How low can you go?

[Energetic]

Local competition are advertising 4kW fully installed for £5,995. Anyone doing them this low?

They have two business units, 3 vans/teams and a fleet of salesmen in smartcars, a marketing department. I reckon with that kind of margin and overheads they need a pretty high volume to keep things going...

 

[Gavin A]

We're in the process of trying to work out our pricing strategy, and it really does depend a lot on how many jobs per month we can realistically expect vs if we're more likely to get more work via lower prices etc.

I suspect that the general price for basic systems is going to end up around that level though, but hopefully we can compete more on higher quality kit and installs for a bit more than that, maybe with some extra energy saving package deals or something.

 

[SRE]

We couldn't make anhy money at those prices and I'd rather stay at home watching Jeremy Kyle than slog my guts out to break even! It's all about keeping your nerve - we've just been to a house tonight, E/W facing he's been quoted between 7 and 8 by all the installers that have been round. He asked us if we could do 6.5k as advertised on the Internet and I said not if he wanted us to come out and sort any problems that may occur later in the installation and he was fine with that.

I heard to day about a firm in Scotland advertising £4,995 for 4kwp! Maybe Greg Barker has taught them how to get their installation prices down!


Did you see the PV Kits Direct ad - showing a £1500 profit on a 6k system. They must get their EPC, structural survey, marketing, registrations etc etc free - they didn't seem to be coming out of the costs!

 

[Energetic]

These are their 'starting from' prices. I'm reckon they don't want to do them at that price as much as we don't. It's likely a hook to get their salesmen in the door. +£600 if scaffolding required, +£30 per panel slate surcharge, +£500 twin strings etc etc.

I'd rather do 1 or 2 a week and do it myself than employ teams and have all that extra stress. Also i'd miss standing out in the rain all summer...

Not seen the pv kits add, have you a link?

 

[Eco Deal]

They must be selling rubbish to be honest.

£4995.00 Id like to see there system spec
£5995.00 Id also like to see what they are selling ... you need to sell 2 per day to make that work TBH.

I thought I was cheap selling at £6995 for Yingi 265w which is a quality panel

 

[JulianC]

Reckon I could do a chirpy chirpy cheap cheap straightforward 4kW for £6295 easily enough, using UE Solar 250W panels and a Chinese inverter. Could go sub-£6k on a bungalow. One a week would do. Mind you, we have low overheads - there's only 2 of us, working from our respective homes with a shagged Transit between us

 

[SRE]

I work from home and we couldn't do a job for that price. It wouldn't cover our costs - what you going to do when your shagged out transit needs replaced? If we can hit a job a week our overheads are £1250 before we've paid for roof and electrical work.

 

[infinity]

I have a customer tomorrow to see who wants 14 panels, ive priced yingli at £6000, thats a 6 year payback! The investment still stacks up, i could install budget ET solat at £6000 for 16 being a one man band, Thats still over £1500 profit, you cant expect to keep earning more than that from jobs as things have changed, too much competition, if you do not make the £1500 out of a job someone else will!

 

[SRE]

The point is you're not making £1500, that's your gross profit. Last year we did 15,000 miles across 2 vehicles, that's £130 a job before you've started. Take a minimum salary £115 a job assuming you're only one person - if like us you're a 2 person team working 50 hours each a week on a slow week that's £230 a job. Then there's insurance, phones, broadband, trade body registration, MCS registration, structural survey, replacement tiles, lead flashing, paying yourself a proper day rate for doing the spark ork (if you don't do this you're working for less than minimum wage - why bother?) MCS certificate fees, QANW equivelant fees, EPC, marketing, accountancy, stationery ..........

£1500 doesn't look quite so go then - unless you're doing 5 jobs a week, every week and I don't see that happening soon do you?

We want to be here in 10 years time serving our customers so it's important that we don't engage in the rush to the bottom, encouraging the govt to cut the tariff again.

 

[sedgy34]

The problem is theres too much competition and not enough enquiries out there, dont be fooled the company with the vans ,smart cars etc can only last so long!!!

 

[Gavin A]

I think we've just decided we're going to be charging £5,995 for 16 x Jetion 245Wp poly, plus Power-One 3.6 Out-D as our bargain basement offering.

We found we were losing jobs because we were being under cut last quarter, with our success rate dropping significantly, and I'm paying our staff regardless of whether we have the work in or not.

Thing is though that most of our customers actually went for Hyundai or the black black panels anyway, so hopefully we can make a bit more for those systems but use the other to ensure we're not getting undercut (hopefully).

We're also looking at offering a package of energy saving measures in with the price, but then bumping the actual price up, so we can get 2 days work out of each customer. IME most of the low cost energy saving measures have payback times that are lower than PV, so doing this ought to allow us to offer improved paybacks on the overall package, as well as meaning we're not just competing in the race to the bottom on price.

I must admit that the last 4 months have really shocked me with how bad they've been / how much of a scrap there's been for the few customers that are out there. IMO this has nothing to do with the actual paybacks people have been getting, which have been better in percentage terms than last summer, and everything to do with lack of confidence / bad publicity compounded by severely bad weather for most of the period. I actually reckon that the survival of much of the industry now depends on the weather for the next few months, as well as us all somehow managing to get more positive publicity / confidence back in the industry.

 

[infinity]

I see where youe coming from SRE, but what im getting at is you simply cannot pass all those overheads onto single jobs, the money is no longer in it. I do mainly electrical work so for me its jump onto solar when it comes up, so all my usual overheads are covered as there were before from electrical side, to have the MCS registration etc doesnt add up as much as you would think when you already have all the van, tools, registration part p etc. I do not spend on marketing, i have a website but i just buy leads occasionally, i had 10 jobs last month ( solar) 3 from leads, so the £1500 bottom line on the job is plenty, i spend 1 day planning, paperworks etc, one day install, thats after i have paid roofer etc. The EPC and IWA is all in the job cost not out the profit.

 

[Gavin A]

actually, I'm having second thoughts. I don't think that prices actually need to fall below about £6500 to make it viable at 16p, which gives us a lot more wiggle room.

 

[sedgy34]

ive had customers saying from day 1 its not the cheapest quote im interested in, then after a few days and quotes the cheapest is there choice
have done 1 install with samsung.

 

[SRE]

I'm not greedy, I just want to make a living and know we'll be around after a hard winter for our customers. I think we give the customer an excellent service, we're not the cheapest but we're not the most expensive and because we charge a bit more we can take time over the installation making sure the customer knows what everything does and making sure that the installation is as tidy as possible.

On ridiculously low margins we wouldn't be able to install to the level we want to, last week we spent 2 hours getting a cable discreetly in a house rather than taking it outside, another job we did we lifted the landing carpet and the floorboards and relaid it all after the cable had been run instead of running external cable. It all takes time and by not cutting the price to the bone we can cover unexpected problems without having to run back to the customer for extra cash or taking a hit out of an already meagre profit.

There will always be people who want to shop at Lidl, Sainsbury's & Waitrose - and there will always be providers of the different level of service. The only reason prices are dropping as low as they are is because installers are panicking, haven't been able to keep reserves when times were good and are giving in to the downward pressure. If I wanted a job I'd go and work somewhere else where there's loads less hassle. I wish installers would stop underselling themselves - it doesn't do anyone any favours in the long run.