The meteoric rise in solar deployment over the past 10 years didn’t necessarily lead to successful solar companies, says Keith Cronin, founder of SunHedge, based in Kailua, Hawaii and instructor for Heatspring’s Solar Business MasterClass.
As the solar industry grew, many companies weren’t making money. The problem: They were too focused on growth.
“Companies, many with five or ten employees, believed in the vision of solar but had to meet prices that were unsustainable and had difficulties,” he says.
Hawaii is a good example of the rise and fall of many solar companies, Cronin says. The state experienced huge increases in solar companies; in Hawaii, 200 did business during the peak. Now there are significantly fewer companies in the field.
Cronin suggests that solar companies follow his lead and avoid falling into the trap of trying to sell too many solar panels. Instead, you should concentrate on providing additional energy-related services to customers.
“When we started our company in 1999, solar wasn’t very popular so we decided to offer other services, like an energy service company. We were all about ‘service today.’ We tried to create this community outreach to support the community and make more money,” he says.
Solar companies today that are struggling should focus on providing additional services and products that allow them to yield higher gross margins while meeting their customers’ needs. Solar system maintenance, energy efficiency and energy storage are a few services and products you could consider.
In Hawaii, for example, the companies that survived now offer ancillary services. “They offer energy efficiency and other ways to serve their community. There’s a huge need for energy efficiency,” Cronin says.
What’s more, solar businesses should support the life cycle of the products they sell. You could offer warrantees and maintenance services, he suggests. “There’s more business in service and repair than installation,” Cronin says.
Other possibilities include offering financing for LED lighting systems or pumps for HVAC units.
While businesses are developing ways to provide ancillary services, they should keep an eye on up-and-coming technologies, especially energy storage, and establish themselves as experts in these technologies.
Tesla has begun offering the Tesla Powerwall, a home battery system that stores 14 kWh of energy, but can be expanded. A number of companies have followed suit. LG Chem has partnered with Sunrun to offer the Resu battery, and Mercedes has partnered with Vivint to sell its home battery in California.
“I would say in the next 24 to 36 months, energy storage is going to get really exciting,” says Cronin.
As the energy storage market heats up, it’s a good idea to develop ways to support that industry, he says. Establish yourself as someone who understands energy storage. Find ways to educate people about the technology. You could also offer services such as energy storage maintenance contracts.
“Be a resource for your clients, whether they are commercial, residential or industrial. How do you be that educator? Being an energy services provider, you can be a strong advocate for your clients,” says Cronin.
The bottom line: Inform customers by introducing them to new technologies. Ensure your company comes to mind when customers are thinking of purchasing any energy-related products.
“How do you be that educator and how can you have a relationship with your customers into the future?” Cronin asks.
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