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Energy » Solar » Page 3

Solar Installation Effectiveness

Posted on September 10, 2012 by Josh Lutton

Today Woodlawn published the results of a multi-client project examining solar installation cost.  We found U.S. residential PV dealers spent an average of $3.69 per Watt to perform installations.  This includes all of the dealers’ installation-related costs.  (Note: this is different from the price of residential solar to the consumer.)

In addition, we found:

  • Dealer gross margins averaged only 20% (using a standard set of costs)
  • By matching low cost dealers in each expense category, dealers could install for $2.13 to $2.59 per Watt
  • Use of microinverters appears to decrease design costs by about $0.06 per Watt

The full report includes items such as:

  • Dealer comparisons on key installation cost metrics (including average and range)
  • Variations in cost as they relate to geography, scale, and microinverter use
  • Installation schedules, including times to perform each step in the installation process
  • 19 strategies for reducing installation costs
  • What module, inverter, and finance vendors ought to do to help dealers reduce installation costs and distinguish themselves from their competition

You can view an extract here.

Solar Dealers Spend $5373 to Acquire Each Customer

Posted on March 16, 2012 by Josh Lutton and Iain Drummond

Woodlawn recently examined the sales and marketing practices of residential solar dealer/installers in the United States.  We collected detailed quantitative and qualitative information from a representative cross section of U.S. solar installers.  With this, we were able to answer questions such as:

  • What is the average solar customer acquisition cost? (An average of $5373, or 16.9% of revenue)
  • What is the “typical” marketing mix?
  • Which channels account for the most customers?
  • Which marketing channels are most effective in terms of new customers per dollar spent?
  • How can dealers optimize their mix of channels?
  • How can dealers maximize the potential of each channel?

You can download an extract.  Please feel free to contact us with any questions.

U.S. Residential Solar Distribution: Lessons from Mature Industries

Posted on November 1, 2011 by Josh Lutton

Note:  A version of this post appears in the May 2012 issue of Solar Industry magazine.

The U.S. residential solar market has grown substantially over the past several years. Companies such as SolarCity, Sungevity, and SunRun have brought innovative business models and scale to the business. However, the market is still served by a very large number of dealer-installers. As solar increasingly becomes a mainstream business, we thought it would make sense to look at how mature industries with similarities to solar distribute and sell their products to find hints about the business models that will be successful in the future.

To do this, we identified industries whose products are, like solar, sold to consumers or installed in single family homes, related to energy, professionally installed, and that have long expected lives. We also looked for products that have an aesthetic aspect and that cost $10,000 or more. In the end, we studied the sales channels for circuit breaker boxes, hot water heaters, flooring materials, roofing materials, central air conditioners, backup generators, and windows.

[Read more…]

Solar Distribution: Lessons from Residential Construction, Energy, and Infrastructure-Related Products

Posted on June 9, 2011 by Josh Lutton and Iain Drummond

Woodlawn recently examined the go-to-market approaches of industries such as residential load centers (“fuse boxes”), hot water heaters, roofing materials, flooring materials, standby generator sets, windows, and central air conditioning to see what lessons they might teach us about solar distribution as the market grows and distribution matures.

Here are some of our key findings:

  • In industries with “complex” sales, such as generators, windows, and air conditioning, dealers are a significant part of the channel
  • In these industries, dealers tend to buy directly from manufacturers or from exclusive distributors
  • Industries with more commoditized products, such as roofing, load centers, and hot water heaters, tend to rely more on wholesalers
  • Wholesalers are rarely good at market development.  Their value is in inventory, terms, and bundling of related products from different manufacturers
  • Where sales are made indirectly, producers often have sales and marketing teams that “skip” levels of the distribution chain to generate goodwill, familiarity, and assist downstream partners with marketing and unusually large contracts.

Download a detailed summary of our findings here.  Also, see a slightly updated version that appeared in Solar Industry.

Solar Sales Channels: Current Status and Likely Evolution of Residential Solar Sales in the U.S.

Posted on April 14, 2011 by Josh Lutton

Woodlawn Associates recently interviewed more than 20 solar dealers and other experts to understand what they want from manufacturers of solar modules and inverters and to help dealer-installers understand how the sales channel is likely to evolve.

In summary, we found SunPower and SMA had highest consideration rates for solar modules and inverters, respectively.  We also found that Mitsubishi, Schott, Sanyo, and Trina could gain market share in PV if they execute well.  These manufacturers had consideration rates considerably above their current market shares.

Installers told us product availability, commercial terms, and customer sales leads are among the most important purchase drivers, although the supply shortages that were endemic over the past year appear to have eased.

Leases and PPAs have become hugely important in the market, now accounting for nearly half of residential sales in some states.  The rise of such financing potentially reduces the importance of manufacturer brands, as the risk of non-performance is placed on the lease provider, not the consumer.

Many people in the industry find Sungevity’s and SunRun’s business models to be highly novel and risky, but based on our experience in other industries, they are much less so than many people think.  On the other hand, we find that solar franchising is missing some of the ingredients common in other successfully franchised industries.

Finally, since the residential sales market is highly fragmented, we think it is unlikely manufacturers will integrate downstream.

Download a complete report here.

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