Utility Business Models

Rooftop Solar Developers

This could be a rant because I only have to deal with the worst of the developers. <<rant mode on>> You know the ones that use door knockers, or offshore call centers to scare people into buying solar. Then don’t tell them that they are taking out a second mortgage and then do poor work that can’t pass inspection (e.g. Power Home or Pink Energy) <<rant mode off>>

Solar developers use GAAP accounting, combined with government subsidies to fund their businesses. The good ones easily make 100% pre-tax profit (several have tried to hire me and showed me the books). It is good business, if you know how to run it and to treat your customers right. The good ones (~90-99%) are in it for the right reasons.

Most states do not have any special requirements as installer, a general contractors license and insurance and you are good to go. Find a licensed electrician and otherwise a team of laborers and you have a crew.

Most states have a simple application process the interconnection, using an online form and a small payment (many states ask the utilities to only charge $25-50, and lose money processing the forms). State timeline requirements require an application to be processed in 5-15 business days for interconnections less than 50 kW. Developers who know what they are doing can get 95% of their applications right on the first try and get a reputation with the utility of doing so. Then there are the developers who can take 6-24 times to get it right they also get a reputation.

Good developers’ setup warranties and maintenance contracts, are checking with customers, and making sure that the system is working, etc.

Good developers have a storefront that they work out of, and a reasonable supply of parts on hand.

Good developers make sure that safety equipment is used by their crews. That training is done, and quality assurance is also done. They don’t let people install solar panels if the roof is shot, and they don’t bundle solar and roofing services.

Good developers, the vast majority of the industry are partners in the transition.

<<Rant mode on>> Now if the industry would start culling or calling out bad developers, things would be better for all. <<Rant mode off>>

Next Post – What are the keys to selling into the industry by type of utility.

Utility Business Models - Part #11