will I look out for?

  • What do people respond to? Watching the crowd as I make the presentation, their faces, their head nods, are they falling asleep?
  • What are people asking questions about? What do they not understand? What do they want to know more about?
  • What makes people come and talk with me after the presentation?
  • My hunch: There are going to be a few points that either 1) confuse people or 2) get them really interested in investing in a project. The goal will be to decrase 1 and increase 2.

How will I leverage the presentation for future marketing?

  1. As we complete jobs, I’ll add more pictures and customer testomonials to the workshop to increase our credibility.
  2. I will record the first presentation and create a CD to pass out to prospective customers to help educate them before I make a sale visit, so the time will be more productive and have a greater chance of leading to a sale.
  3. Put the presentation on a landing page (created with unbouce.com) that will have people fill a form to get a site visit.
  4. Run a local google adwords campaign for just my zip code (04915) and direct people to the landing page.

Have a Standardized Followup and Site Visit Process

I’ll follow up with all participants and perform site visits with the most interested one.

Performing high quality and efficient site visits is absolutely critical to the success of profitable solar projects, especially residential projects! You need to be able to capture all of the information you need to 1) quote the system correctly 2) design the project and 3) inform the installation crew what to expect. An efficient site visit process will lead to smooth operations and profitable jobs while complex process can lead to unprofitable jobs and a lot of confusion.

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Chris Williams

About Chris Williams

Chris Williams is the editor of Green Light Distrikt and Chief Marketing Officer at HeatSpring . He has experience in business development, prototyping and new venture research with a focus on geothermal heat pumps, solar thermal and solar photovoltaic technologies. Chris is an IGSHPA accredited geothermal installer and NABCEP certified solar installer. Chris is focused on solving customer facing issues in the creation and adoption of clean energy technologies and products. Chris has installed over 300kW of solar and tens of geothermal systems. He's invented the PV Pal , developed many trainings at HeatSpring, publishes the NABCEP Study Guide , the Hitchhikers Guide to Cleantech and has done due diligence research for Urgent VC . Feel free to connect with him @topherwiliams , on Linkedin , or through email about new ventures, collaborating, writing, research or whatever is on your mind.

  • http://www.facebook.com/aaron.desatnik Aaron Desatnik

    Chris, this is great. I love that you’re sharing your experience – it demonstrates a lot of integrity on your part. The one thing I’d add about getting the word out is to build relationships. As you know, business is all about trust, and that’s particularly true in new sectors such as renewable energy. I’d encourage you to pound the pavement, utilize your network to connect with people (ie use your second-degree contacts), and have fun. I found that one of the most inspiring parts of my job at The Green Roundtable was building partnerships with associations either by phone or in-person, and just getting to know each other. It’s what community organizers call relational meetings, what business people call strategic partnership meetings, etc – regardless of what you call it I’d say the key to getting a new, untested business off the ground is building relationships with key people and then delivering on your promises. Good luck!

  • Corey Krohn

    Interesting post and a unique business model.  I own an energy-efficient home construction company and I also am a geothermal contractor.  I can acknowledge that the sales and marketing part of my business is completely lacking.  I need to be comfortable that I could support an increase in demand for my services but haven’t really had the time to determine that.  I could see where someone who does what you are or want to do would be very useful to someone like me.  Feel free to add me to your mailing list.  By the way…make sure you use spell check for your posts, lots of errors makes it seem less professional. 

    Corey Krohn
    Green Building Solutions, Inc.
    Windham, CT

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  • http://www.thegreenlightdistrikt.com Chris Williams

    Corey, 

    Thank you taking the time to leave a comment and the spell checking. Believe it or not, I do spell check, twice. My writing has also been a weakness and I use the blog as a means to improve thought it’s still not perfect. 

    Regarding it being a unique business model. How is it unique? I agree, it’s not typical in the general construction industry, but I feel thats because a contractor that needs to spend money on marketing is doing some wrong! On the alternative energy side this is true to some extent, the best companies will have more then 50% of their business from from word of mouth, but they can still push that world of mouth around as well. 

    Chris

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