Service Contracts- was - Warranty transfer [RE-wrenches]

[Graham Owen]

Mo,

I used to sign solar homeowners into maintenance contracts but I stopped
doing this about 10 years ago.  Having a nice book of service contracts
will make it easier for you to project with greater certainty future
income.  This is helpful for acquiring credit lines at your bank, and
increases the saleable value of your business.  The problem is that you
have an obligation to perform this service.  About 14 years ago 90% of
my business was preventative maintenance service, system repair and
removal and replacement of panels for roofing. I had about 240 service
contracts at that time.  Interest in solar pool heating and water
heating started making a comeback and there was enough work in L.A. to
install full time again, well almost.  There is definitely more money to
be made installing as opposed to servicing.  You are probably wondering
why I didn’t just hire a full time service guy.  I charged at that time
$60.00 per hour for service, this was justified because I knew the
systems well and had a truck fully stocked with most any part that may
need replacement.  A very efficient operation.  Well, having to setup an
additional vehicle, with parts and tools, to send someone else into the
field for service calls did not appear profitable. I stopped renewing
service contracts.  Now that the install business is so strong in L.A.,
pool and water heating as well as PV, it would be very distracting
having this obligation.  I still repair old systems for my existing
customers, but this has become a very small percentage of my work.  None
of the guys that work for me now would be able to efficiently
troubleshoot and repair so many different types of old thermal systems.

Since the solar installation business can be seasonal, no installing
when it rains a lot in the winter (which didn’t happen this past
winter), sending out convincing preventative maintenance letters lets
you perform service when it's best for your schedule.

Graham

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