The Massachusetts Clean Energy Center has made data on the number of projects funded through the Commonwealth solar grant available to the public. You can find the information on MA CEC's website or download it here in excel format.
The data is very detailed and tells an interesting story that can be used for industry analysis, competitor analysis and market research for those companies still looking to enter the residential PV game. Companies looking to enter the residential solar PV industry should look at this data to determine the companies that are growing the fastest, where the companies are located, and competitive costs.
I spent some time going through the data trying to answer a few basic questions and here are some of the highlights:
A few notes about the quality of the data:
Lastly, I discuss what other questions could be answer from the data, and the story this tells for existing solar companies or companies looking to enter the Massachusetts market.
Let's get into the details:
1. How many installers were active in 2010, 2011, in 2012?
2012: 45 (only in the first 3 months)
2. What were the average installed costs in 2011, in 2012?
I use mean average and not median. A $0.60 reduction in the installed cost of residential projects is a reduction is 10 percent. Not bad, but this is actually below industry averages across the U.S. for the 2010/2011 period.
3. What was the cheapest installed cost in 2010, 2011 and 2012?
As an installer, I would not pay attention to these numbers. The goal is always to sell the most profitable projects, or bundle of projects, and it's likely anyone made any money at $1.44 per watt.
4. What percentage of systems were financed in 2010, 2011, in 2012?
2010: 140 financed systems / 744 total systems installed
2010: 18 percent of systems were finaced
2011: 733 financed system / 1732 total system installed
2011: 42 percent of systems were financed
2012: Only up to 03/23/2010 = 307 finance system / 413 total system installed
2012: 74 percent of system installed in the first quarter in Massachusetts were financed!
Note that the AMOUNT of systems financed in 2011 is almost equal to the total number of installations in 2011. The growth in financed projects is truly amazing and confirms that solar leases are becoming the industry standard and not an exception. If you want to learn more about residential solar leases, you can take this free course with BrightGrid Renewable Energy Finance about solar leases.
5. In 2012, what is the average installed costs of a financed system vs cash-purchased system?
It's interesting to see that financed systems are cheaper per watt in 2010 and 2012. One would expect to see this as driving down installed costs will increase the IRR of the annuity. However, a more accurate measure would be to calculate the LCOE of a cash vs financed system. A possible hypothesis is that the LCOE of a cash-based system is higher, perhaps to using more micro-inverters but I don't have the data to calculate this. The change in 2011 is also interesting to note. My assumption is that the 100 percent bonus depreciation for MACRS and the 1603 cash grant pushed financing companies, due to investor demand, to get more tax credits by slightly increasing installed cost. The consumer would hardly notice in their lease payments, because it's amortized over 20 years, but a small increase in installed costs over hundreds of systems adds up to a lot of added tax credit and depreciation write-offs. However, this is only a hypothesis, I would need to create a model to truly test if this would happen.
5. What is the value of residential projects in 2010? 2011? 2012?
2010: $17 million
2011: $58 million
2012: $12.4 million
6. What percentage of the market is dominated by large installers (those that do more than 25 systems per year) in 2010? In 2011? Who are the largest installers and who is growing the fastest?
2010: In 2010, there were only 10 companies that installed more than 25 systems. In total, the large installer completed 432 systems and have a 58 percent market share.
2011: In 2011, there were 19 companies that installed more than 25 residential systems in a year and they had a 77 percent market share.
What other questions could we answer from the data?
How is this data useful for new installers and for market research?
Chris Williams is a former geothermal, solar PV, and solar thermal designer and installer and is now the Chief Marketing Officer at HeatSpring Learning Institute. HeatSpring runs a Boston solar training for new solar contractors and a solar project management seminar for companies looking to expand into larger projects.
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