What is the best converting source of residential solar leads in the US in 2018?

Published on 26 Jul, 2018 by Andrew Sendy

4 minutes read

Categories: Solar 101

In recent years, many solar installers have become wary of purchasing leads because of the Cowboy salesmen that exist within the solar leads industry. These cowboys promise huge numbers and great returns but never deliver. They say they generate hundreds or thousands of leads per day but if you Google any phrase relating to solar panels you can't even find their websites.

By knowing just a few tips and tricks the of the lead industry it is quite simple to spot these frauds. It is important that you learn to do this because if you are stung by bad lead vendors, it will probably stop you from buying leads from the good and reliable lead vendors.

How do I generate my own organic leads as a solar installer?

Organic leads refer to leads that weren't sourced through a lead vendor or by paid traffic.

People that fill out a form on your website or referrals from previous customers are some examples of organic leads.

When you offer solar at a reasonable price and conduct high-quality installations, referrals from the friends and families of previous customers will come and will most likely be your single highest converting lead source.

Every customer will almost always have friends and family also fed up with paying huge utility bills, and if you are professional throughout the installation and sales process, they will most likely give your recommendation.

However, what solar company owners tend to find is that the volume of these leads is too low to sustain and grow a business.

A solar company needs a minimum volume of jobs to be economical. If you are doing too few jobs, then your fixed costs have to be recovered from fewer jobs, and you tend to find it hard to price competitively.

The next step for small or new solar companies is often to try some localized advertising or hiring an SEO (search engine optimization) expert to help get your website closer to the top of Google rankings.  The more sophisticated solar companies may also try publishing articles relating to renewable energy on their website to increase site traffic and try and get more of those highly converting direct organic leads.

However, it here that most solar companies hit a brick wall and realize that there are players out there that spend so much more on their websites and marketing that their own efforts to increase organic traffic are futile. A small installers website can't compete with sites like SolarReviews or EnergySage who spend millions of dollar per year on their websites and have been doing so for years.

It is at this point that owners of solar companies turn to companies selling solar leads. I would estimate that 70% of solar companies fail with solar leads for one of two reasons:

  • The first lead vendor they use is one of the fraudulent lead vendors; or
  • They are lucky enough to partner with one of the good solar lead vendors, but they fail because they do not have a sophisticated enough sales process to compete against the largest and most sophisticated solar sales teams that are also buying the same leads

However, many solar companies are making millions of dollars a year from buying solar leads (and growing strongly) because they have both use the best lead vendors, have screened out the fraudulent lead vendors and then optimized their sales process to a high level.

Many of these companies call new leads within 2 minutes and will call 7 times on the first day to make contact.

How do I spot fraudulent solar lead vendors?

Often what these sort of companies will do is approach you and say they source 2,000 leads per day or some other absurd number through the web or telemarketing.

As the largest spender on web marketing by a long way in the solar industry in America even we only source about 400-500 leads per day.

What these guys typically have is a database of 200,000 or so old leads form 4 or 5 years ago, and they are just trying to get whatever they can for them.

The way you catch them out is to ask what website or web add they use to generate them. Then you can use websites such as semrush.com or similarweb.com to view how much traffic their site gets. Usually, their sites will have little to no traffic as they are just a front for scamming people. For a lead vendor to source, just 10 leads a day would require traffic of about 30,000 people per month.

How do I spot fraudulent telemarketing leads?

Some of these lead vendors will be so fraudulent that they will hire their own staff to pretend to be potential solar buyers on the phone. Ask them how many windows the front of their house has or the model of car in the driveway if you hear them scurrying to look up google maps they're probably a fraud. Another good thing to ask is what school district their house is in. Fraudulent telemarketers tend not to know this either.

You can learn more about avoiding bad solar leads and selecting the best solar leads.

What cost of acquisition or conversion rate should I expect from the best solar leads?

If I were to try and sell you two leads a day each at $100 and 1 in twenty would lead to a sale of an 8kW solar system you'd most likely tell to go away, however, that wouldn't be wise. If you sell at $3.00 per watt an 8kW system would bring you $24,000 in sales, so for every $2,000 you're generating $24,000 in sales. Sounds pretty good to me.

Leads from our sites typically convert at 5% or 1 in 20 however, some installers tell us our leads convert at up to 7.5% or 1 in 13-14.


Most installers have an emotional reaction to 4 or 5 bad leads and get an impression that buying leads isn't profitable. The trick is not to take a few bad leads personally, make sure you are still selling 5 out of 100.

How much do solar leads cost in my area?

The cost of solar leads varies with their quality. Each solar lead is generated through a call to action, usually on a website.

Each call to action has its own characteristics in that it can ask for more or less information and it can be more or less spammy in its wording.

For instance, wording that says “compare quotes from solar companies” will yield half the leads but at double the quality than a call to action saying find out if your eligible for a free solar system.

This is why looking at the cost of leads alone is a mistake. Leads are sold into the American solar market at anywhere between $10 and $200 depending on how they are generated and the quality of the QA process they go through before they are sold.

Another reason looking at the cost of leads alone when deciding what leads to buy is a mistake that some leads are sold to up to 7 solar companies, (this has been the EnergySage model),  but some are sold to only one or two solar companies. As at June 2018, the average SolarReviews lead is sold to 2.3 solar companies. This has a huge effect on cost of acquisition.

The problem with focusing on the cost of a lead is that you end up buying from the vendors who have made their calls to action misleading to increase lead volumes, have a poor QA process to sell more leads or worse, you end up being the poor sucker who buys leads from the fraudulent lead vendors that are mainly recycling old leads.

Looking at the cost of a lead source alone is probably the worst metric to look at to decide whether or not to buy those leads. However, for those that can't go past this metric then here is the typical cost of solar leads in each state in 2018

A more meaningful way to measure leads is conversion percentage. This is the percentage of leads that convert into a sale. It is sometimes also useful to use other metrics such as the rate of conversion from lead to an in-home appointment.

However, the ultimate metric is cost of acquisition. We get new solar companies contacting us each week and when they ring up and the first thing they ask is “how much are our leads” we know they are not an experienced lead buyer. Experienced lead buyers, particularly the successful ones, usually ring up and say I would like to do a trial of your leads to establish the cost of acquisition I get from them with my sales process.

The truth is good leads are very hard to generate, and they are valuable. Selling solar at $3 per watt means there is around $10,000 of gross margin in an average 7kw residential solar job. This means that lead buying is extremely profitable provided that your cost of acquisition is at or below $2,000 (perhaps up to $2500 in California). What tends to happen though is most new solar companies fail with lead buying because they get emotional about the 11 out of 12 leads that don't end up buying from them. They get angry, want to reject leads, and then the best lead vendors refuse to sell leads to them.

This is human nature; no-one likes paying $135 for a lead that doesn't buy from them. However, the smart solar companies just measure the cost of acquisition and realize they are making a fortune out of lead buying and provided one in 12 buy solar from them they are generating a job with $10,000 gross margin for a cost of acquisition of $1,620.

This is a 600% return on their lead spend and good business in anyone's language. You can calculate how much return you are making on your lead spend by using the SolarReviews solar lead buying return calculator and entering in all your own numbers. You will be amazed at how profitable buying solar leads can be even where only one in 12 buy from you.


See for yourself why SolarReviews has the best solar leads

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Author: Andrew Sendy

As chairman of Solar Investments Inc and chairman of the largest solar panel installation company in South Australia, Andy is passionate about solar power. With his unique working background he writes on the residential solar industry in America from a unique perspective.