Maybe someone (NWdiver) can help me understand why this is happening. I would have thought that now that solar panels are less expensive and more people are installing them companies could still be competitive and also make a profit.
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Why are solar companies going out of business
- Thread starter Merrill
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- Energy Environment Policy
bkp_duke
Well-Known Member
US Manufacturers were/are being severely undercut on pricing by Chinese PV manufacturing firms. To the point that there is concern that the Chinese gov is unfairly subsidizing these manufacturers in order to corner the market (short term loss for long-term monopoly). To be clear, if this could be proven it would be a WTO violation (but hard to prove) and would be legal footing for import tariffs.
On a smaller (mom and pop) installer level, it's typical industry shakedown. Many of these operations are just poorly run from a business standpoint.
Recent analysts reads on the industry indicates we might have finally turned a corner, with profitability finally stabilizing for the the larger players (SunPower, Solar City, etc.)
On a smaller (mom and pop) installer level, it's typical industry shakedown. Many of these operations are just poorly run from a business standpoint.
Recent analysts reads on the industry indicates we might have finally turned a corner, with profitability finally stabilizing for the the larger players (SunPower, Solar City, etc.)
regardless of the fact that panels may be less expense the costs associated with retrofitting a home to run off of solar is still too high for the vast majority of people. until the costs become competitive with other sources of energy the solar industry will find little acceptance amongst the majority of consumers.
TheTalkingMule
Distributed Energy Enthusiast
You'll get about 40 different answers to this question and that should give you an idea of the real problem. Mainstream residential solar is such a new idea that the marketplace is full of confusion. Confusion creates an opening for disinformation and regulatory corruption.
Misinformed consumers and shaky regulation lead to massive customer acquisition costs and inefficiency. Inefficiency for small businesses leads to death. Large operators can dump money on the problem but that only makes it worse and eventually leads to death.
We've turned the corner though, and secondary markets outside of CA should start to stabilize. Ironically, the Trump presidency has motivated the marketplace to act and that's leading to a much more informed consumer.
Misinformed consumers and shaky regulation lead to massive customer acquisition costs and inefficiency. Inefficiency for small businesses leads to death. Large operators can dump money on the problem but that only makes it worse and eventually leads to death.
We've turned the corner though, and secondary markets outside of CA should start to stabilize. Ironically, the Trump presidency has motivated the marketplace to act and that's leading to a much more informed consumer.
Ok, thanks for the info, I know at least in California just about anyone who was a roofing company now does solar. I hope things stabilize and the companies that have their act together can survive.
misinformed consumers? the math doesn't work, any consumer with any sort of financial common sense would walk away from installing solar in most parts of the country because the efficiencies offered by installing solar and ROI are just not there. that reality isn't confusing at all.
You surely aren't talking about So Cal, my ROI will be met this year (4th year) and it's all gravy from now on.
Why do you assume that no one is making money?
There is no economy of scale for residential solar. So the big companies struggle due to a faulty business model. There are also no significant barriers to entry to the residential solar biz, so good average margins are not sustainable.
A small efficient company with low customer acquisition costs can provide the owner/manager with a decent living. Just like a small electrical contractor or HVAC company. There is nothing unique about mainstream solar.
Tesla can probably be successful in solar due to differentiation. Solarcity was not substantially differentiated.
MOST is the operative word.
I live in FLORIDA, nicknamed the SUNSHINE state.
on my home, that has fairly good exposure to sunlight the solar systems I've seen generally will only supply about 1/3 of my needs, most days, that doesn't appeal to me and at those levels it would be 15+ years to see any financial savings. sorry but for me and many many others the numbers just don't work. and I am going to assume the numbers are less friendly to vast majority of people in the US who do not share our wonderful climates and sunlight.
Agreed. Economics just aren't worth it unless you're in California. Too much regulatory uncertainty (hello Arizona and Nevada net metering changes), and well as the capital costs. Only reason Solar City and Vinvint were "doing well" was because they kept suckering people into 20 year leases on the equipment, but even then that gravy train ended, hence Solar City having to get acquired by Tesla because customers kept reneging on the leases, and their debt backed securities based off those leases started to become worthless.
TheTalkingMule
Distributed Energy Enthusiast
Chopr147
Active Member
I purchased and had installed my solar in 2012. 10kw system . Full cost $45,000. My actual cost $15,000 to own, not lease. Worked great for me but this was near the tail end of solar tax credits. Never even heard of solar leasing in 2012, in NY anyway. Friend of mine had an estimate about 8 months ago for leasing. Just not worth it anymore. Bottom line obviously is cost factor. W/O tax credits etc.... it's too expensive today
brucet999
Active Member
Can you cite some of those examples of analyst optimism for us? I am planning to install rooftop PV and I would like to select modules and inverter from a manufacturer that is likely still to be in business should I ever need to exercise warranty rights.
Thanks
I highly recommend Sun Power, their equipment is some of the best and they back up their products.
brucet999
Active Member
Why is the yield so low compared to your usage? Do you have a small roof or are you consuming vast amounts of electricity to run AC? Or?
I understand also that Florida PoCos have bribed legislators to make net metering laws very unfriendly to homeowners. Is that right?
brucet999
Active Member
With respect, that is an endorsement of past corporate behavior, not financial viability. I too like SunPower's products and the fact that they are manufactured under excellent environmental standards, but in the past two years plunging module prices have saddled the company with many millions of dollars of debt. Will they still exist when one of my modules fails? I'd feel better if smart money people liked their chances of survival.
Skotty
2014 S P85 | 2023 F-150L
Low demand due to ROI not being sufficient is typical short sighted human behavior. Pretty common, unfortunately. The real reason to install solar is because it's what we need to do as a civilization if we want to preserve the environment. Has nothing to do with cost, other than cost potentially being prohibitively expensive for the less well to do.
Power companies should be building solar and other renewable energy power plants much faster than they are. To limit cost to the less fortunate, they could do it on a system where more well to do folks who actually care about the future can pay more to help pay the capital costs of replacing coal with solar or wind. I'd happily pay much more than I currently do for this (maybe up to 3x regular cost; maybe more depending on how truly benevolent power company is being). But power companies aren't doing that either. As a result, my only option is to install my own rooftop solar, and I intend (have budgeted) to do that early next year. In classic human short sighted behavior, even this will be a fight because my HOA will say it "doesn't look good", no matter the future of humanity or anything. I may end up having to wait and install solar shingles without the federal tax credit, which will be WAY more expensive, but I'll do it if I have to. Because I have the money and I'm not a selfish ignorant prick.
Power companies should be building solar and other renewable energy power plants much faster than they are. To limit cost to the less fortunate, they could do it on a system where more well to do folks who actually care about the future can pay more to help pay the capital costs of replacing coal with solar or wind. I'd happily pay much more than I currently do for this (maybe up to 3x regular cost; maybe more depending on how truly benevolent power company is being). But power companies aren't doing that either. As a result, my only option is to install my own rooftop solar, and I intend (have budgeted) to do that early next year. In classic human short sighted behavior, even this will be a fight because my HOA will say it "doesn't look good", no matter the future of humanity or anything. I may end up having to wait and install solar shingles without the federal tax credit, which will be WAY more expensive, but I'll do it if I have to. Because I have the money and I'm not a selfish ignorant prick.
I understand that and it is the reason for my post, if Sun Power goes under I wonder who in the solar industry will survive.
Skotty
2014 S P85 | 2023 F-150L
I wouldn't be surprised if China was intentionally trying to kill off other solar manufacturers to monopolize this important market. And it's almost hard to complain, as cheap solar is important. I know Republicans hate subsidies, but in this limited case, I think the US should really be subsidizing solar power more. It's important to the future security and stability of the country. Subsidize the buyers, or subsidize the manufacturers, or subsidize the power companies by funding new solar power plants. Any or all would help.
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