How to Profit in Solar in 2017

The following article was written by Keith Cronin, who teaches our Solar Executive MBA Training with co-instructor Chris Lord.

The solar industry saw great strides in 2016. It looks like 2017 is going to be a banner year. We saw changes globally. Some areas experienced contractions but the reasons we’ll discuss in a moment.

Some of the hottest trends to profit from in 2017 are numerous. The industry has matured. Knowledge, like ideas have spread to cities, states and even internationally. Some will argue that there is fatigue in markets where regulators have pushed back on NEM. While those problems have been acute for specific markets, it also represents opportunities to transform how we use, manage, create and profit from solar energy.

Let’s look at the most saturated market in the US- Hawaii. With NEM’s closure 15 months ago, it has thinned the herd of companies. The ones with low overhead costs are still around. They are now embarking upon a renaissance not seen since solar started to be en-vogue circa 1998. With no off ramp for consumers and companies due to regulatory challenges in sorting through a dynamic solar tsunami, consumers here have been forced to go solar + storage. Today, these costs are higher than what the industry likes and the public has enjoyed for years, this represents an even larger opportunity.

Slowly but most certainly consumers will begin the process of removing load from utilities. But this time, it’s going to be different. Consumers will have at their fingertips, the ability to manage their production of solar and how they store that production. Time of use will be the norm. Price signals to consumers will allow them to adjust their lifestyles and energy profiles, on demand.

This service represents the first opportunity for you. Being the service provider for their energy needs and energy management is probably one of the greatest opportunities even seen in your business. Being the trusted advisor behind the meter generally was never discussed in the NEM days, as most companies sold their value proposition on reducing the bill to the basic customer charge.

Those days are long gone in Hawaii and will surely wash upon the shores of other states and countries. Utilities struggle with zero to negative growth and are unclear of what the next step is in the own business models. One hundred years of doing the same thing requires thinking in a way that is innovative and agile. Historically, utilities operate like oil companies and are slow to change. Some say utilities are like extensions of small government and even slower to change.

So, how are you going to go to market and offering value added services behind the meter? Can you partner with a security company and offer a differentiated product? How about HVAC? Plumbing services? Energy efficiency? Electric car charging station? Battery maintenance service?

What is it that your prospective client needs education on, that they don’t have or know today? How can you help them with something that isn’t even in your wheelhouse? How can you be a resource for them, beyond Google?

International markets? Can you take your experience and know-how and export it to a developing countries energy strategy? Reinventing the wheel is never fun. Other companies don’t need to suffer like you did. What best practices can you share with other regions that would create a collaborative partnership?

Most solar companies focus on growth. It is a “millions and megawatt mindset.” We’ve seen the result of this with some of the publicly traded solar entities. Some no longer exist anymore. Some were selling their products and services below what it cost to provide the services. Just go read an 8K to find out the perceived cost per watt versus the true cost per watt. This has hurt the industry. It might have even hurt your business. Some call it racing to the bottom. How low can we go? After all, we are in the sustainability business. But we are still a business. Innovation should always be at the forefront of the industry. Driving down costs. Efficiency. More value to consumers. Levelizing our costs comparative to alternative sources of energy.

Ultimately, you want to take care of your family, your business and your community. Profit isn’t a dirty word. It is the source to allow you to continue your message in your marketplace. Being proud to make money shouldn’t make you feel guilty, because you’re in the solar business. The challenge today is if everyone is doing the same thing and not differentiating their service offerings, it’s hard to tell something that is of unique value versus something that is perceived as a commodity in your marketplace.

Do you want some new focus and strategies for 2017? Come spend 6 weeks with us to see how you can change your perspective of what is possible. Maybe it might be making your business smaller. Maybe it might be focusing of one specific aspect that you believe you are great at and finding a partner company that enjoys doing the other things. You won’t know until you get a fresh perspective and get away from being too close to your business. We are here to help see you succeed. Come join us in the Solar Executive MBA to chart a profitable course for 2017 and beyond.