How Will New Solar Companies Fare in the Next Five Years?

One of the studies we might like to see is the turnover rate for new solar installation companies. Exactly how well can new solar contractors expect to do in today’s solar marketplace?

When I first entered the solar market in 2008, there were two commercial solar projects in San Antonio and less than a dozen residential projects. After CPS Energy started their solar rebate program (then paying $3 per AC watt), the solar market began to grow. The cost of buying a solar PV system for the consumer at that time ranged from $6-$9 per DC watt, compared with pricing today in the $2.50-$3.50 per DC watt range. Over that same period, there has been a corresponding drop in the solar rebates available to around $0.70 per AC watt.

In 2012, my local utility company, CPS Energy, had 26 approved solar contractors registered with them. Today, there are 60 companies on the approved list, with very few I recognize from that original roster. Some, I’m sure, have done the same thing I have over the years by adapting as the market matured. In the case of my company, we have evolved, changing names and restructuring three times into its current business model. This is how we have been able to adapt to the ever-changing solar marketplace. However, most of those original 26 haven’t done as well. Of the companies approved by CPS in 2012, only four of the original ones (counting my company) are still active (except possibly for a few others that may have changed their names).

In those early years, consumers assumed the risks of getting marginally qualified solar installers to build their systems. We saw a lot of projects that couldn’t pass code and contractors who were not properly licensed. Then there were the more publicized cases of solar companies who took advances for projects then vanished. Certainly with so many contractors gone after only four short years, any owner with a warranty issue must look for help elsewhere.

All of the growing pains in the industry have led to a tightening of requirements for solar installation companies. And with all of the stricter rules, fewer companies can meet the minimum requirements to enter the market. Here in Texas, a solar company must be a state licensed electrical contractor employing a master electrician, plus all of the installers must be licensed electricians and physically supervised by a journeyman or master electrician. Other requirements to be on a utility company’s approved rebate contractor list include a NABCEP PV installation professional certification, a local presence with a physical meeting facility, a state electrical contractor’s license, and a local municipal electrical contractor’s registration (not to mention a sterling established track record).

So how will the outlook shape up for new installers as we again approach the possible end of the federal income tax incentive? I believe we will see the survival of the fittest, with fewer startup solar companies and a majority of those now in business either closed or absorbed by other companies by 2021.

For those of us who have grown and endured, the future looks very promising. But this is my personal opinion based on my local market experience. I would encourage other solar installation companies to share their insight. Will your company survive the next five years? How well are your competitors doing in today’s solar marketplace?

Image credit: James A. “Hoss” Boyd

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Mr. Boyd, born in Bentonville, Arkansas, has a Bachelor’s Degree in Animal Science from the University of Arkansas and a Master’s Degree in Operations Management, also from the University of Arkansas. Additionally, he has over 30 years of management and leadership experience. His electrical career began in high school as an apprentice electrician and continued throughout his college years to follow. James served 12 years of active duty in the Air Force from 1973 to 1985 in Logistics and as a Titan II ICBM Launch Officer. He held a “Top Secret” military clearance that involved a comprehensive background investigation into every aspect of his public and private activities. From 1985 to 1990, he was a Real Estate Broker Associate and Real Estate Securities Broker-Dealer in Albuquerque, New Mexico. During that time he worked for the leading Real Estate syndication firms in the state of New Mexico: Jack Clifford and Company and RJ Schaefer and Associates. Mr. Boyd worked directly on such projects as Class A office buildings, high-rise medical offices, business parks, commercial and industrial land syndications, and a “AAA” rated RV park. His career in real estate was curtailed by the real estate crash of the late '80s. He left the Clifford Company to work with the Schaefer Company in 1986. Mr. Boyd continued to work independently in the real estate business after leaving the Schaefer Company in 1987 and had also remained in the active Air Force Reserves after leaving active duty. In 1990, Mr. Boyd was employed by the Air Force in a nuclear weapons activity and worked in a number of high-level government positions including that of Air Force Civilian Career Program Manager at Randolph Air Force Base, Texas. In 1998 he graduated from the Dale Carnegie Course receiving the Dale Carnegie Highest Award for Achievement. From 1999 to 2003, Mr. Boyd served a three-year active-duty tour at Headquarters Air Education and Training Command at Randolph Air Force Base, Texas; where he worked a special project that involved direct participation in a RAND Corporation study. This active-duty tour coincided with the 911 terrorist attacks on New York City and the Pentagon. He retired in June 2003, as a Lieutenant Colonel from the Air Force Reserves with 30 years of combined active-duty and reserve experience. He is a Vietnam Era Veteran and directly participated in the winning of the Cold War by serving as a Titan II Missile Launch Officer. He founded Premier CIRE Systems in 2002 while completing his active-duty assignment with the Air Force Reserves. That company grew from a two man operation with annual sales of $28,000 to a million dollar plus commercial electrical contracting and solar installation company. The company employed up to 20 full-time members and had a portfolio of quality commercial projects such as National Tire and Battery, Kirkland's Home Stores, Icing by Claire, Freddy's Frozen Custard Restaurants, Allied Institute of Medicine, The Shops at Creekside in New Braunfels, Texas, and others. In addition it had a service customer base that included H-E-B Food Stores, US Maintenance Services, Pilot Truck Centers and the McKenna Foundation. Premier originally focused on commercial electrical construction, and commercial service and repair. In 2007 the company added solar energy development and installation to its list of services. Beginning in 2008 the company had completed small distributed generation projects and had competed for large array solar generation development contracts. On 31 October 2009, Premier CIRE-Systems permanently closed so that Hoss could focus all of his attention on commercial solar development and integration. On 23 November 2009, Hoss founded Tierra Verde Solar Inc. The new company picked up where the old one left off, by designing and building a number of small commercial solar projects. Tierra Verde (meaning “Green Earth”) completed its first solar project in December 2009. In 2013, Hoss formed TeraVolt Energy with a broader focus on solar project development and electricity brokerage. As a supporter of Green Energy and energy conservation, Hoss is a member of the San Antonio Clean Technology Forum and the Energy Reliability of Texas Emerging Technologies Working Group. In 2009 Hoss was accepted into the MENSA organization. He is an active member of Oakwood Baptist Church in New Braunfels Texas, where he has served in the church music program and on a team that accounts for and deposits weekly church contributions. He holds the rank of Third Degree Black Belt in Soryu Karate (the fourth level Black Belt in the Soryu style of Karate) as a martial arts instructor. In October 2010, Hoss was awarded the Certified PV Professional Installer national certification by the North American Board of Certified Energy Practitioners (NABCEP). He was at that time only one of less than ten Texas licensed Master Electricians to receive this national solar certification.

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