Solar installers and EPC contractors are looking for new strategies to simplify procurement and ensure they have solar components when they need them. E-procurement is emerging as a preferred strategy to source solar panels and components, and B2B solar marketplaces provide product buyers with a central location to request quotes and order supplies.
B2B marketplaces aren’t new, and the average consumer is likely familiar with a few. According to McKinsey, 65% of B2B companies across all industries execute sales online. Spurred by the pandemic and other factors, industrial suppliers have accelerated their e-commerce timetables to embrace online selling. In fact, for the first time, B2B vendors are more likely to offer e-commerce selling instead of in-person orders, which is great because only 20% of B2B buyers say they want to return to in-person selling.
The boom in solar sales makes this the right time for a solar B2B e-commerce exchange. Global solar installations are up 64% from 2022 to 2023, and BloombergNEF estimates 413 GW were installed in 2023. At the same time, competition is heating up. Global module manufacturing capacity is at 839 GW and inventory is building, putting module prices at an all-time low.
A solar B2B trading platform gives EPC contractors access to a broader supplier base, allowing them to shop for the best price, issue RFQs and finalize transactions. For any B2B solar marketplace to succeed, it needs:
- Industry-wide coverage – Access to every component from solar panels to cable.
- Geographic reach – Delivery to every market since larger markets increase transaction volumes.
- Buyers and sellers – More users mean more transactions and increased marketplace value.
- Frequency of transactions – The more frequent the repeat purchases, the greater the transaction volume.
- Market penetration – The more accepted B2B e-commerce becomes, the higher the transaction values.
The value of any B2B trading exchange is also dependent on market growth. With SEIA predicting that the U.S. solar market will triple in size from 2023 to 2028, adding 236 GWDC, this is the perfect time to embrace an e-commerce trading platform to increase competition and optimize procurement.
The solar trading platform solution
A B2B solar marketplace alleviates many procurement issues for installers, giving buyers more options to find the necessary components and increasing competition among sellers. An online trading platform has various advantages for installers:
- It provides a one-stop shop for all solar components.
- It enables buyers to negotiate sales and contracts directly with suppliers.
- It eliminates issues about available inventory.
- It provides visibility and access to manufacturers’ on-hand and future production inventory.
- It creates a competitive bidding environment to get the best price.
- It enables purchasing through the platform to simplify transactions and speed delivery.
- It provides a forum to source used as well as new components.
An e-commerce marketplace also allows EPC contractors to create RFQs for bigger jobs or specialty contracts. Competitive bids are managed through the platform, and the buyer can negotiate final terms with the seller to complete the sale.
An online solar exchange improves efficiency for buyers and sellers, promoting transaction transparency. An exchange makes brand and comparison shopping easier and helps establish better relationships with suppliers. It also gives buyers and sellers analytic data to simplify inventory planning and budgeting.
Online B2B marketplaces that aggregate products are a trend that is here to stay. E-procurement offers too many advantages for installers, contractors, distributors and manufacturers. Buyers can buy goods anywhere, anytime. Sellers gain access to a larger market base and reach customers they would otherwise miss. The time has come for solar B2B e-procurement trading platforms.
Kadeer Beg is the Chief Operating Officer of Sunhub, a B2B e-commerce marketplace for solar and renewable energy equipment and components.