Commercial-scale was the only solar segment that grew last year while utility and residential shrunk, according to SEIA’s “Solar Market Insight Report 2017 Year in Review.” A new company aims to help construction businesses—not just solar installers—get into the lucrative market.
“There’s really no solar software out there right now that caters to non-solar specific companies,” said SolBid founder Nate Raymond.
SolBid is an engineering and procurement software company founded by Ian Ricci that works with business-to-business companies to design and procure solar projects, similar to Sunrun’s subcontracting business model. SolBid’s “channel partners” sell commercial clients solar with cash or a term loan purchase option, using SolBid’s in-house software to craft the proposal. SolBid then contracts directly with the client and completes engineering and procurement of the project. Then, SolBid sources an electrical contractor on behalf of the client to complete the construction and pays the channel partner a commission for customer acquisition.
SolBid’s clients include electrical contractors, roofing contractors, HVAC companies, the real estate industry, energy brokers and consultants.
So XYZ Roofing would sell a commercial project on behalf of SolBid, SolBid would procure and engineer the project in-house, then contract an electrical contractor to complete the installation. XYZ Roofing receives a commission from SolBid for finding the commercial solar customer, the electrical contractor gets paid for the project construction profit and SolBid collects the rest of the profit.
Some of SolBid’s channel partners are also solar sales companies that only want to market and sell solar and have SolBid handle the rest, then get paid a commission for the sale. The channel partners that are electrical contractors often complete the construction part themselves.
“There’s a lot of electrical contractors out there that we’re working with as partners that want to get into solar, they just don’t have the solar engineering design expertise behind them, so therefore they just don’t do it,” Raymond said.
In that scenario, the channel partner receives both the front-end commission and project construction profit. SolBid provides all the assistance with the things the contractors don’t know how to do or don’t want to do—leaving them to physically construct the job after SolBid completes all the desktop work associated with the project.
“We put everything into a storage container, we drop it on site with a padlock on it, and they show up after they’ve pulled their permits, they use a combo lock, open it up and everything is there including installation instructions on how to install everything,” Raymond said.
SolBid claims to cost less than other EPCs because of buying power and competitive bidding. The company sets up relationships direct to manufacturer, thus reducing the price of components, and it can collect multiple bids for the installation portion to pick the lowest-priced but highest-quality contractor. Raymond said SolBid has been beating competitors by 5 to 10 cents per watt on average.
“It works out great for them because they can go ahead and add revenue to their business without really having to take on that additional learning curve,” Raymond said. “It works great for us because then we have all these companies vying for business on behalf of SolBid, and that reduces our customer acquisition cost quite a bit.”
He thinks SolBid is well-positioned to serve a national market. Typically, if installers want to work in other states, they need to understand a whole new set of permitting codes and get additional licensing, making it difficult to scale. Raymond said there’s not a single commercial solar company owning the nationwide market—instead there are many regional players. Right now, SolBid has fewer than a dozen employees and works in just the Northeast United States, but the plan is to grow the company and become the leader in commercial solar across the United States.
“Our goal is to kind of get in there and become that player that can move across state lines very easily, reduce risk and easily avoid policy decisions in certain states and not have to worry about our business getting taken out because of it,” Raymond said.
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