It’s ugly out there. The folding of SunEdison has been a disaster for the industry.

With the recent SolarCity announcement of Elon and the Rive Brothers using their cashed-in stock options to create a short term bond, what does this mean for an industry in spasm? Their term loan obligation, coming December 31st, of $250 million will also put a squeeze on position in the marketplace.

Getting back to basics.

While this is highly unpopular, it is acutely necessary. The industry has morphed into a toxic debt laden product lineup and its being repeated by all the usual publicly traded solar entities. This isn’t to suggest you shouldn’t take any retained earnings and plow them back into the business, because you should. Getting better and optimizing your company should be the goal.

But here’s the dirty secret nobody likes to talk about: we are racing to the bottom and doing it in volume that is unsustainable. Why? Because we all believe we need to keep pushing down prices to allow more people to afford solar. Great…but at what cost?

We should stop for a moment, pause and thank the fintech industry as well as large institutional money for helping to spawn innovation. However, we lost our way. We did not see 10x multiple gains in panel efficiency, inverter efficiency, installation techniques, etc. What we did see was panel manufacturers go bust, along with inverter manufacturers and now developers.

The promise to Wall Street was we will see the compound annual growth rate (CAGR) in costs go down so low that we eventually won’t need subsidies. The big problem was, it never materialized. And the other elephant in the room is perhaps even more pronounced: how many small businesses have been hurt by these large companies racing to the bottom? The list is long. It is hard to compete with these entities that have lost money on every job for years.


Effectively, stock holders in these companies have artificially created a floor for installation costs. In other industries, this would be called anti-trust activities and dumping and subject an inquiry by the DOJ. Kind of like the panel manufacturer issues in recent memory coming from China.

And yet, we tolerate it. Maybe because we all hold on to hope that some day it will be like nuclear power and so cheap we won’t have to meter it.

But, let’s look back to 2010 – 2014 for a moment, when panel prices dropped abruptly every 4-6 months. This was the fuel the industry received to prop up the profits or revenues. If you gave a client a proposal in June and installed it in November, you made the spread between what you quoted the client and what you effectively paid for the modules. Most did not tell their clients of the benefit to them. Especially the PPA/lease providers, as they aren’t selling products, but the energy that is created from the products.

This created a false sense of reality. We thought, like housing prices, that they’d appreciate forever, but in reverse. We believed as an industry, that panel prices would continue to fall. And this would keep the game going.

So, what has changed?

Panel prices stabilized, and businesses got destabilized. Plain and simple. Even the ITC extension does not appear to have helped in ways we expected.

So, how you can look at the industry today and leverage the shift in business dynamics? You need a few basic things: a plan, a system, a perspective. The good news is that 200+ people just like you have received these basics and are thriving. We want you to thrive and grow. So, sign up for the Solar Executive MBA Training today.


Enroll in our Solar Executive MBA Training— a course designed for leaders who are responsible for the financial details that drive large-scale solar projects. The course provides participants with the financial modeling tools and business perspective often lacking in deal negotiations. It will help you quickly and easily identify quality projects to develop, own, and/or operate.