Change usually means opportunity for savvy business owners in every industry. Take the residential solar industry, for example.
This spring, the California Public Utilities Commission restructured net metering in the country’s largest solar market. Under the NEM 3.0 policy, new rooftop solar customers are compensated about 75% less than the rate provided by the previous policy. According to market research firm Wood Mackenzie, the policy will shrink California’s residential solar market and result in a 3% contraction in the U.S. residential solar market. Some industry professionals estimate this figure could be as high as 15-20% in California.
Changes to net metering will undoubtedly have an impact on installers, the business models they’ve relied on to launch and grow their companies, and the customers they serve. “With the ratification of the NEM 3.0 ruling…sending kilowatts through net metering is virtually a net loss to solar-only customers,” explained Nate Otto, president of Hot Purple Energy.
These changes, in California and around the country, are just one more curveball the solar industry must adapt to. Installers everywhere should think about new strategies now to continue growing even as the financial dynamics around solar change.
For most installers, this will require a change to how they do business. “A significant number of installers have prioritized solar-only installations in recent years," said Cody Melamed, regional sales manager for Panasonic Eco Systems. "They were heavily engaged in installing solar panels, as the return on investment for solar energy alone was favorable."
That’s no longer the reality of the solar market. Even as residential solar installations in California are forecast to decline, the demand for batteries will skyrocket.
Evolving business models can help installers and their customers
Reports by the Solar Energy Industries Association (SEIA), Wood Mackenzie and the Energy Storage Association (ESA) project a 35% increase in residential solar but a four-fold uptick in residential battery installations through 2026. Solar installers everywhere will need to diversify their offerings to effectively integrate storage solutions to stand out from their competition — and to better serve their customers.
There’s a big opportunity for installers to offer battery storage that enables homeowners to send solar energy back to the grid at times when they will receive more compensation and ultimately increase their return on investment from solar.
In addition to net-metering perks across the country (better in some states than others), battery storage provides myriad other benefits. These include resilience against power outages, the ability to save money by using stored power during the most expensive times of day and, in some cases, increased grid flexibility. “We have a long-felt belief that storage is a necessary pairing for solar,” said Otto.
On a practical level, that means solar installers need to change how they go to market and how they position themselves with customers. Instead of presenting themselves exclusively as solar experts, installers should be adept at talking about home energy solutions, including storage.
“Change is a constant in the solar market. Energy storage is now mission critical for both growing the market and meeting customers’ needs,” said Bernadette Del Chiaro, executive director of the California Solar & Storage Association (CALSSA).
A superior product — and the expertise to install it
Installers can further differentiate themselves by working with a partner with a legacy of delivering high-quality batteries. Panasonic recently introduced an update to its EVERVOLTⓇHome Battery, a residential lithium-ion battery with a hybrid inverter that connects to either newly installed solar panels or an existing system.
“Panasonic has tons of experience in batteries. It’s one of the things we are most known for,” Melamed said. “We also have a 12-year product and labor warranty to back it up. I think that goes a long way when a homeowner is considering putting something so expensive and important on the side of their house or in their garage.”
Besides leveraging Panasonic’s legacy as a battery pioneer, installers seeking to differentiate with energy storage can emphasize the EVERVOLT’s unique features to their customers. For example, the EVERVOLT home battery is modular, meaning that it’s easy to install and can be expanded from as few as nine kilowatt-hours to 72 kilowatt-hours of storage capacity.
In addition, installers can offer their customers a future-proof approach to full home electrification when they pair EVERVOLT with Panasonic’s SmartBox energy management device. SmartBox controls the connection to the grid and provides a seamless transition to backup power during outages.
SmartBox can incorporate and manage electric vehicle (EV) loads, heat pumps and other important home loads to achieve homeowners’ energy priorities, from energy savings to charging an EV with solar to providing emergency backup power.
Having discussions with customers about their current and future energy needs is another way for professional installers to position themselves as a trusted energy advisor as well as a contractor.
“Most solar contractors aren’t doing electric water heaters. They aren’t doing heat pumps,” Melamed said. “But customers appreciate a contractor who can identify their needs and look out for their best interests to make sure they are prepared for the future.”
Installers partnering with Panasonic get more than a superior product and warranty. “We’re giving installers above and beyond training to make sure they install the product correctly,” Melamed said.
“We want to be on the job site for the first couple of installs to make sure they understand the product and that the installation is done right. We give that service to the installers so that homeowners get the full benefit of solar and storage.”
