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

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.

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