As part of a huge roofing company, GAF Energy says its customer-acquisition costs are lower than the industry’s average, giving it an advantage.
GAF Energy, the solar roof company owned by global roofing manufacturer Standard Industries, says its contractors have deployed “hundreds” of installations since its January launch, suggesting it may be outpacing larger rival Tesla.
While much of the attention around solar roofs has focused on Tesla, GAF Energy has been quietly deploying its solar roofing systems. Though the company declined to provide specific deployment numbers, GAF Energy’s estimate of “hundreds” of roofs deployed would appear to put it well in front of its highest-profile competitor.
Tesla had installed only 21 solar roofs as of February 2019 in the service territories of California’s three largest investor-owned utilities, the nation’s largest residential solar market, records show. A Tesla spokesperson told Greentech Media this number is low and unrepresentative. Tesla said it is installing solar roofs in eight states but declined to offer specific deployment figures.
Standard Industries first unveiled its “roof-integrated” DecoTech system in 2017. This year it created a new standalone company, GAF Energy, to house the product, with Martin DeBono — former CEO of solar developer 8minutenergy — brought on as president.
“We believe that roofing and solar products are on a trajectory to merge,” Robert Lahey, GAF Energy’s vice president of sales, said on the sidelines of Greentech Media’s Solar Summit last week.
In contrast to Tesla’s sleek tile-like solar roof, GAF Energy’s product sits flush against the roof but is still recognizable as solar paneling.
“There are a lot of folks trying to make that killer product. I don’t think anyone has solved it yet,” Lahey said. “But I believe we have…the best roofing-integrated product out there on the market today.”
“We haven’t bumped into [Tesla] in the market,” Lahey added.
GAF Energy is aiming to massively increase the penetration of residential solar by cutting down on customer-acquisition and installation costs. It has a unique advantage over most solar installers and developers in that regard: Rather than signing up customers through traditional channels like door-to-door sales or in-store marketing, it finds them when they’re shopping for a new roof, using leads from its broader roofing business.
Standard Industries claims it’s the world’s largest roofing manufacturer, with offices in the U.S. and Europe. GAF, a subsidiary, has certified roofing contractors in all 50 states, installing 1.5 million roofs each year — equivalent to one in four residential roofs built in the U.S.
“Most people get solar today by proactively getting sold solar by a solar company,” said Lahey. “It’s flipped with our equation.”
“We’re essentially merging the product itself — both solar and roof — and we’re merging the customer experience,” Lahey said. “There’s a lot of optimization for all parties when you do that.”
GAF Energy is seeing lower-than-average customer-acquisition costs for the rooftop solar market, Lahey said, although the company declined to give exact figures. The “overwhelming majority” of GAF Energy’s business comes from inbound requests or referrals, he said.
Customer acquisition is the most expensive part of a residential solar system, representing 21 percent of the average system cost, at $0.65 per watt, according to Wood Mackenzie Power & Renewables.
National residential installers pay the most to bring in new customers, while local installers tend to have lower customer-acquisition costs.
Some companies — including Tesla — are experimenting with more passive ways of selling residential solar, though no company has yet perfected it. Tesla recently announced it would close many of its stores, instead relying on a smaller backbone of retail locations plus online sales.
While Tesla’s customer-acquisition costs dropped from $0.84 cents per watt in the first half of 2016 to $0.40 per watt in the second half of 2018, the company’s residential installations dropped from 650 megawatts in 2016 to 208 megawatts last year as it chases more profitable sales.
Tesla may have higher brand-name visibility among would-be solar customers, but GAF Energy said it has a name that contractors and roofers recognize. Its presence across all U.S. state markets could also offer an edge, though for now the company is focusing its solar efforts on nine states, including California and the Northeast.