TLDR: By hiring a nearshore solar engineer with Elastic, companies can save up to 74% on their current solar engineering costs. For a solar engineer with a $65,000 annual base salary, companies usually end up paying $137,398 or 2.11x their base salary due to hiring costs, payroll, benefits, taxes, QA and management expenses. Now, for a monthly fee of $3,000, companies can hire a nearshore solar engineer with Elastic and significantly reduce their current engineering costs.
To know the benefits of outsourcing solar engineering, we must first understand what is costing us to keep in-house engineers. If you are a solar veteran, you likely know the breakdown of soft costs versus hardware costs of a solar company. Hardware costs (or hard costs) account for 35% of a system and include all the materials needed to build the system—modules, inverters, racking, and electrical wiring. On the other hand, soft costs account for 65% and include installation labor, engineering, customer acquisition, overhead, permitting, inspection, and interconnection.
Solar engineering falls in the soft costs category and covers the entire customer life cycle—from creating pre-proposals to prospect C&I customers, to designing systems for permit packages for residential customers, to analyzing energy bills for customer support.
By outsourcing solar engineering, there are major benefits beyond the 75% cost savings.
What are the real costs of in-house solar engineering?
Let's jump into understanding the costs associated with having an in-house engineer, in addition to salary. We have categorized these costs into three buckets: initial costs, ongoing direct costs, and management and quality assurance costs. When considering the total cost, you may want to know how much a team member costs per year, per hour, or per output (design, pre-proposal, ticket). Our methodology will help you determine these costs.
We considered the initial costs that are paid once per employee: the cost to hire them, the cost to train them, and the equipment used by the employee.
Let’s say you are hiring a solar engineer to help with Helioscope designs or preparing Plan Sets and this engineer has a market-based annual base salary of $65,000.
Total initial costs for hiring a solar engineer for help with Helioscope designs or Plan Sets are approximately $16,000. This includes 20% recruiting costs ($13,000), and $3,000 for work equipment such as a desk, chair, laptop, and additional equipment. This engineer will also require 10 days of formal training.
Ongoing direct costs
Ongoing direct costs are costs associated with the employee such as base salary, bonus, benefits, payroll tax, and office expenses.
Ongoing Indirect costs
The indirect costs associated with the engineer include management, supervision, and Quality Assurance (QA). For example, the engineer has a supervisor and a QA engineer, who dedicate 12.5% of their time to each engineer. This ensures the quality of work is maintained and errors in proposals are spotted.
All-in Annual Cost per Engineer
The all-in annual cost of an engineer is the real cost of an engineer on a yearly basis. Now let’s put together all the numbers.
All-in hourly rate per Engineer
Now that we've established the all-in annual cost of an engineer, let's calculate the hourly rate. Each year has 260 weekdays, 10 holidays, 15 vacation days, 5 sick days, and 10 formal training days, giving us a total of 220 real working days. That's 18.33 working days per month, or 146.6 working hours per month. To calculate the hourly rate, divide your monthly all-in costs by those 146.6 hours.
All-in cost per deliverable
Now let's say you want to know how much that pre-proposal, Helioscope design or Plan Sets are costing you.
The important factors to consider are, the minutes the task takes to complete, the productivity of the resource, the output per month and the monthly all-in cost per resource.
The costs of outsourcing solar engineering
With one simple fee, you can easily outsource solar engineering. The monthly fee of $3,000 includes a dedicated, full-time solar engineer, a fractional QA supervisor, and employee equipment. Plus, you don't have to worry about employee retention. Sign up today and you'll get a 2-week free trial.
What are the benefits of solar engineering BPO?
As we’ve covered completely in our previous article [ARTICLE], the benefits of solar engineering BPO are mainly cost reduction and more time and money availability for higher leverage investments or projects. This can be used to improve the working environment of your core team, margins of your business, and value to your customer. What could you do with the newly available resources? With the newly available time for your managers or team, and the newly available dollars, you could take your business to the next level.
Benefits for each Stakeholder
|Owners and executive team
||1. More cash for high-leverage investments|
2. Reduced CAC
3. Reduced COGs
4. Reduced payroll costs
5. Reduced Capex
|Managers and supervisors
||1. More time availability for high-leverage projects and activities|
2. Less time recruiting
3. Less time interviewing
4. Less time training
5. Less time managing people
6. Less time revising work
|End-customers||1. Lower price per watt|
2. Lower monthly payments