By Folsom Labs
As solar developers gear up for 2017, software solutions for reducing soft costs is a major theme on managers’ minds. The S3 Solar Software Summit has emerged as the premier event where these leaders can meet to discuss how they are organizing their teams and the tools they use to drive down costs–while also meeting with software vendors developing new products. With the annual Solar Software Summit just around the corner (May 16th), we wanted to recap some of the key takeaways that came out of the opening keynote of last year’s event.
MJ Shiao of GTM Research kicked off the Solar Software Summit by pointing out that while the market was nascent, it will be a critical piece of enabling the solar industry to scale. “By 2020, we see 40 states at or near grid parity,” Shiao explained. “These states represent hundreds of utilities, and thousands of municipalities, all with their own local rules and regulations.” Good software tools will enable solar developers to expand to these new markets to serve this diverse set of solar demand.
Soft cost reductions are particularly critical for both residential and commercial development. For an industry that projects doubling the number of existing installations in just a couple years, those costs will become a limiting factor if not addressed. “Long tail” installers (those outside of the top-five) make up 46% of the installed base of residential solar, and their market share is increasing.
Paul Grana, co-founder of Folsom Labs, pointed out that today’s solar industry can actually learn from the industrial revolution of the early 20th century. As factories adopted the newest electric motors, productivity actually fell over the initial 20 years. This was because the initial factories simply replaced central steam boilers with electric motors without modifying their existing drive-shaft factory infrastructure.
Eventually, factory managers realized that they could redesign their entire factory process because of the new electric motors. They were able to batch machines with electric motors based on the work flow process, localize failures and modify factory layouts based on changes in demand. The electric motor opened up factories to strategic layout and process changes (see Figure 2), which ultimately increased productivity by 80%.
“New technology alone will not reduce cost,” Grana pointed out. “It is only when managers use these new technologies to unlock improvements in their team and their processes that they can drive improved productivity.”
For the solar software industry, this means re-organizing work between the sales team and engineering team, to front-load the design and customer engagement, while automating back-end tasks such as permit set generation. Additionally, API tie-ins between products (such as sales/design, finance, mobile phone applications and CRM tools) will further streamline delivering solar arrays.
“The future of the solar industry is when a company can increase their throughput by 50%, without increasing the team size,” Grana said. “This won’t be accomplished simply by adopting software tools, but will be enabled by software tools.”
Every facet of the solar industry is changing, with software playing a key role. Be part of the conversation by joining us May 16, 2017 at the 2017 Solar Software Summit.
Read more Solar Boot-up articles from Folsom Labs here.