EnergySage launches Buyer’s Guide for solar shoppers to easily compare PV panels, inverters, batteries

EnergySage

EnergySage debuted a new Buyer’s Guide this week. The goal is to equip consumers and the industry with easily sort and filter info on solar equipment (panels, inverters, batteries) and compare them based on quality ratings, aesthetics, performance and pricing. EnergySage homes to establish the industry standard for how people assess the overall value of any solar panel, inverter, or energy storage system sold in the market.

“Most people reading a quote for a solar energy system are doing so for the first time, and aren’t familiar with the equipment they’re being offered,” said Vikram Aggarwal, CEO and founder of EnergySage. “Until now, there hasn’t been an easy way for them to check equipment quaility, if it’s priced appropriately, or how it stacks up against alternative offerings. Our Buyer’s Guide is designed to help shoppers better understand the equipment they’re being offered so they can make more informed purchase decisions. We hope it also helps solar installers and distributors better plan for future inventory stocking.”

The EnergySage Buyer’s Guide is the result of over one year’s worth of work, which included data and analysis from the National Renewable Energy Laboratory (NREL). This new product features an updated quality rating system for solar panels, and, for the first time, a rating system for inverters and energy storage systems. EnergySage leveraged NREL’s industry and technical expertise to develop all scoring criteria. All ratings are at the model-level and visible within the EnergySage Buyer’s Guide and the EnergySage Solar Marketplace.

“Five years after NREL assisted EnergySage in creating its inaugural panel classification system, we’ve once again collaborated to ensure this latest rating system appropriately reflects the performance of the solar equipment available in today’s market,” said Robert Margolis, senior energy analyst at NREL. “By adding solar inverters and battery storage, the updated classification system provides industry and consumers with a comprehensive resource for understanding today’s equipment choices.”

— Solar Builder magazine

Solar Marketplace Report shows the power of one ITC and the weakness of another

The semiannual Solar Marketplace Intel Report from EnergySage shows that solar system costs continue to fall, despite the Trump tariffs, which so far, have not even produced more domestic module procurement. Here are four takeaways from this latest report, which is based on millions of transaction-level data points generated within the EnergySage Solar Marketplace during 2018.

Tariffs have no impact on domestic panel purchasing (yet)

energysage market intel solar report

In January 2018, the Trump administration acted on the U.S. International Trade Commission’s finding of “serious injury” to U.S. solar panel manufacturers by levying tariffs on imported solar panels. The tariffs were intended to help American-made solar panels better compete with their foreign-made counterparts.

However, a full year after the tariffs were announced, the number of quotes offering domestically produced panels reached near-record lows on the Solar Marketplace. Ultimately, just 4% of EnergySage shoppers purchased a system with American-made solar panels in 2018 – an all-time low in the history of the EnergySage Marketplace.

But many of the top panel providers are opening / have opened U.S.-based manufacturing facilities, so this mix could actually shift pretty dramatically in a future report.

In the meantime, Panasonic remains the most quoted / selected solar panel brand with LG coming in second. Among the U.S. manufactured brands, Solaria is on top, followed by Mission Solar.

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Cost of solar falls to $3.05 per Watt, with several markets trending under $3 per watt

In H2 2018, the average quoted cost of solar on the EnergySage Marketplace dropped 2.2% to $3.05 per Watt. This is the largest price drop seen on the Marketplace in two years. At the same time, the average size of quoted solar energy systems increased by 7%, up to 9.6 kilowatts.

Digging into this number further, the news is even better for solar in larger markets like Arizona, California and Texas, which are seeing sub $3 per watt costs regularly. In fact 45 percent of the quotes in EnergySage’s network fell below $3 per watt.

Florida is one state showing intense price competition, with an average cost per watt of $2.72. On the other end of the spectrum, the Northeast is still seeing some of the higher solar system costs in the country.

ITC step-down could erase price decreases from previous year

The federal Investment Tax Credit (ITC) will decline to 26% at the end of 2019, which may effectively erase a year’s worth of solar cost decreases. The installed cost of solar could increase by over $1,000 for the average residential solar shopper come January of 2020.

Solar interest grew in all 50 states

Consumer interest in solar increased across the country, with interest doubling in 11 states between 2017 to 2018, according to an analysis of EnergySage website traffic. Virginia led the nation with the most year-over-year growth in solar interest, with Nevada a close second.

“Consumer interest in solar has proven incredibly resilient over the past year, despite tariffs and other attempts by the current administration to artificially decrease demand,” said EnergySage CEO and founder Vikram Aggarwal. “Solar prices are continuing to fall as installers improve their operations, supply chain management, and sales strategies. Additionally, we expect the growing popularity of brands like Enphase, LG, Panasonic, SolarEdge, and SunPower to lure more American consumers into the residential solar market in years to come.”

— Solar Builder magazine

Countdown to California 2020 part II: Constructing a new solar pathway

Constructing a New Solar Pathway

We wrapped our arms around California’s new Building Energy Efficiency standards in Installment I of the Countdown to 2020. In this installment, we take a closer look at how these 80,000 annual additions to the solar pipeline (based on historical averages) will more broadly impact the California solar market.

Regulations are seen as burdensome to business because they force changes in operations and profit margins. They restrict. Hoops to jump through. The inclusion of solar within the California Energy Commission’s 2019 Building Energy Efficiency Standards might feel this way to homebuilders. One more thing to do. One more cost that could hurt a sale. Maybe permitting and interconnection delays cause additional headaches.

On the other hand, this mandate instantly puts homebuilders in a position to install the lowest cost PV systems in the country and control a huge portion of the California residential solar market by 2030. Maybe an overstatement, but it’s a scenario that’s in play.

The new construct

To understand the opportunity, consider the findings of the “Cost-Reduction Roadmap for Residential Solar Photovoltaics, 2017-2030” technical report from the National Renewable Energy Laboratory (NREL) released in January 2018. The goal of this NREL report was to figure out how residential solar systems could hit the lofty target of 5 cents per kWh by 2030 set by the U.S. Department of Energy’s Solar Energy Technologies Office. The report highlighted these as the main areas of potential cost reduction:

  • Market maturation
  • Business model integration
  • Product innovation
  • Economies of scale

Within those categories are a range of possibilities, and in the report, NREL analysts modeled two bookend pathways: a “less aggressive” new construction model and a “visionary” model. The less aggressive pathway assumes PV installers will be installing traditional racked and mounted PV modules and will be loosely affiliated with homebuilders, installing solar on at least 25 percent of the homes in a typical subdivision. NREL sees this new construction pathway hitting $1.62 per Watt and 7.2 cents per kWh by 2030. The visionary pathway assumes a low-cost roofing/PV product that is integrated into all home designs, leading to $1.10 per Watt. That would be 59 percent lower than the 2017 Q1 benchmark and is the only pathway NREL can foresee hitting 5 cents per kWh.

Well, starting in 2020, California is already set to outpace the less aggressive pathway by requiring all new homes to include a solar componenent (versus 25 percent). Even if California’s new build sector still only achieves the less aggressive pathway pricing, it still dwarfs the 2017 Q1 benchmark of 15.1 cents per kWh.

The reason of course is — say it with me — soft costs, which are reduced by 65 percent in a new construction solar model (the cost of sales and marketing alone in the residential solar retrofit market is about 17 percent of a system’s costs according to Wood Mackenzie). Even the best case scenarios for module and inverter improvements and hardware cost reductions in NREL’s analysis don’t achieve more than a 9 percent cost reduction on the way to 2030. Here’s further explanation from the report, co-authored by researchers Kristen Ardani, Jeffrey J. Cook, Ran Fu and Robert Margolis:

“Sales and marketing costs are reduced in the new construction visionary pathway because installing PV on every new home in a development eliminates customer acquisition costs that are currently typical for a retrofitted PV system, such as sales calls, site visits, customer outreach and bid/pro-forma preparation … Installing PV on new homes provides additional savings via design and engineering standardization. Including standard PV system designs and sizes for each home floor plan reduces upfront engineering and design costs that would be incurred when completing a retrofitted PV installation of any kind.”

The here and now

That NREL analysis was a map to hit 5 cents per kWh by 2030, but we aren’t even in 2020 yet. So, what can solar installers expect right off the bat?

“We would expect to see decreases in the financing and permitting costs due to the many similar systems being installed in one area, potentially with bulk financing agreements covering all systems,” says Benjamin Davis, policy associate with the California Solar and Storage Association (CALSSA). “New homes designed with solar in mind should also help decrease the time of designing and installing the systems as the roofs and wiring of the home will allow for more streamlined approaches.”

“We will likely see more lower pricing in these new build market systems as customer acquisition costs will be lower,” says Allison Mond, senior solar analyst at Wood Mackenzie Power and Renewables. “This could also lead to lower system costs overall [including in the retrofit market] as residential solar becomes more prevalent.”

But will all of these great cost savings in the homebuilding segment help solar installers? Mond sees the new build mandate as “neutral” for long-tail installers when you weigh all of the factors, saying “while the new home build market is likely to be won by the national installers, it should lead to easier sales and increase demand overall, which will benefit the whole industry.”

“We don’t see this creating a need for more solar installation companies,” says Vikram Aggarwal, CEO of EnergySage, a network of pre-screened solar installers across the country (that plans to tailor its solution to meet the needs of California’s homebuilders). “Instead, existing installers will have the opportunity to partner with homebuilders and fill any openings in the calendar with new, subcontracted work. Savvy solar installers will establish long-term relationships with homebuilders in their area and become their go-to subcontractor for the solar component of the job.”

Like Mond, he sees large homebuilders relying on the scale and resources of larger solar companies while smaller homebuilders are more likely to partner with long-tail solar installers.

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The size divide

National installers already make up 30 percent of the residential installations in California while sporting much higher CAC (about 70 cents per W compared to 40 cents per W for long-tail solar installers). Not only will that CAC number drop because of new home business, but the larger homebuilders they are likely to work with present even more potential for cost reductions and efficiency gains within the new home solar channel.

Looking at the NREL analysis again, a portion of the homebuilder’s potential pricing advantage (versus a roofer) comes through the economies of scale realized when integrating PV into the permitting process for an entire subdivision (although the researchers admit this could be one assumption of the analysis that could fall short due to construction timelines, project sizes and workforce management). These potential economies of scale would most benefit the largest homebuilders, which will likely be working with the largest national solar installers.

“Those homebuilders that construct comparatively few homes [20 or fewer annually], are unlikely to experience the same process efficiencies as those that construct hundreds of homes,” the NREL report states. “In addition, potential permitting challenges and delays associated with deploying PV on new homes could result in additional costs that offset the savings benefits of economies of scale.”

Putting the retro in retrofit

As this new construction solar market develops and as these innovations in business models and technology emerge, will the traditional retrofit solar installers without key homebuilder partnerships be unable to compete?

“I think the new build mandate will have at least a modest impact on the retrofit market,” says Daniel Marino, chief commercial officer, BayWa r.e. Solar Systems. “First, there is a direct impact that if a retrofit is part of a ‘substantial’ remodel it may require solar starting in 2020. The definition of ‘substantial’ will determine how many homeowners are impacted by this aspect of the mandate.”

In the immediate, Davis definitely does not expect to see an impact on the number of retrofit projects. “Some businesses may choose to focus more on new homes than retrofit, but the demand for retrofit solar is so high and marketing is so competitive that those homes will continue to be served by other businesses. It is all part of the responsive and shifting nature of the solar business.”

“The mandate will have countervailing effects,” Aggarwal says. “On one hand, it takes new homebuyers out of the solar shopping market. On the other, it raises awareness and generates peer effects, which has been proven to increase consumer demand for solar.”

Plus, while homebuilders are driving CAC into oblivion, solar installers can coast behind them to gain their own soft cost reductions on the retrofit side. Mond tells us the California solar mandate is likely to increase demand in the retrofit market as further market penetration will make customer acquisition easier.

Marino agrees: “This could drive a peer pressure effect where everyone feels like they want to be a part of this movement. Even for homeowners who are less inclined to retrofit, they may feel pressure to do so if they are selling their house in markets where buyers are comparing new construction with solar against resales. On the whole, I think the mandate is an exciting new chapter in our industry’s evolution and I’m looking forward to seeing how it plays out.”

System quality

Economies of scale, competition and an increased number of installations have helped drive down the cost of solar over the past decade. The 2019 Building Energy Efficiency Standards will add about 800 MW of additional solar capacity from 2020 to 2023 — 200 MW per year on average. This is more than a 23 percent increase from the 858 MW of residential solar deployed on mostly existing homes in 2017. So, could a new build market drive component costs down further?

“Increased volume for existing distributors and manufacturers can certainly allow companies to spread overhead over a larger inventory, so there may be a marginal decrease in pricing but we expect that effect to be small,” Davis says.

Marino doesn’t think it is likely that prices will move as a direct result of the mandate, noting that the predicted increase in demand is a relatively small number relative to overall projections. There is also a sentiment that component prices don’t have much further to fall. However, a solar market that is driven more by homebuilders, roofers and, most importantly, the priorities of their customers, could shift the direction of the components used within these installations.

“We may see certain trends emerge, like a higher adoption of rail-less mounting solutions that may be viewed as faster to install and better suited for a new build,” Marino says. “Microinverters and optimizers currently make up the vast majority of residential installations in the U.S. Given their simplicity and monitoring tools. I expect they will continue to be very appealing for new homes. That said, I also expect the homebuilder market to be even more price sensitive than the retrofit market, and that could play well for string inverters to take back some share since they can provide lower costs per system and provide an easy way to standardize on array and system size.”

Then there is the question of quality. The type of homebuilder and the end-homebuyer involved will have an impact on the type of PV systems that are deployed and maybe the product innovations that are pursued. There are two prevailing paths being predicted in the new build market right now: One of homebuilders pursuing the most basic, low-cost systems to appease the mandate and keep their costs as low as possible, and another where homebuilders use this opportunity to rethink designs and build more robust, energy conscious smart homes.

“It depends on the home that’s being built and who the developer envisions as the target buyer,” Aggarwal notes. “If these homes are targeted at price-sensitive buyers, then yes, builders will look to leverage the cheapest way to fulfill the mandate. This likely means a simple-to-install solar kit with low-cost equipment will be used. However, for upper middle class and luxury homes, this is a new opportunity for builders to differentiate themselves by incorporating higher-end equipment for distributed generation, battery storage and home energy management.”

CALSSA, which played a big role in drafting these requirements, does not expect this policy to have an impact on system quality, although the reason why still seems to prove the same point, that new builds might lean toward the most price-conscious options available.

“The rule was written to have flexibility in the approaches to comply with the solar requirement because it was clear that the homebuilders needed to be responsive to the homebuyers in what they want for their home,” Davis says. “This will be true for the solar on their roof as well. Just as with appliances inside the home, some homebuyers want high-end appliances and some have lower expectations. Most of the new solar homes market will be very straightforward, with the cost of solar wrapped into the mortgage or solar leases accompanying the home purchase.”

While there is a lot of innovation and integration that needs to be figured out among the homebuilder and solar communities, the California solar mandate all but guarantees that it will happen because the market now demands it.

“Solar companies are innovators by nature, and it will be fascinating to watch new models of financing and ownership,” Davis says.

Some of this still feels like 2019 thinking. Today’s components might not reduce much more in price, but will we still be installing today’s components in a few years? That NREL visionary pathway does assume aggressive reductions in hardware and soft costs driven by new technologies, services and business models.

Putting our 2020-colored glasses back on to see the world in which solar is the norm for new homes, a future emerges that is more focused on solar roofs and other BIPV innovations. We will look at this possibility in our next installment.

The Countdown to 2020 series is sponsored by QuickBolt.

roof top reportDownload the new Residential Rooftop Report to heat up your solar sales

The Residential Rooftop Report for the first quarter of 2019 is now available for download. The theme is “Heating Up Sales,” and we’ve teamed up with report sponsor Aurora Solar to examine ways for residential solar installation companies to lower customer acquisition costs, close more leads and overall run a more streamlined, efficient local solar business. Just fill out the form below to access your free report.



















— Solar Builder magazine

Five takeaways from the Solar Installer Survey from EnergySage, NABCEP

solar installer survey

Results of the fourth annual Solar Installer Survey from EnergySage and NABCEP are now available. Here are the five takeaways that most stood out to us from the responses of 870 residential and commercial installers across the country.

● Consumers demand Tesla as storage installations rise: According to installers, more than one in three solar shoppers are also interested in a home battery, resulting in more solar-plus-storage installations in 2018. However, responses also illustrate a gap between consumer brand preference and what installers stock. While over 55% of installers reported that their customers specifically request Tesla battery solutions, only 12% of solar installers surveyed actually carry and quote the Tesla Powerwall.

● Installer confidence in the industry continues to rise: Nationwide, more than half of the installers surveyed indicated that they’ve grown more confident in the solar industry in the last twelve months. At the state level, installer confidence rebounded in New York and California as governors in those states pushed for 100% renewable futures.

Don’t miss our Solar Installer Issue in March — subscribe to Solar Builder magazine (print or digital) for FREE today

● Installers choose growth over margins: For the fourth straight year, a growing majority of installers (67%) stated that gaining market share is more important to their business than increasing the gross margins of each installation. When combined with the falling price of equipment, this finding signals the solar industry is likely on a path of increased competition.

● For the third year in a row, the top challenge reported in closing sales was confusion and lower consumer confidence created by competitors. Nearly half of all installers surveyed identified this as a major obstacle. Interestingly, customer hesitation created by utility and regulatory uncertainty leap-frogged the high cost of installation to become the second most common challenge in closing sales in 2018.

● In 2017, around ten percent of installers indicated that they planned to add energy storage and electric vehicle (EV) charging to their offerings in 2018. In fact, in 2018 the percentage of installers offering energy storage increased by 6% while the percentage offering EV charging products increased 8%, nearly achieving installer plans from 2017. This year, an additional 8% and 9% of installers say they will add EV charging and energy storage, respectively, to their new product offerings in 2019.

EnergySage fielded this survey between December 17th, 2018 and January 18th, 2019. Read the full report right here.

 


roof top reportDownload the new Residential Rooftop Report to heat up your solar sales

The Residential Rooftop Report for the first quarter of 2019 is now available for download. The theme is “Heating Up Sales,” and we’ve teamed up with report sponsor Aurora Solar to examine ways for residential solar installation companies to lower customer acquisition costs, close more leads and overall run a more streamlined, efficient local solar business. Just fill out the form below to access your free report.



















— Solar Builder magazine

Residential solar costs went up nearly $1,000 on average thanks to the Trump tariff

residential solar costs

Immediately following the U.S. International Trade Commission’s finding of injury to American solar panel manufacturers in late September 2017, EnergySage saw the cost of residential solar spike on its marketplace. Though prices have since restarted their decline, they are decreasing at a slower rate than before. The result is that the cost of a solar installation is now 5.6% higher than it would have been if costs had been allowed to fall at their preexisting rate of decline.

These stats come courtesy of EnergySage’s Solar Marketplace Intel Report, which looks at an abundance of transaction-level data points from its Solar Marketplace to identify trends.

For the average customer, this amounts to paying an additional $0.16 cents per watt more than they should have, or $960 for a standard 6-kilowatt solar panel system. When this price increase is applied across all residential solar purchases made nationwide after September 2017, the tariff effectively created a $236.5 million tax imposed on American consumers.

sb-econference-web-post

“These tariffs are yet another burden imposed on an industry that has long struggled with costs,” said Hugh Bromley, an analyst at Bloomberg NEF, an industry research firm leveraging EnergySage Marketplace data. “The residential solar industry is fragmenting. EnergySage data allows us to monitor competition among the so-called ‘long tail’ of local and regional players who don’t publicly release their earnings in quarterly reports.”

Other key insights from the latest Solar Marketplace Intel Report include:

Solar costs fell nationally, but rose in many top solar states

Although the cost of solar fell nationally to $3.12 per watt, the quoted cost of solar increased within several top solar states such as Arizona, Florida, and North Carolina. However, cost increases only occurred in states where the cost of solar was already below the national average.

Panasonic and LG are now the two most popular solar panels

The two well-known consumer electronics brands made up 46% of all quotes submitted to shoppers on EnergySage in H1 2018. The Japanese and South Korean manufacturers overcame obstacles created by the solar tariff, and secured greater market share due to their high-quality equipment ratings and recognizable brand names.

Solar shoppers remain very interested in energy storage

Continuing the trend first seen in the previous Intel Report, seven out of ten EnergySage solar shoppers also expressed interest in installing a home battery system alongside their solar installation.

“Any trade restrictions imposed on the solar industry hurts American consumers and American workers,” said EnergySage CEO and founder Vikram Aggarwal. “Yet despite these recent hurdles, the residential solar industry remains poised for tremendous growth over the next few years. All-time highs in consumer interest for solar-plus-storage, combined with falling prices and greater transparency, have mitigated the impact of these tariffs. As we show in this report, we have seen consistent increases in solar shopping levels on our Marketplace across the country.

— Solar Builder magazine