There’s an interesting split in the residential and light commercial clean energy space lately. As consumer demand is surging and some “old” solar pv players are moving to bigger projects (Nexamp no longer does residential and is installing 4.5 MW in Western, MA, Borrego sold their residential business, etc) there is room opening up for smaller, new companies.
I’ve personally noticed a major divide between the types of organizations expanding into the industry to meet the demand. There tends to be two major camps. First, the entrepreneur. The entrepreneur sees the huge industry growth and is starting a new company to take advantage the growth. The entrepreneur will tend to focus on a specific technology; solar pv, solar thermal, geothermal or energy efficiency. The second is the general contractor or construction professional who plans to expand his current business into a new technology. He does this for a few reasons. He has existing customers asking him about these new technology and he already knows 80% of what he needs to know to install these systems.
Each of these groups looks at the industry in a different way. Each has its pros and cons.
The Entrepreneur or “Pure Play”
I call it a pure play as the whole business is typically hinged solely on the sales of projects in a specific technology.
The pure play company tends to see “understanding business”. That is, the connection and optimization of marketing, sales, engineering, and installation activities as a skill in it’s own right, and they believe the reason they’ll success with the new company.
The General Contractor
The general contractor tends to already own an existing business focused on the building industry. This tends to be general contracting or a as a sub-contractor; roofer, plumber, electrician, etc. The general contractor tends to want to continue their existing business while taking their existing trade knowledge into a new field. The general contractor is already well versed in all of the aspects needed to complete a project; design, installation, project management and customer manager and this is why they feel they will be successful in a new industry.
What are the pros and cons of each?
I don’t personally feel either is better suited to take advantage of the opportunity in the huge growth of renewable energy, though I do think they will find themselves in different places in the market and supply chain, simply because of how each group values marketing, sales, and the installation side of the business.