Smaller Solar Companies To Regain Industry Control

For years now, the five largest residential solar installation companies have enjoyed a majority share of the market. This trend is beginning to reverse. In the next few years, smaller solar companies will once again regain majority share of the residential solar market in the U.S.

Thanks again goes to GreenTech Media for figures and the related graph on this story.

While both commercial and utility scale solar are expected to take a downturn this year, the residential solar market will continue grow. This growth is primarily due to falling prices, state policies which are solar friendly, and increasing demand for solar in emerging areas of the country.

One of the key factors that led to the market dominance of the large solar companies was their ability to offer and simplify financing. PPAs and solar leases allowed these companies to not only offer financing but make going solar as easy as possible. Of course, as many homeowners have since found out, this turned out to be a very expensive way of going solar.

Now there are plenty of ways for a homeowner to get financing for a solar power system. The bottom line is that third-party financing in the form of a long term lease or PPA is much more expensive than acquiring a loan for a solar installation done by a local, smaller solar company. Word about this is spreading quickly, leading the larger companies to finally offer lower pricing and moving away from pushing leases. However, some large companies simply can’t make the numbers work and are vacating the residential space altogether.

To make matters even worse for the larger solar outfits, not only are they continually having to compete with more affordable and nimble installers, but their cost of acquiring new customers has only gone up.

The following graph is an illustration of how the smaller solar companies have grown more quickly than their larger competitors over the past couple of years.
growth in residential solar 2015-2016
As can be seen from the graph, the top three installers experienced a growth in residential sales of only 10 percent last year, compared with 35 percent in 2015. Obviously not a sustainable trend for these solar giants.

Ultimately we’re witnessing a change-up in the residential solar industry that will continue to benefit homeowners everywhere. Emerging markets will develop plenty of smaller companies that will compete on price and service, as has been the case for years in older solar markets. As in many other industries, consumers win through healthy competition among vendors. Solar is no exception to this rule.

Understandably, many homeowners are still concerned about their local state policies concerning net metering. This will not be a concern much longer. The democratization of energy will continue as home energy storage becomes affordable and commonplace in the coming years, ending the net metering “power” struggle. Homeowners will simply store their excess solar power for later use instead of being at the mercy of their local utility to buy it from them.

So here’s to strong, local solar economies! The future is looking bright!

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One Response to Smaller Solar Companies To Regain Industry Control

  1. disco thunder says:

    In conclusion, the rise of smaller solar companies in the industry signifies a shift in control from larger corporations. This trend is driven by factors such as technological advancements, government support, and increased consumer demand for sustainable energy solutions. Smaller solar companies are now able to compete with their larger counterparts, offering innovative products and services at competitive prices. This change not only promotes market competition but also encourages the growth of renewable energy sources, ultimately contributing to a more sustainable future.

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