More and more states are establishing Renewable Portfolio Standards (RPS), which require a certain percentage of utility’s power plant capacity or generation come from renewable sources. This in turn drives state incentive programs, designed to increase solar installations in both residential and commercial markets.
During the past five years, 450 solar-oriented companies have been created in California alone, employing approximately 4,000 people. The Solar Electric Industries Association predicts that the solar industry will provide billions of dollars of investment and an estimated 22,000 jobs with continued incentives. In Germany, a more mature solar market than the US, approximately 15,000 jobs have been created in the PV industry (German Ministry of Environment).
Costs of PV systems continue to come down, making solar more attractive for consumers. Many residential customers pay less for a PV system than for the energy they are offsetting. With a 30 percent Federal tax credit and an accelerated depreciation schedule, commercial customers look at solar as a smart investment that, in many cases, can provide high returns and short pay-back periods. In both the residential and commercial sectors, a PV system represents a hedge against future utility rate increases—the more utility rates rise, the more valuable the system becomes.
Solar – A Proven Technology One misconception is that solar is an emerging or
future technology. Solar is a proven and viable technology which has been employed for over 50 years. In the mid 1950’s, the first solar powered commercial building was built and the solar system still produces power today. Additionally, most crystalline solar panels, which account for the vast majority of all solar installations in the US, carry a 20 – 25 year warranty, something very few, other building components offer.
While this same technology continues to dominate the PV systems installed today, manufacturers are continually striving to increase efficiency and/or drive down costs of production. There are several technologies which attempt to optimize either efficiency or cost including: thin-film technology; hybrid solar cells merging crystalline and thin-film technology; and bifacial modules which capitalize on reflected light as well as direct light.
A key criterion in selecting which system components to install is to first ensure the manufacturer and/or distributor providing the products is a strong, reputable company that can stand behind the products and associated warranties.
Simple installation – Reduced O&M Costs
PV systems are modular and flexible, enabling an installer to configure a system to suit the specific needs of a particular site and budget. The system design is largely a factor of how much PV can fit on the customer’s roof or available land and how much electricity offset is desired. Once the system design is set, installation is relatively straight-forward and quick.
Some installers prefer to sell pre-packaged systems, configured by their vendor, which contain all parts necessary for a turn-key installation. Companies with large sales teams or who approach customers with similar requirements often opt for packaged systems in order to reduce their costs for developing specific solutions for each individual customer. Vendors understand this and some offer a variety of pre-engineered solutions.
PV systems are long-term investments. A system can eliminate or significantly 
reduce energy bills. Most PV systems are warranted for 20-25 years. However, the useful life may actually be much longer, because of the relative simplicity of the systems with few moving parts. O&M costs are nominal compared to more complex mechanical systems. This is a significant consideration, particularly for larger commercial installations.
Selling Solar
Solar offers great business opportunities for electrical contractors to expand their customer base and offer new, profitable solutions to their existing customers. The installation value of solar over traditional electrical services can be significant and drive higher net profit margins.
As the use of solar technology becomes more mainstream, the way in which it is sold has also evolved. Experienced installers have learned that a potential customer is often more interested in what solar represents as an energy solution rather than the technical specifics of how it operates. In communicating the benefits of a PV system to a prospective customer, uncover their fundamental reasons for choosing PV. Most often, it is cost savings, hedging future electricity costs, system reliability (particularly for more remote locations), or environmental responsibility. Knowing your customers’ key drivers enables you to design the right solution and effectively manage the sales cycle.
Train and Work with Proven Partners
While electricians have the necessary electrical background to work with solar, designing and installing solar systems requires additional knowledge. Obtaining formal training and/or certification is an important signal to prospective customers that you are capable and knowledgeable. Homeowners and businesses alike look for a trustworthy partner who they are comfortable working with and with whom they can have confidence. Many solar manufacturers and distributors offer training certification, as well as organizations like the North American Board of Certified Energy Practitioners (NABCEP) and a number of third-party training entities.
In seeking training, be sure to find trainers who are experienced in the geographical area(s) and market segments in which you intend to conduct business. In addition, establish relationships with premium manufacturers and distributors. A full-service distributor can give you access to technical services, marketing support, and ancillary services such as customer financing programs.
Know the Incentive Process and Finance Options
State incentives and rebates, along with Federal incentive tax credits can offset the cost of a PV system by as much as 50 percent. These incentives impact residential and commercial customers in different ways but are an integral element of a positive return.
Being able to convey the financial benefits of solar and how tax credits and incentives can be used, is a key factor in making the sale. Consumers expect their installer to help them navigate the incentive process, if not manage it altogether. It is important to fully understand the incentive application process of the utility or state program providing the incentive. Customers also expect a full service package, including design, installation, incentive processing/rebate paperwork, and O&M. The www.dsireusa.org web page can help you become familiar with all available incentives. A good distribution partner is also able to help and should have experience in the geographical market you serve.
Many residential systems are financed via a home equity loan or rolled into a home mortgage. Commercial customers almost always require flexible financing solutions for larger systems. Equipment leases, power purchase agreements, or solar services agreements, are all viable options that can be tailored to a customer’s financial goals or constraints. Financing is a critical component in the commercial market, and can make the difference between a closed sale and a lost one. Companies targeting the commercial market need to ensure they have partnered with a provider that can offer flexible financing solutions and lend support in closing a deal.
Benefits of solarAmericans want reliable, clean energy at a reasonable price. Three-fourths of electricity in the US is generated from burning fossil fuels. It is estimated that within 45 years that all of the world’s reserves will be consumed. As reserves decrease, prices increase—a simple case of supply and demand. Solar energy technologies have great benefits for homeowners, businesses, the environment, and the economy. Solar power systems diversify our energy supply, reduce our dependence on fossil fuels, improve air quality, offset greenhouse gas emissions, and stimulate our economy. Although solar electricity is not the sole answer to the myriad energy challenges, this renewable energy option can make an important contribution and is a viable option available today.
It is difficult to open a magazine or newspaper or turn on the TV and not see something that refers to “green” initiatives focusing on energy demand and carbon reduction. Major corporations and individuals are taking steps to improve their impact on the environment and are given incentives to do so.
As America seeks to reduce its reliance on fossil fuels and utility companies try to reduce the burden on the grid, businesses and individuals alike are being encouraged to install PV systems through tax credits and other financial incentives. Because these systems have a long, reliable life, customers not only realize financial benefits from their system, but also contribute to solving the environmental challenges we now face. By investing in a PV system, consumers can own a system that generates free electricity once the initial investment is recouped.
Homeowners also increase the value of their home. Residential solar power systems add value to a home more than any kitchen or bathroom remodel. It is estimated that a PV system increases property values at a ratio of 20:1. For every $1,000 reduction in annual operating cost from energy efficiency, house values increase by $20,000.
There is no longer a question of whether there will be enough demand for solar energy but how we can keep up with the demand. The need has never been greater for qualified installers. Electrical contractors are a natural fit to satisfy that need, while adding value and profitable services to their businesses.
Written by Phil Undercuffler, Technical Services Manager, Conergy and John Marcarelli, Business Development Manager, Conergy
