Solar & battery
Solar Sales Commission Calculator
Works sales commission, where paying on signed contracts creates the wrong incentive.
Result
Paying on revenue rewards volume and quietly rewards discounting; paying on gross profit rewards the jobs that actually earn. The choice changes behaviour more than the rate does.
Get a Free Business AuditHow the calculation works
Commission as a percentage of contract value or as a share of gross profit, with the structure mattering more than the rate. Paying on contract value rewards signing regardless of whether the job is buildable or profitable, which in solar is a specific and expensive problem.
What moves the number
- Whether commission is on contract value or gross profit.
- Whether it is paid at signing, at installation or at collection.
- Clawback provisions for cancelled jobs.
- Whether the salesperson influences the price.
Where this one goes wrong
Paying at signing on contract value funds jobs that never install and jobs that install at a loss, and both are common enough in solar to matter. Paying on gross profit at installation aligns the salesperson with the outcome, and a clawback for cancellations closes the remaining gap. Where the salesperson sets the price, profit-based commission is the only structure that does not reward discounting.
Before you quote
- Pay on gross profit where the salesperson influences price.
- Pay at installation or collection rather than at signing.
- Include a clawback for cancelled contracts.
Questions
About this calculator
When should solar commission be paid?
At installation or collection rather than at signing, because a meaningful share of signed solar contracts never install. Paying at signing funds jobs that never happen and the cost lands on the company rather than the salesperson.
Contract value or gross profit?
Gross profit where the salesperson influences the price, since commission on contract value rewards discounting and rewards signing jobs that install at a loss. In solar both are common enough to make the structure matter more than the rate.
Are clawbacks reasonable?
They are the standard answer to cancellation risk, and they work when the cancellation reasons are within the salesperson's influence, such as misrepresenting what the system will do. They are harsher where cancellation is caused by permitting or utility problems.
The formula
commission = (revenue or gross profit) x rate
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How to use this calculator
- Sales in the period ($). Enter your own figure; the page starts at $42,000.
- Cost of that work ($). Enter your own figure; the page starts at $24,000.
- Commission is paid on. Enter your own figure; the page starts at Gross profit.
- Commission rate (%). Enter your own figure; the page starts at 10%.
- Base pay for the period ($). Enter your own figure; the page starts at $2,600.
The result updates as you type, so you can try a figure, see what it does to commission earned, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Sales in the period | $42,000 |
| Cost of that work | $24,000 |
| Commission is paid on | Gross profit |
| Commission rate | 10% |
| Base pay for the period | $2,600 |
What comes out
| Result | Value |
|---|---|
| Commission earned main result | $1,800 |
| Total pay | $4,400 |
| Gross profit on the work | $18,000 |
| Left to the business | $13,600 |
| Pay as a share of sales | 10.5% |
Commission of $1,800 plus base pay makes $4,400, leaving $13,600 of the gross profit for the business.
How sensitive the answer is
Holding everything else steady and changing only sales in the period, this is what happens to commission earned. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Sales in the period ($) | Commission earned |
|---|---|
| $21,000 | -$300 |
| $31,500 | $750 |
| $42,000 example above | $1,800 |
| $63,000 | $3,900 |
| $84,000 | $6,000 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Sales in the period ($)
- A money amount, starting at $42,000.
- Cost of that work ($)
- A money amount, starting at $24,000.
- Commission is paid on
- Choose from Revenue, Gross profit.
- Commission rate (%)
- A percentage, between 0 and 60, starting at 10%.
- Base pay for the period ($)
- A money amount, starting at $2,600.
What the results tell you
| Result | What it is |
|---|---|
| Commission earned | The headline result. A money figure. |
| Total pay | A money figure. |
| Gross profit on the work | A money figure. |
| Left to the business | A money figure. |
| Pay as a share of sales | A percentage. |
A design still needs a site visit
Output and sizing figures use the assumptions you enter, not measured irradiance, shading or roof orientation at your address. Real production depends on all three, plus inverter behaviour and local interconnection rules.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.