Large Solar Installers Fail To Achieve Profits

$17 billion.

That was the total revenue of the American solar industry in 2018. It might shock some to discover that many of the largest solar installers in the country failed to show a profit in spite of such a large number. It’s also worth noting that this story pertains to a growing industry.

A growing yet unprofitable industry?

Well, that’s exactly the case. Some of the largest solar companies have struggled to make the numbers work favorably after years of work and thousands of completed installs.

How can this be? Well, part of this story is not particular to the solar industry. Many companies in other industries fail to show a profit for many of their first few years of business.

However, things have been especially difficult and turbulent in the residential solar industry. Case in point is the story of SolarCity. After years of being top of the heap in terms of market share, the company eventually got absorbed by Tesla after years of failing to turn a profit. As of mid 2019, Tesla has yet to aggressively seek solar sales. The SolarCity business model failed.

SunRun is the new leader of the residential solar market pack. Second quarter 2019 financials for the company show them losing $105 million.

Vivint Solar is another major player in the residential solar game suffering from the same problem.

One of the biggest problems for these companies is how much their sales and marketing costs are. Basically, it costs these companies too much money to get more customers. In fact it’s almost a dollar per watt for SunRun. That’s almost a third of the total cost of doing business. This is the definition of unsustainable. The company can actually get an install done for $2.50/watt. Administration, sales, and marketing add another dollar per watt.

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There’s certainly no easy answers for these large installers. They’re all hoping to stay afloat long enough for costs to fall in every category.

What’s the solution for homeowners? There’s an easy answer to this question. It’s simply to do business with a local installer.

Some credit, however, must be given to the major solar companies. They have done much to help spread the awareness of solar, albeit at the same time convincing many homeowners that solar power is still too expensive. (It can be assumed that many people approached by a large solar company didn’t follow up with more research online to discover the actual cost to get solar installed.)

The point of this particular post is not necessarily to disparage these larger solar companies. After all, more solar in general, is a good thing, of course. Also, more solar awareness in general is a good thing too. But when a big solar installer disappears, that doesn’t help the cause.

So while major solar companies will continue to attempt to grow at unsustainable speeds, smaller and more local solar outfits will be able to offer significantly lower prices and much better service overall.

2019 Will See Significant U.S. Solar Panel Manufacturing Growth

The manufacturing of solar panels in the U.S. will see considerable growth by the end of 2019. Many foreign solar companies are choosing to set up shop in America to avoid paying costly tariffs.

Photo credit – Solar Power World

This story comes by way of a recent solar power world article.

Here’s a list of the companies that are expanding their operations in the U.S.;

  • Hanwha Q Cells. This South Korean company will be constructing a 1.6 gigawatt solar panel manufacturing facility in Dalton, Georgia. Panel production is expected to begin just a few months into 2019.
  • First Solar. This American based company is currently under construction on a 1.2 gigawatt factory in Perrysburg, Ohio. It’s an impressive 1 million sqft factory that is expected to be completed by the end of 2019. This is nearby their existing 600 megawatt facility.
  • LG Solar USA. Another South Korean based company that is currently expanding into a 500 megawatt facility in Huntsville, Alabama. Hiring is underway and solar panels are expected to be produced by the end of the first quarter of 2019.
  • JinkoSolar. With operations already setup in Jacksonville, Florida, this Chinese company will be off to a quick start with a 400 megawatt facility that is operational as of early 2019.
  • Seraphim Solar USA. The company is expecting to finish their 340 megawatt factory in Jackson, Mississippi sometime in 2019. Based in China, the company produces about 4 gigawatt of solar panels per year with business in 40 countries.
  • CSUN. Another Chinese based solar manufacturer. The company has yet to confirm an exact timeline for completion of there 200 megawatt facility in Sacramento, California.
  • Mission Solar. This Texas based solar panel manufacturer is expected to add an additional 200 megawatt production capacity to their existing 200 megawatt plant in 2019. The factory is in San Antonio.
  • Silfab. Based in Canada. This company is working on adding 200 megawatts of capacity to their existing factory in Bellingham, Washington, bringing its total to 400-500 megawatts by the end of 2019.
  • SolarTech Universal. An American company based out of Riviera, Florida. The company expects to add an additional 200 megawatts to their 80 megawatt facility.
  • SunPower. The American solar panel manufacturer has acquired Solarworld’s Hillsboro, Oregon, plant. The company expects to reach a 200 megawatt production capacity in 2019.
  • Heliene. A Canadian outfit. This company is in the process of refurbishing a 140 megawatt facility in Mountain Iron, Minnesota.
  • GreenBrilliance. This company has much experience producing solar panels in India. The company is expanding with a 120 megawatt factory in Baltimore, Maryland.
  • SolSuntech. Headquartered in New York with R&D centered in South Korea, this new solar panel manufacturer is promising a 3D solar cell capable of being 33 percent efficient. They expect production to start at their 100 megawatt facility in Virginia by the end of 2019.

While the solar panel tariffs have made going solar more difficult in the U.S., it appears that both American and foreign solar panel manufacturers are continuing to invest in their solar businesses. The big picture is that the tariffs were a temporary setback and that all parties involved know that we are still in the beginning stages of what will prove to become a much larger industry.

More U.S. solar cell manufacturing will prove to be a win for both American and foreign companies alike.