In order to support my baseball card habit as an adolescent in Brooklyn, I resorted to working as a door-to-door New York Times subscription salesperson.
Man, I hated that job.
Speaking of door-to-door sales, SolarCity had a company-wide meeting today, according to a source, and announced that door-knocking salespeople at SolarCity/Tesla are now a thing of the past.
We asked Tesla for a comment and here's what they had to say:
“As part of the integration with SolarCity, we have decided to eliminate our door-to-door sales channel for our energy products. After careful consideration, we believe this decision reflects what most of our prospective customers prefer, and will result in a better experience for them. We have recently begun to expand our retail and online channels for energy products, and we expect the growth of these channels to end up more than offsetting the loss of door-to-door sales. The vast majority of affected employees will be reassigned or provided an opportunity to interview for other positions that will help support our expanded retail efforts, the overall success of the company, and the delivery of new solar and storage products across the country.”
This shouldn't come as a complete surprise. A recent Tesla SEC filing included this: “We plan to reduce customer acquisition costs by cutting advertising spend and increasingly selling solar products in Tesla stores.” GTM stopped by a few Tesla stores last month and didn't see a lot of solar offerings, but we'll be checking back for an update.
A recent episode of The Energy Gang took on the topic of door-to-door sales. Stephen Lacey, gang leader noted, “It's kind of the exact opposite of the software platform-based approach.”
GTM Solar Analyst Nicole Litvak, added some perspective: “A lot of companies spun out of Vivint. People left Vivint and decided to start their own door-to-door sales company. Some of them were just doing the origination and then selling those systems to other companies. There's a company called Legacy Power that originates for Sunrun. Some of the other companies were actually doing the installs themselves, like Suncrest Solar. Since those original companies, no one else has really been able to scale nationally.”
Gang member Jigar Shah might be on the side of door-to-door, saying, “In the end I think this is going to have to use tried-and-true methods, right? Sort of old is new, like Avon or Amway or whatever.” He added, “In this business, I don't think much has changed since people were selling encyclopedias door-to-door or vacuum cleaners or anything else. I think the Internet is great for data, but otherwise, this is really about just old is new business models.”
Attila Toth, CEO of PowerScout, an AI-driven marketplace for smart home improvement, recently wrote in GTM: “Residential solar customer acquisition costs are now twice as expensive as the actual solar panels, the most important component of the system. This is crazy.”
“Customer acquisition costs must be reduced by an order of magnitude,” he added. “Achieving this goal requires a fundamental shift in the way solar is sold.”
And today's move by Tesla is certainly a fundamental change in the way solar is sold.