The dust is beginning to settle on the young
solar energy industry, and local economies are responding to the exponential growth of the flourishing solar market in very different ways. As local utilities develop new rate structures, and different parts of the country mandate more region-specific regulations and incentive programs, the generalized “one size fits all” approach that was once the path to success for large national brands is quickly becoming an impediment.
The complex financing models which many of the national installers have built their businesses upon are quickly becoming unprofitable as US utilities roll out more region-specific, variable rate plans that are less lucrative against a strict lease model. In addition, most national installers rely heavily on federal tax incentives. Between the lowered cost of a solar panels and a growing selection of versatile financing options that allow customers to keep their tax credits and retain system ownership, larger national brands are finding it more and more difficult to compete.
Local installers have fostered nimble business models that are better able to adapt to regional utility rate changes. Furthermore, local solar companies such as Sun Valley Solar Solutions are coming together to develop solar energy cooperatives such as Amicus, which allows them to compete with the buying power of these larger national brands while maintaining regionally specific efforts and expertise.
We are already seeing some large national companies respond to the changing local markets, many of which are making the informed decision to pull back their home solar installation crews, and instead contracting local experts for the installation process. This has major benefits for system reliability as well, since local expertise is generally more experienced with the best installation techniques for extreme climate conditions such as the arid Arizona desert.
It’s becoming more and more evident that a transition from large national chains to specialized local companies is beginning to emerge. Although, it is important to note that this change is not a sign of weakness, or failure of the solar industry as a whole, but simply an important evolutionary step for a relativley young industry that’s adapting to more diverse, and localized rate structures.
Whatever the motivation, the net results is shaping up to be a more resilient, diverse and customer-centric industry, which helps strengthen the local economy.
Benefits at a Glance:
- A local solar expert is more aware and better able to adapt to local utility and region-specific regulations and incentives
- Many national brands are locked into a single financing model – specifically leases. Local providers are generally more free to offer a variety of financing options where customers benefit from more immediate system ownership, as well as solar tax incentives
- Statistics show that a greater percentage of dollars spent at a local company stay in your community, and strengthen the local economy