Solar’s David Vs. Goliath Battle

Unlike many major industries in the U.S., such as the automotive industry that are dominated by a few major players, the U.S. solar market is notably different. While there are several major corporate players in the U.S. residential solar space such as SolarCity, Vivant Solar, SunRun and NRG with billions of dollars of investment backing, the residential solar market is shared with much smaller solar panel system installers that are still finding ways to thrive. Interestingly, while the top five national solar companies do control a large segment of the market, an estimated 42% of the U.S. residential solar market is occupied by independent installers. In order to better understand how local solar companies are able to coexist with national powerhouse solar companies like SolarCity, this article will examine some of the unique features of the solar market that allow for it to be a shared by local and national solar companies.

photos credit: GTM Research U.S. PV Leaderboard

Before delving into the ways in which local solar companies are able to compete with national solar companies, it is worth examining some of the fundamental differences and benefits of the two types of solar installers. Many local solar companies criticize national solar companies for their lack of quality, lack of attention to detail, and lack of homeowner support. While many of these criticisms aren’t entirely unfounded, it is also worth looking at the positive things national solar companies have done for the US solar market. For example, one of the positive benefits national companies bring to the market is that by increasing the size of the US solar market they have also driven down the cost of solar panels and other solar equipment through the benefits of economy of scale.

In addition to helping drive down the cost of solar by increasing the volume of solar installations in the US, national companies have also helped grow solar awareness in the US thanks to large marketing budgets and extensive marketing campaigns. As highlighted above, national solar companies have contributed in some ways to grow a developing the US residential solar market. However, it is also important to also look at the areas where national solar companies fall short and how local solar companies have been able to fill the market voids created by national companies.

As was previously mentioned, some major distinguishing factors between national solar installers and local solar installers include things such as attention to detail, a focus on quality and satisfaction. The above statement is not meant to be a knock of national solar companies, however it is important for homeowners to understand that when choosing which type of solar company to go with, due to the large volume of customers national companies have, and due to the very high volume of installations national companies complete in a given year, it is much more difficult for them to cater to the needs of individual homeowners.

One major factor that allows local solar companies to cater more specifically to the needs and demands of homeowners is that, unlike national solar companies who subcontract a large portion of their installations, most local solar companies have in-house installation crews enabling homeowners to have more direct contact with the company installing their system. In addition to giving the homeowner more direct access to the actual company installing their solar system, local companies also have to be more mindful of their reputation in order to succeed due to their high dependency on word of mouth recommendations. The fact that local solar companies heavily rely on their reputation in order to grow their customer base, they tend to be more focused on the quality of the installation and the satisfaction of the homeowner than national solar companies with huge marketing budgets.

Overall so far, the US solar market has demonstrated that there is room in the marketplace for both national and local solar companies to succeed, especially when less than 1% of all homes in the US currently have solar panels installed. All that being said, when deciding to go solar it is important for homeowners to understand the distinct differences between national and local solar companies in order to make an informed decision.

Sources:

1. //blog.heatspring.com/david-vs-goliath-how-can-small-companies-win-in-the-solar-industry/
2. https://solar-power-now.com/the-david-versus-goliath-of-the-solar-industry/
3. https://www.npr.org/2015/02/10/384958332/the-great-solar-panel-debate-to-lease-or-to-buy
4. https://www.greentechmedia.com/articles/read/The-Battle-for-Third-Place-in-the-US-Residential-Solar-Installer-Race