An emerging, yet familiar story is being played out in the growing residential solar power industry.
There is a very real David versus Goliath battle for residential solar power customers across the U.S. Much like in first part of the biblical story, the smaller and seemingly weaker fighter appears to have little to no chance of defeating his much larger foe. In this metaphor, David is represented by small solar contractors and Goliath is the large solar leasing companies.
As of this post, in early 2015, there is a new solar panel installation completed approximately every 3 minutes. A high majority of these installations are for residential properties and most are also done by the main solar leasing companies. These companies are few and large. Goliath had a huge presence and so do these companies. You’ll find advertisements for them everywhere as they have millions to spend both online and off.
Along with Goliath’s significant power comes with it the ability to control pricing. All he has to do is be slightly cheaper than what the conventional electric utilities charge and he can acquire many customers. Prices have to be kept high because Goliath’s size and power did not come cheap.
The industry and homeowners everywhere need a hero to save them from Goliath’s overpriced services and bad customer relations. That hero is starting to have an impact. Little Davids have been fighting the good fight against Goliath and many more are on the way. In this story, there are a few Goliaths and many hundreds of Davids.
So how can David win in the end? Well, he has quite a few advantages over Goliath. The main one is quickness. David can make changes much more quickly than Goliath. The primary and most important change has to do with pricing. David can quickly reduce his pricing to reflect the current price of solar panels. On the other hand, pricing changes could take years for Goliath, if at all. So the good word-of-mouth that David receives from his fair pricing can be seen as his primary weapon. David can also adopt new technologies more quickly than Goliath.
Another advantage for David concerns customer service. Smaller companies have much more control over a customer’s overall experience. A homeowner does not have to deal with layers of employees to eventually speak with someone who can actually help them when they deal with a smaller solar company. David is also much more reliant on good word-of-mouth from a job well done as he does not have a multi-million dollar advertising budget from which to get more customers from.
The Davids of the solar industry are actually a good representation of what it means to be a green company. Much of what it means to be green, sustainable, and environmentally friendly has to do with the word “local”. Acting as local as possible does much to help mitigate CO2 levels and helps to create a more vibrant local economy. The Davids of the solar industry are not trying to take over the world. That’s the foolish ambition of Goliath.
This story is far from over. Time will tell what eventually happens between the Davids and Goliaths of the solar power industry. However, if this story plays out anything like the original, it would be wise to bet on David in the end.