Don’t Underestimate the Residential PV Market

I remember early on in my PV career siting on the back deck of a customer’s house discussing a solar project I had recently proposed. It was the first grid-tied PV system I sold, 16 Sharp 165 watt panels and an SMA 2500 (Both products were new to the U.S. market at the time) and my customer received a rebate of $4.50 per watt. I forgot how much I sold the system for, but I recall projects going for around $10 per watt back them. A lot has changed in the US PV industry since 2002. For example, Mid-American buying projects in the hundreds of MW’s from First Solar and turning around to sell bonds backed by the project. Talk about a maturing market…. I also remember the last residential PV system I sold. I sat on the customer’s couch, along with his family pets, while he reviewed my proposal. It was a competitive situation unlike my first sale, but I closed it. I didn’t look back leaving that house knowing I had accepted a new job selling commercial PV projects. So for the last 5 or 6 years I haven’t focused much on the residential market until a recent client gave me reason to take a fresh look.

My consulting firm was retained to help develop a business plan for entering the residential market at a large scale. I have looked closely at the market with fresh eyes and am impressed with what I see.  To start we can look to the Japanese market as an example of the scale to which a strong residential market can achieve. In 2011 well over 1,000 MWs of residential projects were installed representing about 85% of the total PV market in Japan. The U.S. solar market is more diversified than the Japanese market as commercial and utility scale projects dominate the market.

The U.S. residential market will log about 400 MW this year and historically has experienced less volitility than the commercial market. In addition to the relative consistency, the residential market maintains a broader incentive structure across the country. I expect the consistency will continue as residential electric tariffs represent the highest rates and will require less local subsidies than commercial rebate programs.  Factoring in the increasing number of finance companies focused on the residential market and specialized equipment such as AC modules with integrated racking, the residential market looks to be a strong segment. This technology approach of modular and scalable will make smaller systems more viable while lowering the bar for qualified installers therefore making solar within the reach of the masses.

Truth In Solar,

Nathan Booth

 

Endeavor

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