Competition briefing. How the UK solar water heating industry tried hard to smash up Solartwin’s disruptive technology!
The solar industry big boys
- Used their dominant position to control the regulations to block us, time and time again. Whoever controls the regulations controls the market – particularly when state subsidy is what makes or breaks markets.
- Even ordered us to back off when we started showing either how our technology was better or when we started exposing certain actions as market manipulators.
As a consequence, for many years UK’s solar thermal customers have faced informational and product and installer choice constraints imposed on them unreasonably.
Solartwin’s deliberately extended non-eligibility for subsidy meant that UK solar consumers faced artificially constrained technological and plumbing safety options in a market which could, and indeed should, have been wider. Compared to a balanced market, UK consumers had a reduced chance of, first of all, finding out about us, and second, even if they did find out about us our competitors exploited our non-listing for subsidy as a huge reputational slur to divert sales away from us (and towards them).
In terms of our sales and marketing presence, several long term exclusions from state subsidy schemes totally several years were regrettable. We gained less business than we could have done because we were not listed on the Clear Skies / LCBP “subsidy gateway” websites. This non-listing, which happened because of competitor interventions in self-regulating regulatory processes reduced the number of inquiries reaching us for several reasons. First of all the such database were one of several obvious places for inquirers to start to search for reputable suppliers. Secondly our absence from these listings sites negatively affected our “Google rankings”, which in turn meant that the chance of interested members of the public finding us via the main alternative route of Google searches was also reduced. (QUANGO type sites sometimes get extra points in the Google ranking algorithm and this boost can also affect where they point to.) Thus leads to us were dramatically reduced by both factors interacting synergistically but negatively.
On top of this loss of inquiries / leads, which are obviously the life blood of all direct-sell businesses, including ours, even when the substantially diminished number people actually managed to contact us, we faced huge upfront reputational damage to contend with, which further cost us business in favour of our competitors, who could claim, far better than we ever could, to be “officially supported”, “credible”, “grant-approved”, or “mainstream” and so on. So we lost even more business on this Clear Skies / MCS grant eligibility status credibility issue.
Out of the remainder of the reduced number of potential sales that were left for us to quote for, ie those which had got to us despite all these exclusions, we then had to then give large discounts, typically £400 “in lieu of grant”. With a typical contract value of £4000, this discount is approximately a 10% discount in order to address the solar consumer’s, fully valid, “I cannot get a grant with you so cut the price please” challenge. Consider the destructiveness of this huge level of discount on our potential for growth in the context of a business which in its best year made 7% profit on turnover during its 12 years in business.
Coupled together, loss of reputation, diminished inquiries and reduced sales penetration within those inquiries which eventually reached us anyway, coupled with deep discounting to get what deals we could, meant we traded at a loss in several supposed “grant-boom” years whether others in the industry made good profits and were able to grow dramatically on the basis of retained profits.
It is our opinion that UK solar thermal customers have been ripped off and inappropriately diverted into buying old solar technologies which are less safe and less sustainable than ours and that some members of the solar thermal industry have set out to deliberately to damage us by:
- Reducing the supply of leads (customer inquiries) which can ultimately supply us with business (no access to STA customer leads, not on STA / IDHEE site, past exclusions from regulatory listings etc)
- Missing or negative representation in numerous guides / regulations (including the vital STA / BPEC solar plumbing guide which wrecked our potential market via installer-resellers)
- Preventing our consumers from getting subsidy / delayed regional / national accreditation (eg MCS / Clear Skies / Solar For London / Solar Clubs)
- Eroding our credibility with consumers (including temporary or permanent non-listing in MCS Clear Skies, STA, IDHEE sites etc)
- Promoting a unreasonably narrow range of business models such as local installer-reselling while marginalising our low-carbon business model (remote surveying using aerial photos & national direct-selling by phone)
- Refusing trade body membership (STA / IDHEE)
- Possibly persuading key UK consumer influencers to take sides, such as Which? Magazine to condemn our business model in a “solar cowboys” article.
- Limiting access to timely inside-industry information and consultation input so we cannot influence and plan ahead as well as others.
- Reducing our income and profitability dramatically while also increasing our costs such as advertising, marketing and legal fees.
I hope this summary is useful to readers in showing our perspective that the solar heating consumer currently fails to get a balanced choice in terms of solar thermal system design, performance and Legionella safety. That our superior, innovative but disruptive technology has faced a comprehensive and apparently organised boycott by the UK solar thermal industry. Looking more optimistically, given the right momentum, it seems that all of these challenges could be corrected, and the solar thermal market could start working properly quite soon, if a competition regulators were to intervene constructively.