How fintech can boost solar company margins and ROI
In this special edition of Contractors Corner, leaders in the solar business management platform BluBanyan and bank-to-bank payment software company Payment bank talk about how financing technology can help increase margins and ROI of solar companies. Listen to the full episode here or in your favorite podcast app.
How does BluBanyan’s SolarSuccess platform reduce soft costs?
Jan Rippingale, CEO, BluBanyan: We are mainly looking for error reduction and automation of tedious tasks. This includes calculating commissions that properly account for the adders you have, calculating how you’re going to pay your installers, and tracking that as the project changes over time. For example, if you have a different roof size than you initially specified, you will get a different number of modules. That changes the system size, which changes all the math. By allowing that change to automatically reflect and flow throughout the system, we can reduce those errors and lower those soft costs.
Then we connect with partners like Paystand to bring in that extra juice to make sure we can minimize soft costs as best we can.
How does Paystand technology fit into the SolarSuccess program?
Rippingale: The SolarSuccess program is built on NetSuite as an accounting platform and Paystand also integrates with NetSuite as an accounting platform. If you are a SolarSuccess customer, we have the email templates you need for solar customers and the basic structures you need to set up the Paystand initially so you can start taking advantage of it right away.
When installers opt for a free, bank-to-bank transaction via Paystand, they save 9¢/watt on that subset of customers, in addition to being able to make other types of back-end processes run smoother for everyone else.
How can Paystand’s payment technology improve ROI for solar companies?
Mark Fisher, VP of Marketing, Paystand: Many solar companies have wafer-thin margins, so achieving a meaningful ROI is a challenge. Solar companies are really looking for new, creative ways to increase their ROI. Paystand as a technology can really help there. You can think of us as a Venmo for business, making that payment transaction seamless, easy, intuitive and much, much cheaper. We believe the payment process should be free of charge, so we’ve built a bank-to-bank payment network that makes it easy for payers to connect their bank directly to the solar company or merchant in the same way you or I would pass money through Venmo , with modern security standards that are robust.
ripping eel: If I could just emphasize that, Mark – they can choose to do these bank-to-bank transactions with no credit card fees. It is something that regularly frightens installers of solar panels.
Fisherman: We think the payment infrastructure as it exists today is a barrier to businesses. It penalizes them for growth – the more companies charge, the more they pay in transaction fees. We believe that the business model should change. Our bank-to-bank network is completely free. We can eliminate that 2.5-3% credit card surcharge from every payment, and that’s a game-changer. Our entire business model is subscription based, so the same way you went to blockbuster as a consumer and paid VHS or DVD per transaction fees, then Netflix came along and ended up charging a flat fee each month to stream as much as you want – that’s how we work. You subscribe to the Paystand platform and within a certain volume level you can process as many payments as you want.
That’s the first way we increase ROI for businesses. The second way is that we strongly believe in automation, so we automate many of the manual processes from the financial cash cycle. Finally, we accelerate time-to-cash. Time-to-cash is critical for any business, but especially in this industry where margins are so thin. Having that money to invest back into the business and more strategic projects is essential.