Editor’s Note: The Solar Power World Top 250 list represents the best companies in the industry. We asked some of their leaders to share lessons they’ve learned on their way to the top.
By Frank Andorka, Editorial Director
Over the past three years, the solar industry has grown at impressive rates, showing an average of 87% on its way to being the fastest-growing segment of the U.S. economy. In the first quarter of 2013, it grew 33% over the same period in 2012.
The companies featured in Solar Power World Top 250 Contractors list contributed mightily to this growth, and that’s why we decided to recognize their hard work and dedication.
A few of these leaders agreed to share their strategies with you. They come from all segments of the industry, and no two approaches are the same. If you take their advice, you could join their ranks next year.
Success depends upon previous preparation, and without such preparation there is sure to be failure.
— Confucius
Prepare To Succeed
Success isn’t accidental. It comes from having clear plans and precise execution.
“Our best decision was to focus on delivering energy directly to customers at a discount from their utility rates,” says Jonathan Bass, director of communications at San Mateo, Calif.’s SolarCity. “We decided it was important to break the mindset that sustainability is expensive.”
Bass says SolarCity is focused entirely on creating a comprehensive suite of products and supports that make going solar easy for consumers. “We needed to make customers comfortable not only with SolarCity, but the idea of solar in general,” Bass says.
But businesses are made up of people. If you don’t hire the right people, even the best-laid plans will fail, says Rob Rabe, director of business development for Fort Washington, Pa.-based Tecta Solar.
“It’s important — and often difficult — to maintain a disciplined hiring strategy,” Rabe says. “But you have to maintain the highest standards and only bring in top people. They’re your primary conduits to your customers. Bad customer experiences can ruin your reputation, so getting the right people on the team is essential.”
A policy is a temporary creed liable to be changed, but while it holds good, it has got to be pursued with apostolic zeal.
Policy Predictions And Protections
Since the future of the solar industry is so tied to state and federal policy, it’s important to foresee what’s going to happen on those fronts — and lobby either for — or against — legislation.
After all, the industry employs 119,000 people (the Top 250 featured here employ 73,068 of those workers). With economic development in the forefront of every representative’s mind, the solar story will resonate. It’s time for the solar industry should push its advantage to ensure the passage of the investment tax credit (ITC).
Lance Kulick, president of Oakland, N.J.-based Amberjack Solar Energy, says it can’t stress enough how important the ITC has been — and will continue to be — for the industry.
“Government incentives have been the best catalysts to the industry,” Kulick says. “The ITC is the single most important factor for industry growth. Eliminating the 30% ITC entirely would be devastating.”
“The eight-year extension of the ITC in 2008 was the most significant policy development in the history of U.S. solar,” SolarCity’s Bass says. “It allowed companies like ours to invest in building a scale sufficient to absorb gradual incentive reductions over time.
“A more gradual reduction would be preferable to the cliff in 2016, but our plan is to achieve annual cost reductions to be ready should the drop occur,” he adds.
A national policy to ensure market stability would be ideal, but Tecta Solar’s Rabe is not expecting miracles.
“It’s doubtful that will happen anytime soon,” Rabe says. “States with strong renewable portfolio standards (RPS) with solar carve-outs — or local utility programs — are ideal. In my state [Pennsylvania], there’s a poorly designed solar program that has created a boom-and-bust cycle. It’s been mostly bust.”
To be successful be ahead of your time, but only a little.
— Mason Cooley, American aphorist
Peek Around The Corner
In such a rapidly changing industry like solar, it’s difficult to adapt your business to meet the ever-evolving technology. By focusing on training, it’s not impossible to lead — not bleed — with the latest technology.
“It’s important for people to understand the solar industry is just that — its own industry,” says John Caravette, vice president of Chicago-based Earth Wind & Solar. “You can no longer just be an electrician who happens to install solar. Technology will continue to advance and further lower installed costs, but training — that’s where we need help.”
While technology advances, it also disappears (see Solyndra). The solar technology of a decade ago — or even five years ago — looks antiquated compared to what the industry installs now. Microinverters, power optimizers, third-party monitoring systems — all these technologies are revolutionizing the industry. Therefore, up-to-date training about which Caravette speaks is crucial.
As innovations shape the industry at warp speed, smart business owners must prepare for the possibility that some of the manufacturers they use now will fail. Though such consolidation may cause some sleepless nights, the industry’s Top 250 companies are not only barely fazed — they are quite pleased.
“Consolidation is a natural and expected outcome of any market that goes from its early stages to maturity,” says James Marlow, CEO of Atlanta-based Radiance Solar. “Solar will continue to be a dynamic market that feels a bit like rafting in permanent whitewater.
“We as solar installers must be flexible and change as the technology and economics require,” he adds. “Our job is not going to get easier. But nothing worth doing is ever easy.”
Tecta’s Rabe says there are too many companies in the market, artificially lowering prices and preventing manufacturers from making profits.
“Consolidation is necessary, as margins are often lean,” Rabe says. “There were too may fly-by-night companies having a negative impact on the market. As a large national EPC with a large balance sheet, consolidation has been working in our favor — and we expect more of it in the future.”
In the end, these Top 250 companies have risen to the top through preparation, flexibility and a more complete understanding of the market than their competitors — and they see a bright future ahead.
“I see a model where solar can work without incentives,” Radiance’s Marlow says. “But at least at our company, we’re more bullish on solar for utility, commercial and residential use than ever before.”
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