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Freitag, 28. April 2017

Big Solar is Struggling, and That’s Okay

Big Solar is Struggling, and That’s Okay

 
Several national residential solar brands have faced financial hurdles over the past year, but, with system offerings that often come at a price premium over smaller local installers, that may not be a bad thing for consumers.
Even as the residential solar sector continued its trend of strong annual growth, expanding at a slowed but still impressive 19 percent in 2016, two major national brands declared bankruptcy, creating waves of uncertainty throughout the big solar industry. About a year ago SunEdison, one of the largest renewable energy companies in the country, filed for bankruptcy. It has since been broken up and sold-off to the highest bidder. Just last month, Sungevity followed suit, declaring bankruptcy and shedding more than 300 employees. Energy giant NRG also scaled back its solar operations to concentrate on commercial and utility-scale solar, and struggling residential leader SolarCity was acquired by Tesla.
These are disturbing developments for big players in the residential solar market, but it may ultimately be good news for solar consumers. While fewer choices would appear to be bad news for households looking to go solar, the decline of national solar brands could largely be the result of competitive pricing from lesser-known, but more agile, local solar companies. Evidence is beginning to pile up that big solar may not be offering the best solar deal in town.

recent study released by the National Renewable Energy Laboratory (NREL) came to the conclusion that solar quotes from big installers average about 10 percent higher than those coming from smaller companies. This means that systems from larger solar companies could be costing consumers thousands of dollars more than if they would have gone with the local guy.
Similarly, the solar cost analysis website Cost to Install Solar (CIS) found that SolarCity, which tops their list of most residential solar installations over the past two years, charges customers an average of 12 percent more than competitors active in the same areas. Solar systems from Vivant, No. 2 in installations, come at a 3 percent premium. This isn’t true for all big solar installers. Bankrupt Sungevity, for instance, ranks No. 4 in installations with pricing that was 19 percent lower than competitors. However, that still puts Sungevity at No. 140 in price competitiveness out of about 1,000 companies analyzed.
In looking at competitive system pricing, much smaller companies tend to top the list — companies like South West Sun Solar, A1 Sun, Bright Life Solar, and Clean Energy Solutions. None of these companies are active in more than one area, and each has a fraction of the number of installations by large installers over the same period. In fact, none of the top 30 lowest priced companies are active across multiple regions.
So, how are these little guys out-competing some of the big names? According to NREL researchers, overhead costs could have a lot to do with it. Operating a solar business across different states can be expensive, raising the cost of business that must be recovered through system pricing. Customer acquisition costs may be another factor. It costs the average installer about 60 cents per watt to lock-in a new residential solar customer, but two of the top national brands, SolarCity and Sunrun, have acquisition costs around 90 cents per watt, which nearly accounts for the 10 percent premium that NREL found.
None of this means customers can’t still get a good competitive deal from a large installer. In fact, CIS found that Sunrun prices tend to be about 30 percent lower than competitors. What it does mean is that well-known brands don’t necessarily deliver the best prices, and consumers would be wise to shop around and compare quotes from multiple solar companies, both big and small, when considering a home solar system. There will likely always be a role for big national players in the residential solar market, but local solar installers, like local roofing and plumbing companies, may increasingly become the go-to source for many home solar installations as the residential sector continues to evolve.
Lead image credit: plien via Flickr
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