Cost of Delay

Cost of Delay

When you’re making a good investment, you are recommended to hold back.  Similarly, you may hear from your prospects that waiting is a prudent move energy efficiency that is regarding.  That isn’t always the full situation.

A couple of years ago, a Wharton that is fellow alum a story with me.  He was selling utility-scale projects that are solar their price circulation almost halted due to a rumor dispersing through their portion: the price of silicon would definitely fall by 50percent within the second 5 years.  Customers had been informing him, “Why would we might like to do this task once I could hold back until it was cheaper?”

He considered it for a time then understood this debate performedn’t make any sense that is mathematical.  “Only 20% of the project was related to the cost of silicon,” he said.  You’d only be saving 10% after the five years“If you halve 20% of the project, that means.”  Not just that, he noted that the remainder task price could be topic to inflation that is compounded in addition to anything else.  More over, waiting would additionally cost 5 years well worth of solar power production and present the possibility of obtaining reduced rebates or income tax advantages.

The best way to fight this would be to place these figures down in some recoverable format and work out it obvious to their customers.  They were told by him, “It’s simple.  The cost of delay will sideline your progress, and on top of that you’ll be money that is losing.”  Once they understood this, it had been a sanity check that is major.  Why would you refrain from making these improvements over such a small amount of potential material that is raw cost savings? 

This idea is absolutely nothing brand new.  I prefer the philosophy that is same I deal with clients who want to wait.  Perhaps they that feel prices are on their way down, that technology is improving, or if it is dreadfully inefficient) that it’s wasteful to replace equipment that’s still running (even.  Whenever a prospect makes use of those objections, they could be neglecting the picture that is big.  If that’s the full situation, be sure to take it back in focus.

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