Energy transition as a business opportunity: growth strategies for RES companies

The renewable energy sector is currently undergoing a transformation. Companies wishing to stay in the market need to adapt their business strategy to these dynamic changes. One option is to move away from being a technology provider to being an energy transition partner. In this article, I present strategies for renewable energy companies that will ensure that the company not only survives this challenging period, but thrives by transforming challenges into success.

The RES market in Poland 

The renewables industry is a fairly young industry that started with a huge boom in photovoltaic installations. Demand was followed by supply – many new companies were created and started installation services practically ‘overnight’. It was often the case that installations were carried out by people without experience or reliable qualifications. Companies acted intuitively, businesses in the RES industry were just building up. Now I have the impression that the industry is undergoing a transformation in order to cleanse itself and raise the entities that will hold their own in the RES market to a higher level – organisational, competent, focused on comprehensively satisfying the needs of customers whether individual, business or institutional. 

The high dynamics of regulatory changes, delays in the payment of subsidies, considerable competition from companies that were established while the market was still in its growth phase, price pressure, as well as the consolidation of the industry – the takeover of small installation companies by larger players – are just some of the challenges faced by RES players. 

Companies that see the current situation only as a threat are unlikely to survive the coming years. Those who see it as an opportunity to transform their own business can build a sustainable competitive advantage and significantly increase the scale of their operations.

A strategy to diversify their offering 

Installation companies that have so far had a narrowed product and service offering need to consider broadening it to include comprehensive solutions. It is worthwhile to include additional products and services, such as e.g. 

• Energy storage – which will complement the overall installation, particularly in the context of net-billing.
• Electric vehicle charging stations – which have great potential for growth in the near future
• Intelligent energy management systems – to increase the efficiency of RES energy use
• Comprehensive energy audits
• Design services
• Energy management services 
• Service and maintenance of RES installations – the development of a good system and offer will lead to long-term, sustainable revenues

Creating a comprehensive offer will turn one-off customers into long-term ones, and reselling products at the same time will increase profits without significantly increasing costs. 

In particular, I would recommend developing service and maintenance for installations. In the current market, where many companies have closed down, some customers are left without service support. However, developing a dedicated service and maintenance offer will allow you to generate recurring revenue from customers. It is worth considering a system that will remind you in advance of an upcoming deadline. It is also possible to create different service packages – so that the customer can enter into an ongoing relationship with us. 

Precise customer segmentation

Instead of targeting all potential customers, it is worth focusing on selected market segments. 

It is worth thinking about our target customer, creating a so-called customer avatar. Do not sell to everyone, but focus on a selected market segment or segments. 

We can divide the market in the RES industry into:

Individual customers:

• Owners of existing single-family homes who are planning to purchase an installation/thermal upgrade.
• Individuals building new homes, planning the installation already at the design stage
• Current prosumers who may be interested in e.g. installation expansion, purchase of energy storage, maintenance services

Business and institutional customers:

• Companies that are planning to introduce solutions to reduce energy costs
• Farms looking for specialised solutions 
• Public and municipal institutions interested in thermomodernisation projects 
• Housing associations that are planning to install facilities in common areas

Think about your target group – verify which group you work best with, e.g. which currently have grant opportunities, where you have contacts, or verify the sales skills of your team – which group you sell best to and focus on that.

By creating a profile of our client, we can develop dedicated offers and a communication strategy, which will strengthen sales.

New business models

The market today is dominated by traditional sales, but what if new business models were introduced to reduce one-off, high installation costs? Such solutions could be:

• Own financing of installations or leases – establishing partnerships with installation financing institutions 
• Energy subscription – installation paid off in a subscription model, with no upfront costs
• Long-term maintenance contracts – the customer can feel secure and the company has a steady source of income

The above models will be attractive to clients who do not want to invest large amounts at the outset. They will also allow for the building of an ongoing relationship with the client and guarantee the company a steady income. 

It is important here to prepare reliable contracts, preferably with a law firm, to secure all relevant issues (transparency of settlements, service system). It is also important that, in long-term models, the client feels that he or she has the ongoing support of an external company, but of course with boundaries set (provisions in the contract).

Geographical and organisational expansion

Companies with aspirations to become leaders in their industry may wish to consider the following:

• Regional expansion – opening company branches in areas where the market is not yet saturated
• Franchise model for installers (recommended for established companies)
• Cooperation with developers introducing RES solutions in new investments
• Cooperation with architects and designers planning RES solutions in their clients’ projects

Building an image as an industry expert

The RES industry is highly technological and positioning a company or its employees as experts will significantly increase trust from customers and can significantly increase sales.   

Content marketing 

Here are examples of content marketing for an effective strategy:

• Online knowledge centre – blog, calculators on the website
• Educational webinars for potential customers
• Examples from customer installations with profitability analysis on individual installations
• Newsletter – regular sending of content for your customer group and potential customers
• Expert publications in RES-related media
• E-books (e.g. ‘Complete company/home energy transition’)

Digital marketing 

In the area of digital marketing, it is worth taking the following actions:

• Local SEO optimised for specific queries
• Google Ads campaigns 
• Use of social media to promote the company and build an expert image (Facebook and Instagram for individual customers, LinkedIn for the B2B segment)
• Remarketing targeted at visitors to the company’s website
• Marketing automation – relevant to the purchase path, introduction of the Manychat tool.

Important at this stage is to review the material we publish, which publications have had a lot of interest, which have had a wide reach, which have suddenly had a lot of customers calling in – so as to replicate these patterns.

Building a community

In your industry, it is worth building a community and putting together special packages and reward systems for them. The following are worth considering: 

• A referral programme – for remuneration or in exchange for, for example, vouchers for service or maintenance services 
• Building a prosumer community – information exchange platform 
• Open days at customers with complex installations
• Company educational events for existing and potential customers

Building a community reduces the cost of acquiring new customers. With a community built, we can offer it additional services or products that enter the market. Open days at the premises of customers who have complex RES installations can be an attractive solution (offer them in return, e.g. free installation service). It could also be an interesting idea to organise a company event – open days – during which your employees share their knowledge on RES solutions, cost-effectiveness, available technologies with current and potential customers. In order to reduce costs, barter arrangements can be made with a caterer, photographer (to capture the entire event and promote it on social media). You can also invite our business partners, e.g. suppliers of inverters, energy storage, modules, heat pumps – these companies often have mobile equipment, which will make the whole event more attractive. It is worth asking your business partners to promote the event in their media. 

Optimise internal processes

Acquiring new customers is only half the battle. It is equally important to optimise internal processes to increase operational efficiency and customer service quality.

Digital transformation of business processes

Areas that can be digitised include:

• CRM systems and marketing automation – lead management, automated social media messaging using Manychat
• Mobile applications for customers – remote monitoring of installations
• Service management platforms – service scheduling system, maintenance, etc. 

Automation of company processes streamlines work and allows more customers to be served without a proportional increase in staff. 

Employee development

Companies are made up of people, and the quality of service is of paramount importance nowadays. Therefore, it is worth introducing the following solutions as part of caring for your employees:

• • Comprehensive staff training – technical and sales training 
  • Programmes supporting the development of soft skills, especially in customer service
  • Clearly defined career paths 
  • Bonus systems 

In the service industry, people are the competitive advantage. It is also worth introducing soft customer service training to installers. It is often the case that very good installers lack soft skills. It is worth paying attention to the installers’ keeping to deadlines, keeping in touch with the customer (what time the team will arrive, so that the owner, who, for example, has taken a holiday at work, does not have to wait half a day for the installer), cleaning up thoroughly after the installation, keeping in touch with the customer in case of early dispatch of items for installation. All of this affects the customer’s overall experience and increases the chance of them recommending us to the next person.

Supply chain optimisation

To increase predictability of supply and reduce lead times, consider:

• Working directly with manufacturers

• Setting up your own warehouse to secure the availability of components
• Standardisation of installation components to speed up the assembly process 
• Implementing an inventory management system 

•  

It is worthwhile to keep a parallel eye on the price situation of components on the market and trends in order to adjust stock policy in advance. 

Implementation plan and measuring effects

Successful business transformation requires a systematic approach, which can be divided into three phases:

Phase 1: Foundations (1-3 months)

• Audit of current processes and resources
• Implementation of CRM system
• Refreshing of marketing materials
• Development of dedicated offers for key segments

Phase 2: Expansion (4-9 months)

• Launch of new product lines
• Piloting innovative business models
• Intensification of content marketing activities
• Launch of digital marketing campaigns

Phase 3: Scaling-up (10-18 months)

• Opening of new branches
• Development of partner network
• Implementation of the franchise model
• Expansion into new market segments

Effects can be monitored through the following indicators:

• Increase in revenue and margin per customer
• Share of new products/services in total sales
• Customer satisfaction surveys
• Effectiveness of referral programme
• Operational efficiency

Summary

The market for renewable energy sources in Poland, despite numerous turbulences, still has great growth potential. 

Continuous diversification of the offer, introduction of new business models, digitisation of company processes will ensure that we win more long-term customers. Activities related to building our image as an expert brand will significantly increase our competitive advantage and, consequently, our sales. Therefore, it is worth considering whether to stand still and carry out activities like the majority of companies on the market, or to implement the necessary solutions that will position us as leaders on the RES market.

Throughout the process, it is also important to keep abreast of changes in the market, whether legal, grant-related or new technology, and to research potential new business areas in order to adapt quickly to new trends. It is also worth staying ahead of trends and considering upgrading current solutions or even introducing completely new ones.  

I am convinced that implementing the above strategy will allow your company to not only survive current market changes, but to use them as an opportunity for growth.