Community solar wave sweeps through country — how solar installers benefit

community solar for installers

A recent article in Forbes Magazine suggested there are 320 GW of untapped solar potential in the United States. To tap the market, however, solar installers have to think outside traditional solar production models. One model gaining traction throughout the United States is community solar, a way to share the benefits of solar energy with neighbors beyond the traditional solar-array-on-single-family-rooftop model of selling solar electricity. In this article, we’ll examine what community solar is, why it’s becoming popular, where community solar is taking root and why solar installers should consider adding it to their installation repertoires.

Why is community solar becoming so popular?

There are multiple reasons community solar is becoming increasingly popular. For one, it allows solar installers to broaden their pool of potential customers. After all, you can sell solar one rooftop at a time, but even the best installer will eventually run out of usable rooftops to sell. With community solar, installers no longer have to sell to each individual homeowner but can sell to a community instead. It’s a much easier sell because many people don’t want solar on their roofs for aesthetic reasons, or concerns about voiding roof warranties.

Community solar takes all those concerns away and, once one person in the community agrees to purchase solar electricity from the community array, others are more easily persuaded to follow their lead.

Lastly, it eliminates what is usually the biggest objection to solar installations: the cost. Since no one person is being asked to foot the bill for the entire array—instead sharing costs among dozens if not hundreds of subscribers—it’s easier for people to wrap their minds around the idea of solar energy in that context instead of putting it on their individual roofs.

Once the community solar garden is installed, all the participants in the program get to save money while gaining all the benefits from producing their electricity from clean energy. Who’s going to argue with that?

Where is community solar taking root?

Beloit University students help install community solar array in Colorado_GRID2017_2

Beloit University students help install community solar array in Colorado.

Shared solar is also the perfect solution to highly urbanized areas where land is at a premium, but densely packed buildings provide the perfect staging ground for utility-scale arrays.

It’s also taking root in rural areas where land is plentiful, and it’s expensive to string utility wires. In fact, farming communities are perfect places for distributed electricity of any kind—so why not have it be solar?

Surprisingly (or not surprisingly, depending on how you look at it), community solar farms are sprouting in states not typically associated with the Solar Revolution. In fact, the most robust community solar power program is in Minnesota, one of the cloudiest, coldest and snowiest states in the country.

Why? Well, after opposing rooftop solar systems for decades, the state’s largest utility, Xcel Energy, embraced community solar farms and started installing their own, giving their customers the opportunity to purchase parts of solar panels from which to produce their electricity.

To find out what the laws governing community solar are in your state, click here.

In other words, community solar allows utilities to provide their residential customers savings on their electricity bills by offsetting their use with the energy produced by their portion of the community solar project. With innovations like virtual net metering and other billing options, people see their power bills go down, while utility revenues can continue steadily along.

Community solar proves once and for all that solar power and utility profits are not mutually exclusive—meaning the mindless battles that have often plagued that relationship don’t have to continue in perpetuity.

How do solar installers benefit?

By now, the advantages to the consumer of community solar programs are obvious. But why should solar installers, who’ve made their money for decades selling solar one roof at a time, embrace community solar?

We’re glad you asked. Here’s why:

● 320 GW: To sell 320 GW of solar roof by roof could take the next hundred or so years, and despite our human-nature belief that we will all live forever, we know that’s not true. So why not use community solar to tap into this enormous, untapped market while you can still enjoy the revenues?

● Easier sales process: As we discussed above, it’s far easier to sell solar to a group of people than it is to individuals. Once one community member decides they want to purchase a subscription to a community solar array, the rest of the sales come much more quickly. And once you’ve sold 10 subscriptions or more, you’ve more than made your investment back on the sales meeting.

● Utility backing: Unlike individual rooftop solar sales, which utilities have been known to frown on because they see them as direct competition to their own business model, community solar arrays are something they generally can get behind. From Minnesota to Ohio to New Mexico and every state in between, community solar is being embraced by utilities as a way to keep customers while still satisfying their customers’ desires to get their kilowatt-hours from solar energy.

Having utility backing means much easier permitting processes, fewer interconnection headaches and easier collaboration when it comes to commissioning the new solar array. Think of how much easier your life would be with those advantages—and then think of how community solar could help you get there.

Ultimately, community solar is too good a deal for everyone for you not to embrace it. Customers love it because it allows them access to solar energy in situations where they might not otherwise be able to participate in the Solar Revolution. Utilities love it because it gives their customers another option while keeping them their customers.

And solar installers should love it because it opens new markets that would otherwise be closed to them if they were only selling one solar rooftop at a time.

Andrew Sendy is CEO of SolarReviews.

— Solar Builder magazine

Price Points: How much will tariffs increase the costs of residential solar?

residential solar tariff modules

Now that the #TrumpTariffs are in place, we know that utility-scale solar will take a hit. GTM Research is expecting an 11 percent decrease in U.S. solar PV installations over the next five years — 7.6 GW reduction from pre-tariff expectations, 65 percent of which is in utility-scale.

But optimism remains in the residential market. Let’s start with just how much the tariff will increase the price of a residential solar installation. Based on the cost breakdown by component provided via SolarReviews (Fig 1. below), a 30 percent tariff would add $0.21 per watt or 6.8 percent to the retail cost of a solar system. But as Andrew Sendy, chairman of Solar Investments Inc., points out, this isn’t quite true. His analysis via Solar Estimate:

“The 70 cents average wholesale cost of solar panels in the United States is a blend of the cost of premium panels which can be around 90 cents per watt at the wholesale level [i.e Sunpower, Panasonic and LG] and the widely used Tier One Chinese solar panels such as Canadian Solar, Trina, ReneSola and Jinko, which have been sold during 2017 in larger volumes at the wholesale level for around 50 cents per watt,” Sendy writes. “If we look at the effect the new tariffs have on the cost of Tier One Chinese modules, selling for $0.50 per watt in 2017, then all things being equal the 30 percent tariff would add 15 cents per watt to the wholesale cost of panels themselves. This would equate to around 4.9 percent of the retail price of a solar system based on SolarReviews research.”

figure 1

A 4.9 percent increase would increase the average residential cost of solar to $3.23 per watt and the cost of an average sized solar system of 6-kW by $900 to $19,380 before the solar tax credit or $13,566 after the tax credit.

Obviously this is some back-of-the-napkin calculating, but a useful exercise to show how minimal that bump in price could be for a residential system after factoring in:

  • The impact of more widely available financing mechanisms that provide more financial flexibility and payment terms (much more on this on page 24).
  • The further reduction of solar company margins and installation labor costs.

“With the solar tax credit in place nationally and net metering laws in place in around 30 states, many Americans simply do not know how good an investment installing solar panels on their home is,” Sendy continues. “As we come towards the end of the 30 percent solar tax credit in December 2019, I predict consumers will rush to get solar installed while this incentive and net metering are available. This will mean that solar companies will be able to spread the recovery of their fixed costs over more jobs. That means the fixed costs per job and per watt will fall.”

Conclusion (educated guess)

Overall, Sendy and Solar Estimate’s best guess is that the average falls in retail solar costs seen in recent years will be replaced by stable solar prices in 2018. His rationale:

  • The immediate impact of a 30 percent tariff will be reduced because of the large volumes of stock already shipped into the United States prior to the announcement of this tariff. In some cases, there is enough stock to meet almost six months of demand.
  • There undoubtedly will be rises in the wholesale price of modules, but these will be less than 30 percent as Chinese companies continue to lower costs.
  • What increases there are in cell prices and module prices at the wholesale level will be offset by increasing volumes for residential installers (ahead of the reduction in the solar tax credit at the end of 2019) that will lower the amount of fixed costs per job and per watt sold.
  • This lowering of fixed costs per job, solar company margins per job and installation costs through the greater use of internal electricians and roof laborers will at least compensate for the increase in wholesale module prices, meaning that despite the new tariffs, the retail cost of installed residential solar power systems will remain flat in 2018 at $3.08 per watt. This equates to $18,480 for an average-sized 6 kW system before the 30 percent solar tax credit, and $12,396 after the tax credit is claimed.

This will be the first year that solar panel installation costs haven’t fallen in the last decade, and it is a remarkable feat by the industry to be in a spot where it can adapt and possibly absorb such a big hit.

— Solar Builder magazine

What makes a highly rated residential solar installer? Here’s three common attributes

solar contractor success

SolarReviews.com has analyzed consumer data from more than 3,500 solar installations and has identified these three characteristics that they think define the most successful residential solar installers as expressed by the customers themselves.

The most successful residential solar installers, based on information provided to the site by consumers themselves, are:

  1. Either family or privately owned,
  2. Limited in geographic scope (are not national companies) and
  3. Aren’t larger than 100 employees.

In contrast, the three companies with the worst consumer-provided ratings—all of which are national installers—are:

  1. Publicly held,
  2. Large companies with national (and sometimes international) footprints.

“Our data reinforces that in general, consumers prefer companies with deep roots in their communities, owned by people they know and see around town,” said Andrew Sendy, CEO of SolarReviews.com. “Companies like these receive the highest rankings in customer satisfaction and are often praised for their laser-like focus on customer service—and that makes sense. Once companies reach a certain size, it’s harder to maintain a personalized customer-service experience.”

The data also reveals that the average review score for all 2,800 installers reviewed on the site in 2017 is 4.63 out of 5 stars, indicating solar electricity still maintains a high standing among solar consumers. SolarReviews.com features a Top Rated Solar Installers list where customers can directly check the reviews of their prospective contractors. The site is a comprehensive solar information service providing prospective and current solar customers a wide variety of resources including, industry news, actual solar customer reviews, cost calculators by state/region, access to payback calculators and a vast array of content and advice written specifically to help solar customers.

Four steps for converting more solar sales

— Solar Builder magazine

NABCEP credentials now included within SolarReviews.com platform

NABCEP new logo

The North American Board of Certified Energy Practitioners has partnered with SolarReviews.com, to integrate NABCEP certifications and credentials into the expansive SolarReviews.com website.

As of September 2017, SolarReviews.com has received more than 22,000 unsolicited reviews on solar installers across the U.S.

“With the addition of the NABCEP certifications, our visitors now have more information to aid in their solar decision process further boosting consumer confidence,” explained Jamie Lakes, Director of Business Development of SolarReviews.com. “Achieving NABCEP certification is a great achievement in the solar industry and we are proud to partner with them.”

NABCEP develops and implements credentialing programs for practitioners in the fields of renewable and sustainable energy and energy efficiency technologies and an accreditation program for residential photovoltaic installation companies. Through the SolarReviews.com platform, consumers can now identify NABCEP Certified individuals, NABCEP Accredited companies, and NABCEP Registered training providers.

Vote here for the 2017 Solar Builder Project of the Year

Customer reviews of services offered by contractors, like solar installers, are one of the most important ways potential consumers can learn about service providers. They provide customers with invaluable information on the services a contractor offers including their customer service, installation, maintenance performance, whether they performed services on time and as expected, and more.

“We are continually looking for ways to raise industry standards and promote consumer confidence,” explained Shawn O’Brien, Executive Director, NABCEP. “By working together, we can provide today’s consumers with valuable information about NABCEP Certified Professionals’ commitment to achieving and maintaining high industry standards which will assist consumers during the selection process. We’re confident that consumers who visit SolarReviews.com to make an informed decision when choosing a renewable energy installation company will see the benefit of selecting NABCEP Certified Professionals and Accredited Companies, and that the value of NABCEP’s certifications will be reflected in their reviews.”

In addition, SolarReviews.com will create a special section for solar training providers that will include company information, partnerships and accreditations. Find SolarReviews.com at booth #2863 at Solar Power International.

— Solar Builder magazine