The amount of solar energy connected to the national electric grid has increased more than 20-fold since 2008, as millions of Americans choose clean technology to power their lives. As solar use has grown, technology development, commercialization and the scaling of manufacturing processes have all helped drive down solar hardware costs, according to the Department of Energy (DOE).
The “soft costs” of going solar have not declined nearly as rapidly. Defined as the non-hardware costs associated with moving to solar, soft costs include permitting, financing and installing solar panels, as well as all the expenses solar companies incur to acquire new customers, pay suppliers, train staff and cover their bottom lines.
These soft costs comprise as much as 64% of the total cost of a new solar system, according to the DOE, and make up the largest component of any installation. When a solar installer runs its business using incompatible technology applications that don’t “talk” to each other—and when each area of that business has its own individual applications and data sets—the soft costs can add up pretty quickly.
Blu Banyan, a Berkeley, Calif.-based Solution Provider and SuiteApp developer with a dedicated NetSuite practice for the solar industry, recognizes the challenges of these soft costs and developed SolarSuccess, a NetSuite application specifically optimized for residential and commercial solar installers of all sizes. The NetSuite/SolarSuccess solution helps installers leverage the rapid decline in hardware costs over the past decade, while making the reductions in soft-costs necessary to improve organizational efficiency, profitability and competitive position.
5 Ways ERP Reduces Solar Soft Costs
Here are five ways that a unified, cloud ERP built for the solar industry helps installers effectively reduce their projects’ soft costs and improve their profitability on every project.
1. Replaces widely-used, off-the-shelf software. As companies grow, incompatible “point” applications that don’t scale effectively or profitably in combination—including widely-used programs like QuickBooks and Salesforce—all eventually have to be replaced, at ever-greater financial and disruption costs. In their place, companies are turning to integrated management solutions that support all the core company functions, including accounting, finance, project management, inventory/procurement, sales/marketing and human resources.
2. Provides reliable, real-time data. Without good data providing visibility across all company operations, scaling productively is next to impossible for solar installers. “When you’re working with incompatible, incomplete, out-of-date data, it can turn into a nightmare pretty quickly,” said Blu Banyan’s Chief Executive Officer Jan Rippingale. “To improve efficiency and profitability, solar installers must have real-time visibility into their entire end-to-end businesses.”
3. Breaks down information silos. Many installers continue to use programs like QuickBooks to run their businesses even as they scale up to meet the growing demand for solar power. Because QuickBooks doesn’t “talk” to Salesforce.com—and because Salesforce doesn’t integrate with job-costing tools—an installer’s procurement, accounting and sales teams are working from different playbooks. This siloed approach simply doesn’t cut it in today’s flat, collaborative world, where both internal and external partners need common technology platforms and data compatibility.
4. Integrates all aspects of the installation business. SolarSuccess brings sales pipeline management, CRM, accounting, purchasing, installation project management (including per project costing and profitability), inventory management, customer invoicing, universal financier connectivity and business intelligence all onto a single platform. The solution provides end-to-end visibility on cash flow, profitability, acquisition costs, project tracking and alerts, sub-contractor monitoring and other functions that are keys to a solar installer’s success. “When you’re aggregating a group of point applications—and regardless of how good each of those programs is individually—you really need them to be able to talk to one another,” said Rippingale. “The only way to make that happen, and to effectively reduce the soft costs identified by the DOE, is with an integrated application suite that provides reliable data and a common interface across all functions.”
5. Supports scale and growth. Using an end-to-end, fully-integrated software suite that was specifically optimized for the solar industry, installers can effectively meet the demands of their growing customer bases while also keeping soft costs to a minimum, ensuring profitable growth for the installer. “A lot of companies in this space are at a point where the acceleration in demand literally puts them in the position where they can’t scale or grow further,” said Rippingale. “In fact, many of them won’t even be able to sustain their current profitability levels and competitive position without switching to a system that allows them to use the same data across all of their departments.”
Blu Banyan’s premier end-to-end solar solution has been built on the NetSuite platform to give installers a software stack that’s specifically tailored for their needs. Optimized for residential and commercial solar installers of any size, SolarSuccess helps installers successfully leverage the rapid decline in hardware costs over the last decade with soft-cost reductions that improve margins even as overall installation costs decline. Access this whitepaper to learn more about Blu Banyan’s SolarSuccess product and how it helps drive down the soft costs in a solar installer’s business.