Syn : As photovoltaics heat up, installers need to differentiate themselves from local and national competitors. Thomas Dinkel, SunReports and Thomas Koerner, Astronergy Solar Inc. share tips for excelling in the new solar market, focusing on solar monitoring services.
by Thomas Dinkel, SunReports and Thomas Koerner, Astronergy Solar Inc.
August 8, 2011 – The photovoltaics (PV) installation marketplace has become more competitive as technologies gain mainstream acceptance. Independent installers can no longer afford to casually serve their territory in the same way they have for decades. In the new PV landscape, smaller installers need to stand out from local competitors while keeping up with large national installers, international solar engineering, procurement and construction (EPC) companies, and solar project developers. The installer business model is changing as well, partly because extended PV warranty obligations in some jurisdictions draw installers into customer relationships spanning ten years or more.
A simple way for installers to differentiate themselves from competition large and small is to add solar monitoring solutions to their product offerings. Solar monitoring allows installers to offer better customer service and convert long-term warranty obligations into lucrative income opportunities.
Large national PV companies such as SunPower, SolarCity, SunRun, and Sungevity have already embraced monitoring in their business models, including it as a part of their standard installation packages. These companies have set the standard for solar monitoring, elevating it from an afterthought to a threshold requirement. However, monitoring offers value far beyond defensive positioning and can foster a positive and profitable long-term customer relationship.
Technical and financial considerations
The few companies that already offer monitoring solutions often fail to reap the full sales and service benefits; they do not fully comprehend the thought process behind PV purchasing decisions. PV sales opportunities require prospective customers to approach the buying process on technical and financial levels. Potential customers may not even know the difference between kWp and a kWh, so a complex purchase decision that forces them to make choose a panel type, inverter, and system configuration can be very daunting. And thatís not even including additional system variables that affect system performance. As a result of these overwhelming and difficult choices, price usually becomes the final sales determinant; perhaps because itís the only concept the customer can actually grasp!
Monitoring can serve as a critical tool in reassuring customers who are unsure about purchasing a PV system. When making a purchase, customers want to be assured that their system will operate at performance levels that they were promised. Monitoring alleviates this concern and provides data that can lead to the purchase of additional services, such as annual tune-ups or performance-based panel cleanings. Google recently demonstrated that regular cleaning of PV panels can boost system performance by 30-50% in areas with high dust levels. Neither the homeowner nor the installer can know when to wash solar panels, or how much performance increase will result from a cleaning without a proper monitoring system in place.
Still another consideration is that advanced monitoring systems now allow installers to access manage their entire portfolio of installed systems via an easy-to-use web platform and compare actual system output to estimated performance. With this technology, installers can assure customers that they will not have to fend for themselves when it comes to their new solar systems. Installers will keep any eye on system performance remotely and provide maintenance or cleaning service on an as-needed basis.
Because many installers do not offer solar monitoring, the installer with performance metrics differentiates him or herself from the rest of the pack and removes a large part of the risk associated with the purchase decision. If the solar customer purchases an extended warranty, the installer will also enjoy additional gross margin dollars throughout the contractís duration. The recurring revenue model and the gross margins associated with service contracts have been well documented by many other industries, and it is time the solar industry began to take advantage of this model. For the PV industry to evolve accordingly, monitoring needs to be incorporated into installersí business plans.
Thomas Dinkel is the CEO of SunReports Inc., 1730 Kearny St., Suite L-1, San Francisco, CA 94133; ph: 1-888-272-9289; [email protected]
Thomas Koerner is general manager of Astronergy Solar North America (a company of the Chint Group), South San Francisco, CA, USA.