SolarCity CEO Says Solar Installation Biz Splitting into Big Guys and Little Guys

SolarCity_Lyndon RivecroppedSolarcity CEO Lyndon Rive said in an interview Friday that he is seeing a growing market schism between the thousands of small, local solar panel installers and a “half a dozen or so” national players that can provide “a trusted brand focusing on scale and services.”

Rise of the Brand Names

Solarcity, which the 32-year old Rive co-founded in 2006, has grown to be one of the leading solar panel installers in California, and perhaps the most recognizable solar installation company in the country.

The solar panel industry is still one where success is measured in the thousands of customers, not millions or billions, however, and despite its high-profile status in the news media, solar installers are still in a very niche business.

As a result, until recently there were no large, integrated “brand name” solar panel companies, but only a plethora of small independent contractors, whose quality and reliability often varies greatly. This variability unfortunately has had the effect of further increasing consumer doubts about solar electricity.

“We’ve all had our bad contractor experience when someone’s doing work on your home,” said Rive. “A lot of the small companies out there fall into that category — there are some smaller guys that do do good service, but they’re not always easy to find.”

But with the emergence of big, “national” brands like Solarcity, and competitors Sunpower, Sunwize, REC Solar, Akeena Solar and others, solar power has an opportunity to escape its quirky “green silo” and emerge as a more mainstream household purchase, albeit one that still costs upwards of $15,000. Many of these companies provide not only installation, but extensive customer support as well as financing.

Solar Predictions

As evidence of this change, Rive said that after 40 percent growth in this recessionary year, he expects Solarcity’s business to grow by 250 percent next year. This despite his belief that reduction in solar rebates will swallow any efficiency-led decreases in price.

The industry took hit this year with the rest of the economy, but benefited from a drop in solar panel prices by as much as 40 percent. Rive says that dramatic drop will not continue into next year, calling this years drop “an anomaly,” although he agreed with forecasts that prices will continue to go down by percentages in the single digits.

Got Solar?

One idea that has been floated in industry circles to accelerate solar’s emergence is an industry-wide promotional campaign, similar to the very successful “Got Milk?” campaign. Also known as a “check off” program, it is being considered by the Solar Energy Industries Association, according to SEIA President Rhone Resch.

Rive said such a campaign will have to wait until the industry shake-out mentioned above takes its course. “I think for now it will still be individual efforts establishing a brand within [each company]…I like the idea — I think it will be a long time until we get there.”

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.