Offering attractive consumer credit can make all the difference in converting prospective customers into signed deals, says Andy Wallace, managing partner of finance provider Consumer Credit Solutions (CCS).

Over 10 per cent of CCS’s business – circa £300 million approved loans this year – comes from the renewables sector and the numbers are increasing monthly. Customers in the solar market tell us offering soft sell, interest free or low interest credit finance has had a significant effect on their sales. There is a lot of interest in solar energy products but, like many home improvement markets, they’ve suffered from the economic downturn, and they’ve also had the added problem of numerous reductions to the Feed-in Tariff. So offering no-hassle finance has been a lifeline for companies selling Solar PV.

Record levels of consumer finance deals

In fact many of our customers are reporting record levels of credit volume. Consumers want to save money on their energy bills and they are looking to renewables to help.

But translating interest into sales can prove difficult when money is tight. If the cost is prohibitively high the sale is often lost, so offering point-of-sale credit to your customers can be a deal maker. If the installer can offer a soft sell finance package with low or even 0 per cent interest rates it’s possible to complete the sale without the need for compromise or delay.

A comprehensive selection of finance products means there is an option to suit most circumstances – Buy Now Pay Later for those with timing issues (the ISA matures in 6 months, or the car loan is paid off), or longer term unsecured loans such as the Bank Buster with a repayment term of 120 months often available, at better rates than traditional lenders offer.

Consumer finance is also easy to arrange. With support and training such as CCS provides, salespeople can be confident of arranging finance for their customers when they take the order. There’s no waiting for approval or appointments with lenders as it can all be arranged in the home.Retailers such as Solarlec, Mark Group, MyPlanet and Solar King are reporting increased sales as homeowners take up the various finance packages on offer. They can have PV installed on their home without dipping into cash reserves, or borrowing from uncooperative traditional lenders such as banks and building societies.

Many companies regard finance as another service to the customer. There has been a lingering idea that upmarket customers don’t want finance, but that isn’t the case now. Buyers of top end cars are used to being offered finance. One of CCS’s biggest customers realised this when buying his new Porsche; he’d resisted offering finance to his customers ‘in case they are insulted, they think I’m implying they can’t afford it’.

But he wasn’t at all offended when the car dealership proposed a finance package, and realised he could offer the same to his customers. No-one objects – even when they have cash available canny homeowners realise it’s better to finance a major purchase using low rate credit or Interest Free Credit and keep their savings for a rainy day. Some installers are wary of getting involved, remembering the days of very high interest rate finance products and high cancellations when the consumer re-considers.

There’s also the feeling that the administration might be complicated. But times have changed. The paperwork is designed to be simple and easy to administer, and decisions can be made on the spot, so customers know instantly that the installation can be completed.  

Published by Renewable Energy Installer November 2013