The distributed-generation market saw 121 policies and rate changes in the second quarter of 2016 alone, according to the NC Clean Energy Technology Center. In a market facing complex challenges daily, it’d be nice if installers could know the future. After all, predictability is business’s best friend.
Eager for a glimpse of what’s to come, installers packed a forum Tuesday at Solar Power International focused on the future of residential solar. But moderator Pamela Cargill quickly admitted the future can’t be predicted. Still, the forum crowd-sourced predictions on two key questions about the future of residential solar, and then a panel of experts discussed the results.
Question one: What type of company will dominate the business of residential solar in five years?
Thirty percent of the forum’s attendees who live-voted by phone said the residential market will look in five years much like it does today. About a quarter said small local contractors will dominate the market. The remaining votes were evenly divided among national non-solar brands, utilities and “something else.”
Panelist Michael Grasso, chief marketing officer at Sunrun, a company built on the solar-lease model, said more consumers will take up solar leases over the next five years. He said the leasing model makes going solar easy for consumers. “That doesn’t mean there won’t be a lot of healthy local installers in the market,” Grasso said.
The conversation quickly turned toward transparency and quality work, with agreement among the panelists that companies providing quality work at a fair price will rise and survive, regardless of their size or business model.
“The challenge of achieving scale and winning in the future market is educating consumers and having transparency in pricing,” said Rick Luna, senior product development manager at municipal utility CPS Energy. Luna offered an example of wide pricing disparities in San Antonio, with customers struggling to understand what price is a good deal and who is a trustworthy installer. “Whoever can address those challenges has a leg up,” he said.
Question two: What will be the predominant business model of residential solar in five years?
The largest portion of voters agreed that residential solar will be offered by non-utilities in bundles with other products and services, especially energy storage. In smaller numbers, voters thought the model would be the same as today or utility companies would be heading up residential solar in five years.
Still, the panelist agreed two things need to happen before solar-storage bundles become part of every company’s sales process: A true market for storage must develop and the technology needs to improve.
“There was never interest in backup until Elon Musk talked,” said panelist Jim Jenal, founder and CEO of Run on Sun. “Consumers have since developed high expectations, and you spend a fair amount of time walking back those expectations.”
Panelist Ed Murray, president and CEO of Aztec Solar, said companies that treat buildings as envelopes for smart energy technology will succeed. Grasso agreed.
“I can’t imagine a situation where we’ll be selling stand-alone PV [in five years],” Grasso said. “It’s a matter of what are you trying to solve for the consumer? In Hawaii, we can bundle storage and PV for $0.19/kWh in a market with utility rates starting at $0.25/kWh. As prices in storage fall, and more needs pile up, that will add value to coupling of storage and PV.”
What do you think? Tell us in the comments below.