Newbie looking at solar install in Fremont, CA

[russ]

seems like alot of people here have too much free time to be endlessly debating this.

having said that, i believe that the market forces will dictate what referral kickback (and therefore price gouging the next person) is worth for a quality referral someone who was worked with the vendor before. this could be due to many reasons, one that comes to mind is likely saving time/hassle by taking a referral from someone that has seen that contractor's work.

again all this stuff exists because people are willing to play that way. likely people who value their time/convenience- maybe more than some people on this discussion board.

Whiny type? Unless you personally know the person recommending a solar sales company you can't believe anything the person says - he wants the 500$ kickback.

[gheewala114]

Totally agreed!

seems like alot of people here have too much free time to be endlessly debating this.

having said that, i believe that the market forces will dictate what referral kickback (and therefore price gouging the next person) is worth for a quality referral someone who was worked with the vendor before. this could be due to many reasons, one that comes to mind is likely saving time/hassle by taking a referral from someone that has seen that contractor's work.

again all this stuff exists because people are willing to play that way. likely people who value their time/convenience- maybe more than some people on this discussion board.

[russ]

While respecting your opinion:

1.) Kickbacks are budgeted as marketing costs and are assigned to specific jobs as opposed to general marketing costs which are spread among all customers.

2.) General marketing costs such as broadcasting, net, phone canvassing etc will not be reduced in any measureable way by kickbacks. The Google plugs or radio ads will still cost the same, meaning the kickback costs will add $500 or so to the cost of a specific job, be identifiable and assignable to that job, and also, a justification, ethical or not, as a way to pad that specific job. That cost must be made up some way or have the total marketing costs increase, leading to reduced profits or higher marketing costs, or some combination of both.

4.) If I was a project engineer for such a job and/or I was responsible for that job's profitability, which in effect started out $500 in the hole, I'd feel a strong motivation to find a way to add $500 worth of profitability to that job in any # of ways from padding/creating adders to skimping on materials, to hedging perhaps bloated factors or safety etc, etc. in ways solar ignorant customers can't even conceive much less understand. I don't like it or excuse it, but I do recognize it as possible reality. Some think that unethical. Some think not. Either way, it can happen and is driven by the profit motive. Often, the methods remain hidden and thus fear of consequences reduced or eliminated, increasing the likelihood of such actions.

3.) Kickback costs may be spread among all customers, but are easily identifiable and assignable to specific jobs and thus easy to recover from those same specific jobs. This is usually easier to do because the customer is often "presold" by the referring "friend" and less likely or unfavorably predisposed to get other bids. Great for the vendor. One possible outcome is that the price does not go up, but job quality suffers. There is little to prevent or offset such deterioration except the integrity of the vendor. If chances of being caught skimping on quality are slim to none, I'll bet on the profit motive as having a better chance of winning out. Call me cynical.

4.) Nice try but, I did not write, say or imply, nor do I believe that the lowest priced vendor will be the one with a zero marketing budget. Such an idea makes little sense to me. IMO, If connected at all, prices and marketing budgets are f(market conditions, management savvy, luck, hard work). One is only peripherally connected to the other, if at all.

5.) I'd suggest your statement : "If a company can tack on an extra $500 because you aren't paying attention they will..." is one that, IMO, is at least as cynical as mine. I agree with you that the kickback costs will be made up any way they can. I've been saying that from the beginning. Perhaps the difference in our two statements is more in the wording than the substance. What you call tacking on an extra $500 because someone is not paying attention, I call screwing the naïve who think they got a deal. I see little difference in the meaning or substance of our statements except the choice of words. If so, calling some of us cynical seems a bit like the pot calling the kettle black.

Selling solar doesn't appear all that much different in some ways from other businesses I've been associated with. I didn't make the rules, and I don't like all of them, but that's how I see the game run, with apologies to vendors who take offense to my opinions.

Totally agreed!

[J.P.M.]

I think you guys are being too cynical. These kickbacks are budgeted as marketing costs. They are spread across all customers as are all marketing costs. A company that is able use their marketing budget effectively and reduce customer acquisition costs will have more competitive pricing. By the same token, if a company can tack on an extra $500 because you aren't paying attention then they will (regardless of whether a referral is involved or not).

If a $500 kickback drives more business then $500 worth of google adwords or a $500 AM radio spot then that's what a company will do. According to you cynics the lowest price provider will be the one with zero marketing budget.

I guess you can put me in the camp that is in the market for a bridge...

While respecting your opinion:

1.) Kickbacks are budgeted as marketing costs and are assigned to specific jobs as opposed to general marketing costs which are spread among all customers.

2.) General marketing costs such as broadcasting, net, phone canvassing etc will not be reduced in any measureable way by kickbacks. The Google plugs or radio ads will still cost the same, meaning the kickback costs will add $500 or so to the cost of a specific job, be identifiable and assignable to that job, and also, a justification, ethical or not, as a way to pad that specific job. That cost must be made up some way or have the total marketing costs increase, leading to reduced profits or higher marketing costs, or some combination of both.

4.) If I was a project engineer for such a job and/or I was responsible for that job's profitability, which in effect started out $500 in the hole, I'd feel a strong motivation to find a way to add $500 worth of profitability to that job in any # of ways from padding/creating adders to skimping on materials, to hedging perhaps bloated factors or safety etc, etc. in ways solar ignorant customers can't even conceive much less understand. I don't like it or excuse it, but I do recognize it as possible reality. Some think that unethical. Some think not. Either way, it can happen and is driven by the profit motive. Often, the methods remain hidden and thus fear of consequences reduced or eliminated, increasing the likelihood of such actions.

3.) Kickback costs may be spread among all customers, but are easily identifiable and assignable to specific jobs and thus easy to recover from those same specific jobs. This is usually easier to do because the customer is often "presold" by the referring "friend" and less likely or unfavorably predisposed to get other bids. Great for the vendor. One possible outcome is that the price does not go up, but job quality suffers. There is little to prevent or offset such deterioration except the integrity of the vendor. If chances of being caught skimping on quality are slim to none, I'll bet on the profit motive as having a better chance of winning out. Call me cynical.

4.) Nice try but, I did not write, say or imply, nor do I believe that the lowest priced vendor will be the one with a zero marketing budget. Such an idea makes little sense to me. IMO, If connected at all, prices and marketing budgets are f(market conditions, management savvy, luck, hard work). One is only peripherally connected to the other, if at all.

5.) I'd suggest your statement : "If a company can tack on an extra $500 because you aren't paying attention they will..." is one that, IMO, is at least as cynical as mine. I agree with you that the kickback costs will be made up any way they can. I've been saying that from the beginning. Perhaps the difference in our two statements is more in the wording than the substance. What you call tacking on an extra $500 because someone is not paying attention, I call screwing the naïve who think they got a deal. I see little difference in the meaning or substance of our statements except the choice of words. If so, calling some of us cynical seems a bit like the pot calling the kettle black.

Selling solar doesn't appear all that much different in some ways from other businesses I've been associated with. I didn't make the rules, and I don't like all of them, but that's how I see the game run, with apologies to vendors who take offense to my opinions.

[prhamilton]

I think you guys are being too cynical. These kickbacks are budgeted as marketing costs. They are spread across all customers as are all marketing costs. A company that is able use their marketing budget effectively and reduce customer acquisition costs will have more competitive pricing. By the same token, if a company can tack on an extra $500 because you aren't paying attention then they will (regardless of whether a referral is involved or not).

If a $500 kickback drives more business then $500 worth of google adwords or a $500 AM radio spot then that's what a company will do. According to you cynics the lowest price provider will be the one with zero marketing budget.

I guess you can put me in the camp that is in the market for a bridge...

[JCP]

what is your cost breakdown? Hardware cost and install cost?

No idea. Price is all in. I can do some back of the envelope math though:

Panels: 4080 x $1.10 = $4500
Inverters 16 x 130 = $2100
Rails = $1000 ??
Electrical HW = $500

Hardware = $8K
Install = $7K

My guess.

[Ward L]

what is your cost breakdown? Hardware cost and install cost?

[prim]

Update. Permit has been received. Electric work is ongoing. If anybody wants to know whom I used. Ask and I'll PM. Not looking for a referral fee.

I am interested but cannot send you a PM

Thanks!

[JCP]

Update. Permit has been received. Electric work is ongoing. If anybody wants to know whom I used. Ask and I'll PM. Not looking for a referral fee.

[silversaver]

So, when you spend thousands of dollar purchasing a solar system for your home and you don't bother to shop or compare price. Just because your friends or neighbor's referral? How naive?



People ask for referral, regardless. OR spend your own time doing research.

[J.P.M.]

So without the referral fee, the company gets its sales and marketing for free?

That's pretty cool. Where can I get some of that?

No, the other sales and marketing fees are part of the overall cost of doing business, just like taxes, office operation and such and are spread over all customers, and are of an unrecoverable nature. Broadcast advertising and cold calling fit this type of expense.

Kickbacks are different. That cost is recoverable by specific actions that affect specific customers and transactions and are recoverable by any manner of specific ways affecting specific customers or situations, often by screwing the naïve who think they got a deal.

[J.P.M.]

yes, but if that vendor has a competitive price / or better than the competition for a very similar system/final product then who cares. Better to go with "Screw your buddy plan solar inc" than "Im charging you even more - now bend over - solar inc"

Maybe I'm too cynical or sold things for too many years, but for those who believe the new customer won't be paying more (or, depending on the competitive situation and their cluelessness, more likely getting less for their money than others who aren't on the screw your buddy plan) because the referring customer will get a kickback, I have a bridge for sale. If I was a new customer, I'd keep my mouth shut about referrals until after I got all the quotes back.

I think the above assumes the vendor has no knowledge of the referral prior to quote. At the risk of a rhetorical question, I wonder what would happen to the price if the referring customer and the new customer didn't mention the referral until after quotation.

There ain't no free lunch.

[russ]

So without the referral fee, the company gets its sales and marketing for free?

That's pretty cool. Where can I get some of that?

Someone wants to pass it along for free it is fine - when they get a kickback they are no friend of mine.

It is not a "referral fee" - it is a kickback - meaning maybe you can rely on the guy providing the information and maybe (probably) not.

[pleppik]

You guys love the "screw your buddy" kickbacks don't you!

So without the referral fee, the company gets its sales and marketing for free?

That's pretty cool. Where can I get some of that?

[russ]

yes, but if that vendor has a competitive price / or better than the competition for a very similar system/final product then who cares. Better to go with "Screw your buddy plan solar inc" than "Im charging you even more - now bend over - solar inc"

Just learn what the kickback amount is and reduce their offer to you by that much. Tell them to love it or leave it.

There are many vendors out there - sometimes it is better to pay a bit more than go for the lowest bidder - the lowest bidder often knows what they are worth.