Albuquerque-based Affordable Solar started in 1998 when President and CEO David Hughes sold solar panels out of a trailer parked in his backyard to people interested in going off-grid, or as he says, “back-to-the-landers.” Once the grid-tied market took off in the early 2000s, the wholesale distributor secured a strong foot-hold in the market. Affordable Solar today sells more than 100,000 solar panels each year throughout the entire United States. Associate editor Steven Bushong visited Affordable Solar’s headquarters in February to chat with Hughes and Nestor Tarango, director of sales.
Nestor Tarango, director of sales for Affordable Solar
How does Affordable Solar function as a distributor?
We gear a lot of our services toward the residential installer looking to grow their business. We do that by opening local warehouses in key markets to avoid high costs of shipping. We try to move all the procurement and logistics aspects of the installation business in-house and let the installer focus on what they do best, sales, marketing and installation. We can save installers 20 to 40 hours a week just in planning.
One of the biggest things we do is help people with their go-to market strategy. If an installer buys from a manufacturer, they’re a very small customer. However, working with a distributor gives them personalized attention and offers other services the installer can take advantage of.
We’re able to leverage best practices we see across the industry and create business partnerships that allow everyone to grow. One way we do that is through sales training. Tailored training programs give installers and sales teams the tools they need to differentiate their business and reduce soft costs, resulting in higher margins.
Why is it important for distributors such as Affordable Solar to also know the installation side of the business?
One of the benefits of being in business since 1998 is that we have seen installation companies make the same mistakes over and over again. We’re able to help installers avoid making those mistakes.
The two most important things an installer can focus on are customer acquisition and installation efficiency. The more insight you have in the business, the more you can drive value. There are different things installers doing five to 10 systems a month focus on compared to installers doing 30 to 50 systems. We help our customers understand what other installers in the country are doing, and how to avoid making the classic mistakes.
We minimize the time installers spend fussing with individual orders to streamline the installation process. For example, rather than emailing back and forth for every job, installers can use our online platform to organize jobs, get systems designed and coordinate delivery. The only reason we know to do that is because we have almost 20 years of industry experience.
What kind of project support do you provide to installers?
Oftentimes a solar contractor may not have the experience or résumé to win a large project, so one of the things we will do is partner with them. We offer commercial project support, which makes our customers much more competitive on those big jobs. We can also bring financing to the table that they can’t get on their own. We consider ourselves a business partner and help our installers gain legitimacy through our experience.
Why should installers turn to a distributor vs. a manufacturer?
Few contractors have been in business for more than five years, so it’s difficult for them to get credit with the manufacturer. If you’re going to buy a container of panels and put them in the warehouse somewhere, you’ll need cash to do that. If you’re growing quickly and have a lot of expenses, it makes more sense to use your cash for building your sales and installation capacity than for putting it in expensive inventory. You also have to commit to high volumes or minimum purchases with manufacturers. Working with a distributor usually means the ability to get credit and have better customer service.
Another issue with manufacturers is once you get the inventory, you have to manage it. It’s expensive to have that much money tied up in the warehouse and have internal staff coordinating with installation crews. With a distributor, they are coordinating all of that for you.
Manufacturers are still in a consolidation stage. Because of that, they’re a little desperate. They’re selling to anyone. We’ve seen several module manufacturers that have gone direct and shortly after have gone out of business. They aren’t moving enough modules, so they’re directing reps to sell smaller, but manufacturers aren’t built for that. It leaves installers without material, and they’re frustrated. We’re seeing installers come back to distribution because their businesses are growing fast, and they don’t have time to manage inventory and deal with delays in the supply chain.
What should an installer look for in a distributor?
There are some distributors that are purely transactional brokers. You go to them with a list of components, and they tell you if they are in stock. There is a transaction, and that’s it. Then there are distributors like us—we’re invested in helping our dealers spend less time focusing on logistics and more time winning jobs. We ask installers their goals and work to help them achieve those goals.
Installers should ask: How does my distributor help me grow my business, acquire more customers and save time and money? SPW
