Solar Power Goes Mainstream with Help from Solar Brokers
Solar brokers expand the solar market by making solar sales easier and cheaper
Jul 6, 2011 12:22 PM ET
The growth of the US solar power industry has been extraordinary by any standard in recent years. The solar industry grew 67% in 2010 despite sluggish economic conditions overall, performance that few other industries can match. The solar market is growing rapidly in states like New Jersey, Massachusetts, Maryland and Pennsylvania as high energy prices, solar incentives, and falling solar panel prices boost the solar market. The growth of the solar market means that it is not just for treehuggers. A growing number of savvy businesses and homeowners are buying solar power not just because it’s good for the planet but because it makes financial sense, moving solar from a market niche to a mainstream business.
The growing solar market has attracted a variety of new businesses. A multitude of new manufacturers have entered the competitive fray (there are about 450 major manufacturers worldwide), and a large number of solar sales and installation companies are springing up as well, with over 400 in Pennsylvania alone.
As the return on investment becomes more rapid for solar, and no money down options from financing to solar leases increasingly available, solar becomes quite attractive financially. A great many potential customers are still unsure of going solar though. The great variety of solar panels, installers, incentives, and other choices can be confusing, and most clients don’t want to spend a lot of their own time figuring out the details.
To help solar reach its potential in the mainstream market, the emerging solar broker business model can make buying solar power simple, easy, and inexpensive.
Solar Brokers can navigate the maze of solar options on behalf of clients, working with each client to identify their needs, find cost effective solar solutions, solicit bids from solar installers, and guide the selection of the winning bid. By operating independently in the process rather than for a specific solar panel manufacturer or solar installer, the solar broker can better represent the needs of the client and ensure the best deal for them.
Financing options is one hurdle to solar power sales that solar brokers help clients deal with. Rebates and tax credits help to make solar more attractive, but homeowners and businesses can find them confusing. Far fewer homeowners have the option of taking out a home equity loan to pay for solar installation, and businesses can be reluctant to use their precious cash to install solar power. Financing options such as leasing solar and power purchase agreements (PPAs) that require no cash out of pocket are important strategies to boost solar sales.
Some solar brokers may specialize in cutting special deals with landowners, establishing a PPA to sell power back to the utility at a profit in states with favorable subsidies. The landowners keep a nice portion of the profits, perhaps as high as 50%. This scenario has obvious benefits for landowners and solar brokers, generating a profit with a very leveraged investment after financing, with funding often provided by the solar broker’s efforts.
Solar brokers employ other financial mechanisms to help the solar market grow. A solar broker may negotiate volume energy buying between a collective of homeowners or buyers and a power company. In a competitive energy market, discounts may vary from 10% and 25% off the going rate for solar electricity. For renewable energy installations such as wind turbines, the broker can help larger businesses to purchase carbon offsets for the emissions they cannot directly eliminate.
Prime Solar, LLC t/a www.primesolarnetwork.com is one solar broker company offering many of these services. The Company offers exclusive territories entrepreneurs can license to build solar broker businesses with the company and is growing in 14 states. Using this model, Prime Solar Network provides licensees with support for marketing, financing, website development, training, and other aspects required to grow their business.
“There are solar brokers with models similar to ours, as well as a couple of companies offering licensing, but we are we are clearly different in several respects. First, we offer solar brokering and licensing, and second we offer our Solar iQuote, our ability to provide remote and accurate pricing upfront to a client. Thereafter, we competitively bid for clients and provide even better value,” advised Tim Cassidy, CEO of Prime Solar.
For solar to reach its full potential, it needs to be accessible to people and businesses and it needs to be simple, affordable, and practical. Businesses like Prime Solar and solar brokers that achieve these goals will continue to gain market share as the solar industry continues to grow for many years to come.
Glenn Croston is the author of "75 Green Businesses" and "Starting Green", helping businesses to start green and grow greener at www.startingupgreen.com.
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