Why Solar Companies Have Failed and What You Can Do About It

You’ve been there. Looking out at your competition, you wonder why they charge so little. And the next company seems to do the same. You feel tempted. Dropping your price. You want the next job.

This was the theme from 2009-2016+. Work at any expense. Stay busy. Focus on the top line- sales revenue. The bottom line, not so much.

Like a plague this crushed the largest of solar operators. Want proof? Go look at their financial statements on sec.gov/edgar for validation.

The old adage became true. Do more sales, grow fast, get economies of scale, drive down costs. While this axiom could be true for manufacturing, like the semiconductor business. For solar, not so much. Why?

Solar businesses in general are contracting companies. Sure, some have sophisticated sales and marketing arms. Yes, some offer creative financing. But when you distill it down to its basic elements, this is what solar is and was and will always be.

Sure, publicly traded solar companies will tell you in their forward looking statements what their value proposition is and how it will revolutionize the solar industry. Unfortunately, we’ve seen little evidence to support this theory.

But we shouldn’t knock them for trying. They gave a lot of exposure to homeowners and businesses that normally won’t have been touched by the marketing budgets of these behemoths. And in a lot of ways, this movement gave birth to a lot of companies that saw this as an opportunity to solarize every home and business.

Now that we can see in 2017 that this romance has subsided and the focus on stability is even coming out of the existing publicly traded companies and many of the private ones, there’s hope for a better future.

And this leads me to tell you the future for you and your goals are bright. The race to the bottom has subsided. Stability will return. Storage looks very promising over the next 3 years. The software and hardware will talk to each other more fluidly and predicatively with the weaving of AI into the algorithm.

Let’s not forget how the future value proposition is going to be about being a service oriented company. Being the trusted advisor for not just solar, but storage and other support services.

Think about all the ways you can be of value to your existing clients. What do they need? What aren’t they getting attention with? When you go by their properties, what looks neglected?

These services will provide you with better gross margins, greater influence in your community and the stability you, the industry and your company deserves.