On December 13, 2023, the Federal Communications Commission (FCC) passed a new ruling that will change the lead industry as we know it. The ruling aims to close a Telephone Consumer Protection Act (TCPA) loophole that has historically made lead buying and selling easy at the expense of consumers.
According to data from SolarReviews, an estimated 42% of solar companies use third-party leads, so it’s important for solar professionals to understand the implications of the FCC ruling.
“American companies are going to have to change the way they generate business,” said Andy Sendy, president of SolarReviews, “but it can be complied with. We actually think it’s a much more ethical system.”
The ruling is set to go into effect around January 2025.
The FCC ruling at a glance
The FCC enforces regulations that companies need to follow when interacting with leads of any kind, with most of the rules enacted as part of the TCPA. The 1991 ruling restricted certain types of phone calls, texts and other forms of communications from companies to consumers, with the goal of protecting consumers from unsolicited contact.
Despite the TCPA rules, many lead generation companies have used a loophole that has left consumers with unwanted calls. Often, consumers unwittingly agree to receive calls or texts from a company and its marketing partners. The term “marketing partners” can be used loosely, allowing lead generators to sell consumer data to virtually any company.
The new rules approved by the FCC intend to close the loophole through the following requirements for lead generation companies in 2024:
- One-to-one consent: Companies must now obtain a consumer’s prior written consent separately for each marketing partner they would like to receive contact from. In other words, consumers must now pick from a list of any and all marketing partners from whom they would like to receive calls or texts. Leads can still be sold to multiple companies.
- Clear and conspicuous disclosure: As a part of the one-to-one consent rule, lead generation companies must clearly list marketing partners for consumers to see – not buried in fine print anywhere.
- Contact must be logically and topically related: The calls or texts that consumers do receive from companies they consented to must be logically and topically related to what they originally agreed.
How will the new FCC ruling impact solar companies?
The biggest concern for installers is that they will have access to fewer leads because consumers will have more authority over who they are contacted by. However, direct consumer consent will likely increase consumer trust and, in turn, increase both lead quality and the likelihood that the lead will convert to a sale.
Companies should also focus on internal lead handling processes. As fewer leads become available, it is crucial to properly nurture the ones that do come in to ensure the best results. Solar businesses should also verify that they do, in fact, have valid consent to contact purchased leads to avoid getting into hot water. Many existing lead generation companies, such as SolarReviews, already have proof of consent for every lead generated, making the transition smoother.
Investing in the company’s brand and reputation through online reviews and customer testimonials will also become increasingly important, both from an internal lead-generation perspective and for cementing your business as a company consumers consent to through third-party lead-gen sites.
This new FCC ruling has shaken up many of those in the solar marketing, sales and installation industries. Lead buying as a whole is not now illegal; there are just tighter restrictions on unethical practices in the lead industry.
“Over time, home services companies will evolve to it. There are such low success rates with spam outbound calling anyway that I don’t think [companies] are losing much by losing the ability to do that,” Sendy said.
For solar installers, it’s important to remember that while it might be harder to get leads, the leads they do get will be of higher quality and less saturated by the market. Solar companies may see a contraction in business initially as they adjust to the new regulations, but by partnering with reliable lead generation companies installers may see more success in the long run.