American Solar Direct Inc.: Rapidly Expanding in an Emerging Market

Brennan Mulcahy and Ravi Thuraisingham have successfully grown American Solar Direct Inc. (ASD), a full-service residential solar panel installation company with a tried-and-true method. ASD started humbly in Santa Monica, Calif., in 2009 with Mulcahy, Thuraisingham, five staff members and a great idea. The company quickly grew to more than 250 employees and sales consultants by 2011. Thuraisingham boasts the company’s business model is the best way to sell the complicated energy system.

“Solar is still a new field and a lot of homeowners aren’t fully aware of the possibilities it provides,” says Thuraisingham, co-owner of ASD. “We go into our potential customer’s homes and sit with them for 45 minutes up to two-and-a-half hours, essentially as long as they need for our experienced consultants to answer any questions, provide a personal solar analysis and explain how a residential solar system can save them money and help the environment.”

The company’s market-position strength is also due to its all-inclusive offerings to each consumer, which come through the ASD team managing each client’s every need. These details covered range from educating the consumer, designing the system, managing the financing, and installing and maintaining the system. This soup-to-nuts offering is unique in the industry.

Unique Finance Package

For the customers that decide to move forward, ASD maintains a full customer-centric support staff that helps customers with the paperwork for utilities and handles all of the project planning, installation and on-going maintenance. One of the largest reasons that homeowners do not convert to solar – in addition to lack of knowledge – is because of the project’s steep installation costs. ASD negates this prevalent concern by offering customers a unique finance package; ASD pays for both the installation and maintenance of the photovoltaic systems and customers repay ASD over a 20-year lease.

The typical lease runs 20 years on a $25,000 system, with the monthly payments being approximately $150 after rebates and tax credits. The monthly payments of the lease include periodic service visits as well as repair and replacement costs, which are covered by warranty.

Thuraisingham reveals that the investments that helped ASD initially launch came from a nontraditional source.

“We were funded by WGL Holdings,” he says. “WGL Holdings is the parent company of Washington Gas & Light, which is a utility that provides power to the Washington, D.C., metro area. In the past, most of the financing had come from banks, Google or anyone seeking to reduce tax liability with investments in alternative energy. Now utilities are starting to get into this business; they are interested in the long-term aspect of solar for their own customers.”

The company has been a ratified success due to its grass-roots sales tactics. In 2011, ASD’s first full year of operation and growth, the company signed up nearly 700 homeowners in the Los Angeles region and has since installed roughly 400 solar systems. “We’ve expanded so rapidly in Los Angeles, that we were ready to move into new markets before our business plan indicated,” says Thuraisingham. The company proudly expanded into Northern California and San Diego in January 2012.

Consumer and Financial Markets Continue to Improve

ASD launched in the middle of the economic slump, and Thuraisingham adds that an early challenge was the large number of homeowners suffering financially. “Our customers must qualify based on credit, and that was an issue for us initially,” he says. “In recent months, though, we’re seeing more money in the financial markets and consumer finances are improving as well. Both of those two trends and our ability to direct market will allow us to continue growing.”

Another early lesson successfully learned by ADS was the need to carefully coordinate logistics with its customers. “There’s a customer service aspect to this business,” says Thuraisingham. “Our teams stay in constant contact with the homeowners from contract signing to panel installation. We have a behind-the-scenes logistics team that ensures the panels are delivered in a timely manner, among other critical details.”

The company recently constructed a modern distribution center to facilitate the logistics required for the Los Angeles market, and is preparing similar facilities to serve the San Diego and Northern California markets. “The warehouse is where we bring the materials and put the installation material and teams together,” continues Thuraisingham. “It’s strategically placed so that our resources are delivered on time.”

Thuraisingham admits that the company does experience higher than normal turnover with its sales consultants, but the company’s management structure is set up to handle it and ASD is continuing to attract seasoned solar installers and other support personnel as regular employees. ASD’s team-build efforts and Thuraisingham’s commitment to creating an energetic and success-driven work environment has allowed the company to press on.

“In the early part of the solar growth, it is hard for some people to do commission-only sales,” Thuraisingham says. “We have a very involved process to recruit new consultants, provide in-depth training and then place them with experienced sales consultants in the field for a period of supervision. We are commission-only because it’s the most cost-effective way to offset the higher costs of solar panels. If you’re not competitive in the way you’re bringing in customers, you’re not going to be here for very long.”

The pricing for solar panels has dropped considerably over the past couple of years, which will only work in the favor of both the consumer and ASD. As prices continue to improve, Brennan Mulcahy's and Ravi Thuraisingham’s American Solar Direct Inc. will only continue to expand its presence in the marketplace.