Residential Solar: Competition Can Create Confusion

There is now enough installed solar energy capacity in the United States to power 8.3 million homes, according to the Solar Energy Industries Association. In fact, 1 million homes already have solar systems, and the utility-scale sector is facing record-breaking growth. Although the solar industry has experienced an impressive boom, some factors still hinder greater solar energy deployment.

TriplePundit spoke with Vikram Aggarwal, founder and CEO of EnergySage, the so-called “Expedia of solar,” about the hurdles for greater residential solar energy deployment. Although competition is usually viewed as a force that can help promote growth in an industry, Aggarwal had some interesting insights that contradict this notion.

EnergySage recently released the results of its 2016 Solar Installer Survey with input from over 360 U.S. solar installers. According to the survey, 53 percent of installers said their largest obstacle to closing sales is the confusion created by their competitors and the associated impact on overall consumer confidence.

Solar companies say prospective solar customers are getting more competing bids for a solar system than last year, and 32 percent of installers report that it's harder to acquire customers.

Rather than increasing consumer confidence, competition among solar installers might be undermining sales. Aggarwal described what he considers a relatively common scenario in residential solar.

"A solar installer asks what other quotes the potential customer is getting. The installer then might badmouth the other installer or the equipment they are using. The installer thinks they are helping their cause, but it creates confusion for the consumer. If there isn’t a third party like EnergySage, then who will break the tie?"

EnergySage helps increase the confidence for solar shoppers by letting users rate solar installers on several different criteria. This provides solar shoppers with an unbiased source of information, independent of the solar installers and equipment manufacturers. Historically, consumers have relied on solar salespeople as a source of information when making a purchasing decision, although this information is likely to be biased or even incorrect.

"Solar has grown quite fast. A lot of companies have hired a lot of salespeople, and they are not all well trained in solar," Aggarwal explained. "It takes about three, four or five months for someone to really understand solar. Unfortunately, many of these salespeople don’t know solar that well, and consumers can tell."

Rapid hiring rates are a symptom of solar being a young industry that is experiencing rapid growth. Solar employment increased by 51,000 jobs in 2016, representing a 25 percent increase over 2015. 

"The solar industry is still new after 20 years of significant growth," Aggarwal said. "From the consumer perspective, when you or I go in to buy a car or air conditioner, we trust the product. With solar, if the installer says the other installer is wrong because they want to sell their product, then it is very damaging to the consumer’s confidence."

Interestingly, consumers aren't necessarily buying the lowest-priced solar system, Aggarwal told us. "Consumers want to know: Is it a Honda, or is it a Mercedes? People are willing to pay Mercedes prices for a Mercedes but not for a Honda. Most people don’t go with the cheapest solar bid. Consumers are picking better-quality equipment."

Image Credit: Kaloyan Lozanov