I like Groupon. I think the concept is great and I've purchased a few items from them over the past 2 years. But lately I've been a little annoyed that it seems the only Groupon customers are people interested in facials, pedicures and massages. So I was pleasantly surprised last night when I saw a Groupon for a solar deal from One Block Off the Grid in Atlanta!
I've known about One Blog Off the Grid (1BOG) for awhile now and I think it is an excellent concept. Basically, 1BOG does the following:
- Finds a bunch of people in a community interested in solar
- Educates them on the basics of installing solar on their home and financing the purchase
- Helps to pick the right installer
- Gets low install rates based on economies of scale
The Groupon deal enables Atlanta residents to put $1,100 dollars toward their solar installation for a purchase of $99. The groupon lists this as a 91% discount, but since the purchase price of a solar system will be much higher than $1,100, the discount is going to be less, but still nice.
My biggest question had to do with how 1BOG got paid, and thankfully they address that on their FAQ page:
One Block Off the Grid is free to all participants! The reason it works as a business is that all solar installers pay fees in exchange for customer referrals. When we take a whole community and give a solar installer access to everyone in that group, they are getting a lot of new customers, and they pay us a referral fee per home.
The referral fee is the same regardless of which installer wins, so it does not affect our selection decision. Our interests and our members’ interests are always aligned. No money changes hands between us and the members, and the fee is a small fraction of the actual discount. Any price we quote in a campaign is the price you see, and the referral is already worked into it.
From my own research, I know solar installers are willing to pay a nice sized referral fee just for those interested in solar, but 1BOG is offering something better to installers: those ready to plunk down the money to buy solar! My only question on this is that if 1BOG negotiates discounted install fees with an installer to begin with, does the installer then:
- Take $1,100 off the final price they were going to give the customer without the Groupon.
- Raise his install price by $1,100 dollars knowing that it is going to be taken away?
Referral fees are nice, but I don't think they're on the order of thousands of dollars (much of the cost of a solar installation is in hardware and labor, so there isn't that much profit to give as a sales commission/referral fee), so I doubt 1BOG has the margin to give that money back to the customer, unless they just want to operate at zero-profit in order to gain entry into the market? Since each install will be different, there really isn't a way to know if a customer with the Groupon is really going to be getting a good deal in the end (unless two customers had the exact same system on the exact same roof).
My advice if you are interested in a Groupon for solar installation: Do some solar research on your own and contact some solar installers in your area for a quote. Or if you don't want them to come out to the house, take a few pictures of your roof and a few basic details and shoot them an email asking for a basic cost estimate (you can even tell them why you are doing this).
My next question had to do if the job went out to multiple installers, or just one, and they also answered in the FAQ for the question, "Do you always pick giant solar installers?":
We usually make it a winner-take-all program to keep it simple and have it be the most effective. That means we need an installer that’s big enough to handle the One Block Off the Grid group. This is the way we do it right now and our goal is simply to get as much solar on as many roofs as possible. We hope that this rising tide lifts all ships in the market. As we get older, we’re going to start some market development programs where we’ll partner with several smaller installers.
I've done some work with a solar installer in Atlanta, and let me assure you there are no "giant" installers here. It is mostly operations consisting of a few full-time employees and where the install work is contracted to people they trust. But maybe a solar installer in Atlanta will use the 1BOG to ramp up!
I can't wait to see how 1BOG progresses in my community and if 1BOG hasn't made it to your city yet get a campaign started!