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Wednesday, April 14, 2010

The Problem with Solar

As one distributor put it….”the price continues to go down and technology continues to evolve. Should I stock PV panels? No way! And the flip side is that there are sometimes a 2 to 3 week lead time. The Chinese control this market.”


And from this distributor that is trying to work with several solar panel installers in their local area: “We contacted a ‘manufacturer’ for a commercial job for a quote, job gets let and the contractor is awarded the job, places the order for the panels, and all of a sudden the contractor is approached with a direct sale from a solar panel broker completely out of my market area with a price that is anywhere from 30-50% below MY COST. We compared specs and in three jobs the specs are the same. So where is the money in this for a distributor? What we do know is that it is not in my market place.”


As another distributor put it “ This whole solar thing is screwed up, it is stupid! We have a manufacturer up here in New England (Evergreen Solar) that received all sorts of grants (state and federal) to create American jobs. They took the grant money and found out they couldn’t manufacturer here in America at the cost they needed and then shipped a large number of jobs to China. While this ‘manufacturer’ maybe within the letter of the grant, the reality is that they couldn’t manufacturer a competitive product here in the USA.  So they shipped the jobs offshore. On our end we are left with trying to serve a market place and they can’t get product in a reasonable time frame that is competitive.”


Could it be that “solar distribution” is in a situation where the technology is changing so fast that prices may not stabilize for sometime? Or is this a regional marketing issue? How do your view this in your market place?

2 comments:

  1. the one advantage a distributor has in solar is to provide an installation service to the contractors. solar has 3 times the amount of electrical 'stuff' than wind power: connectors, cables, transformers, etc. the distributor who can understand the complexity of installing PV panels and provide a one-stop installation program for the contractors will win big. this is akin to a 'kitting' strategy, where based upon the number of panels, the distributor could provide the proper number of components required to make the installation go faster; i.e. labor savings for the contractor. It's far more complicated than it may appear and the money isn't in the PV panels... it's in the 'stuff'.

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  2. I am a Regional Sales Manager for Rheem Mfg. and we have put together 'kits' for Solar Thermal of water. The kits allow you to order 1 part number and receive the panels, thermal storage tank, pump, controller, thermal expansion tank and various other parts & pieces. The only item not included is the copper runs, due to the fact that each home is different! This has not helped our 'margins' and in fact I have been told that price is higher than other distributors. Mainly because they are able to price the individual parts as inexpensively as possible....however, the ease of placing One Order with One Vendor and not getting separate invoices from different vendors is bette in the long run. ALSO - the entire package is warranteed by Rheem so the sourcing of parts when there is a problem is not as difficult either.

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