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Solar Top 500: State of the Industry

  • August 11th, 2016
  • admin

It’s been a good year for solar. Jobs are on the rise. Over one million solar systems have been installed across the country. Innovations continue to wow the world (floatovoltaics, solar flowers, and a solar plane to name a few).

As we push forward toward a clean energy future, we must constantly assess and improve upon our processes, our technology, and our methods of communicating the value of solar and sustainability to the public. While not all-inclusive, the recent publication of Solar Power World’s Top 500 Solar Contractors report offers a glimpse into the current state of the industry and the direction we are heading. There’s much to be gained from assessing the key players and sectors of the industry that have pulled ahead—and those that are falling behind.

This year’s list largely reflects the current climate of the industry, with the utility-scale solar market continuing to dominate. As in any growing industry, there’s much room for debate on solar.  Here’s our take on the solar top 500.

Utility-Scale Market Continues to Top the Charts

When you examine the top contractors in the overall and state lists, you’ll find contractors and EPCs in the utility market near the top. This hardly comes as a surprise. Utility solar contractors and EPCs have the advantage of experience, as this market developed and scaled long before the residential market. Many utility-scale contractors have over 1,000 MW of experience under their belts and a network of reliable manufacturers and installers that deliver consistent results with each project.

Most of the top performers in the solar 500 also concentrate their efforts on one to two markets, mainly utility and commercial. This could suggest that a focused effort is more effective than covering all sectors of the industry. But taking a closer look at the top ten, we see that 70% of the contractors have been in business for around 20 years—some for 60 years or more. With a wealth of experience to back them up, these companies may be the best positioned to branch out into the residential market. Granted, the residential market is much different, but top utility-scale solar contractors could have the infrastructure to successfully incorporate residential solar into their served markets. Of course, this requires a different approach to marketing and sales.

The Role of Geography

The majority of the top 500 contractors are from the leading solar states, where solar is both feasible and in demand. California contractors alone constitute over a quarter of the entire list. Solar is arguably the most mainstream in California, a state that is leading the nation in solar installations with 4,427 MW installed to date (as of 8/11/16).

It is possible that more competition in California could be benefiting attitudes about solar in the state. With more voices engaging in discussions about the benefits of solar, California solar companies are reaching a bigger audience with information on the value of solar. State policies also play a major role solar adoption, but compelling and accurate dissemination of solar knowledge can, at minimum, encourage residents to advocate for more favorable solar policies in their state government.

Contractors Concerned About Utilities

Solar Power World’s survey indicated that the large majority of contractors described their relationship with utilities as great, good, or average. Yet utilities were also cited as the number one concern facing the industry, followed by net metering. If these stats indicate anything, in combination with the success of the utility-scale market, it’s that solar’s relationship with utilities is complicated. The number of contractors reporting positive relationships with utilities (from great to average) suggests that we can’t really say most utility companies are anti-solar and would rather wreck the planet for a profit. However, the rise of solar energy is disrupting utility companies’ longstanding business models. Not all utility companies know how to handle these sudden influxes of energy generation from solar PV installations connected to the grid. We can’t really blame them for being cautious—after all, how often does an industry grow at the exponential rate that solar has?

Looking forward, one of the biggest questions we’ll need to grapple with is what the role of utility companies is and should be. And with the success of the solar industry tied to state policies and utility rates, this is a conversation that will ultimately require collaboration from all sides. How can utilities continue to provide grid maintenance and low-cost electricity while still rewarding those who generate solar energy?

Need for Trust in the Residential Market

Residential solar contractors, on the other hand, are more toward the middle and back of the solar top 500. While these contractors are by no means doing a poor job, the lack of residential solar representation even within the top 50 is reflective, in part, of the newness of residential solar. Residential solar has begun to rise in popularity in recent years, but this is also dependent on location. In our hometown of Cincinnati, Ohio, for example, you’re much more likely to see utility-scale and commercial solar installations–such as solar carports—than residential PV installations.

As residential solar becomes more common, the aggressive sales tactics of some solar companies have led to suspicion and confusion. Some companies go door-to-door, try to lure potential solar customers with deals and discounts, or pressure them to go solar before considering their options. And, there are far too many stories of poor solar installations by individuals who didn’t know what they were doing. With misinformation abound, it’s understandable for potential residential solar-goers to be a bit cautious in making the switch.

Without the backing of years of experience like the utility market, residential solar needs to establish trust and transparency. Many of the companies on the solar top 500 are doing just that. But growing and sustaining the residential solar market will require contractors and manufacturers alike to continue dispelling solar myths and misinformation while consistently producing quality solar systems.

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