Every year, roughly 5% of US homeowners look lonely at their aging and weathered clapboards, sigh, and take the financial plunge to get a new roof. Martin DeBono, President of GAF Energy, sees this as a potential turning point for homeowners, where everyone can make a decision: they can simply replace their roofs. Or they can turn them into investments that generate electricity and income.
Do I just replace the roof or do I make an investment?
Image: GAF Energy
DeBono has been in the solar industry for some time, most recently with SunPower, who runs the global residential and sewer business, before joining GAF Energy (a subsidiary of Standard Industries, the world’s largest roofer manufacturer). He has seen the sector move forward, and while he is confident that the solar industry will continue to achieve efficiency gains and module cost reductions, he says it is not currently. The solar modules now make up a relatively small part of the total installed cost stack. “And it’s the opportunity to take these other costs out and offer better products that we at GAF Energy have a chance.”
A solar business based on transaction efficiency
When DeBono joined GAF Energy, he stepped down to evaluate the business and available assets: “I realized you were sitting on a gold mine. Let’s start a business to capitalize on Standard Industries’ assets. “The company was already a large investor in commercial-scale solar projects, so it was familiar with the industry. The next step was to define a go-to-market strategy for the residential space. DeBono’s goal was to create what he calls “the world’s first truly sustainable solar company” that doesn’t rely on tax credits or financial techniques like leasing or purchasing power contracts to deliver a compelling value proposition.
Instead, the approach was to take advantage of an already inevitable event – a roof replacement – and apply efficiencies, existing partnerships and economies of scale to build a solar business that builds on that transaction. With this approach, GAF Energy believed that the soft costs, especially those related to sales and installation, could be reduced significantly.
The company currently offers its solar product in nine states including Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Illinois, Florida, and California. In those markets where channel partners are talking to potential customers about a roof replacement, DeBono comments, “You say this is the roof estimate, but did you know it is solar suitable too?” The contractors explain the potential of transforming the roof from a static asset to an income generating asset. If the customer expresses interest, the roofers pass on the information on qualification, a size estimate and an offer to GAF Energy.
According to DeBono, this doesn’t make the conversation about roofing spare parts too difficult. If the client continues, the same crew that installs the roof will also lay down the panels in a single and efficient transaction. The result is: “You can cut sales costs, lower labor costs and make a sensible cash offer.” The company focuses exclusively on the market for the replacement of residential roofs. DeBono characterizes the resulting savings as roughly 15-20% compared to buying both items separately. It stays away from new homes that need rooftops for the simple reason that new homes are almost entirely a funded market.
Equipment of its business channel partners
In order to effectively convey its value proposition to partners and customers, GAF Energy offers its existing roofers two days of sales training (optionally a third day). The company also provides sales consultants who can accompany the contractor on home visits.
In addition, it offers training courses on the roof for contractual partners who carry out the actual installations. Typically, trainers will take part in the initial installations of a particular crew until the team is comfortable going it alone. DeBono points out that installation is easier than most solar offerings because “we don’t sell conventional rack-mounted solar systems. In our case, the sun is the roof. The panel is not placed over shingles – it is the roof and there is some underlying material. “
The technology itself includes 360 watt panels that can be integrated into the roofing materials. GAF Energy can be obtained from multiple suppliers as the company simply buys high quality solar laminate without a frame. The product is guaranteed for 25 years and a further 25 years to protect against leaks with a “Golden Pledge” option offered by the first-class contractors at GAF Energy.
Although not every GAF roofer is interested, it offers the opportunity for many to expand their market and impart new skills to employees. DeBono comments that many roofing companies are family businesses of the generation, with “a new generation of roofers who grew up with an awareness of technology and climate change … sure, not every roofer steps in, and we don’t expect them to. However, we work with a select number of roofers who see the future. ”
While GAF Energy has been in business for less than a year, DeBono states that sales have been respectable despite declining to offer a certain number. “I will say that. It was solid enough that we doubled our workforce. We are now 70 years old. ”
Perhaps the most interesting thing is that the company has seen the best adoption in areas where traditional solar is not widespread and competition is limited. Comparing states like Pennsylvania, Illinois, and Florida to the California market and his “everyone gets into a three-quote dogfight,” DeBono points out that the lesser-highlighted states are some of the healthier markets. “That’s because we can act as homeowners in a place like Pennsylvania and offer a repayment that makes sense in the context of a roof top sale that dedicated solar vendors can’t.”
Future market development
While energy storage is not part of the current business model, DeBono believes batteries will ultimately be tied to a growing number of future solar systems, especially as battery costs continue to fall and storage technology improves. At the same time, GAF Energy does not always sell systems that are so large that they either store electricity (or have to export it to the grid as part of an existing net metering arrangement). “If you want to bring shingles to market, you don’t have to give the customer the largest system possible, but you can get exactly the size they want. The best return on investment cannot always be achieved with the largest system, ”he says.
DeBono formulates a vision for the future in which solar looks much more like a traditional roof product. “When you think about it, it’s like taking a flat screen TV and screwing it on the roof. By and large, that hasn’t changed in the last 20 years. “He hopes that will change. “If you were wondering what success would be like over the next 5 years, I would say you would have a product that looks like a traditional roofing product and that can be installed in a market that incorporates the existing solar supply chain and that from it resulting roof chain uses in a higher investment rate. “
DeBono sums up the potential this way:
In five years, I see success in the fact that we can fundamentally change the way in which customers use solar and get a solar roof instead of regular roofs. We plan to innovate as much in the form factor as we do in the go-to-market model.