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Published on March 30th, 2013 | by Guest Contributor


Solar Companies Ripe To Add Energy Efficiency Focus?

March 30th, 2013 by  

Reposted from Greentech Media (with permission):

By Stephen Lacey

Residential solar companies have a unique opportunity to engage the energy efficiency market. Because a contractor is already talking to an energy-conscious consumer, a conversation about simple efficiency retrofits is a natural next step. It also doesn’t make a lot of sense to slap solar panels onto an energy-inefficient house.

Since the solar services behemoth SolarCity moved into energy efficiency services in 2010, people are starting to ask if it represents a broader trend in the market.

Some programs, like the California Solar Initiative, require homeowners to get an energy efficiency audit before applying for solar. And while some solar companies are trying to tap the efficiency market through their existing sales channels, the crossover from solar to efficiency hasn’t happened in a big way. (One notable move was Mid-Atlantic installer Standard Solar, which created an energy efficiency services arm in 2009. It plans to ramp up those services in 2013.)

The folks at SolarNexus, a California-based business management software company, believe that more companies will start offering efficiency services if they have the right sales tools. This week, SolarNexus launched new offerings designed to help contractors manage leads for a whole range of products, including energy efficiency, grey-water management, and electric vehicle charging stations. The company had initially focused on the solar PV and solar thermal market, but is now expanding its software to give small and mid-sized solar contractors a chance to branch out and model new types of services.

“The ability to manage these services in a fast, compelling way — without eroding their solar business — has not been available to the market at large,” said Michael Palmquist, VP of Product Management at SolarNexus. “Now, these contractors can grow their offerings to clients, position themselves in a differentiated way from their competitors, and provide more compelling returns to their clients.”

The software allows contractors to create cost estimates, quotes, manage contracts, and store any other type of documentation on a project. A company like SolarCity has its own internal project management tools for efficiency. The SolarNexus product is designed for the smaller companies that don’t have the same capabilities.

One of SolarNexus’ customers, California-based Allterra Solar, started offering energy efficiency services — and then stopped. The company installed 460 kilowatts of solar in 2012 and projects sales at 1 megawatt in 2013. James Allen, CEO of Allterra, said that more than half of the company’s customers are interested in efficiency. But the higher cost of site assessments, learning new rebate programs, and bringing in new skilled labor prevented the company from scaling up.

“We stopped offering it as a service because there was no way to quickly model the savings and sell the job,” said Allen. “With something like this new energy efficiency modeling, we can add some simple efficiency work into our proposal.”

As Allen pointed out, solar companies aren’t necessarily equipped to move deeply into efficiency. The jobs require new skill sets that can drive up overhead costs for projects, thus slimming margins and making projects unattractive. Performing costly, invasive retrofits like insulation replacement or HVAC upgrades typically aren’t the best options for a mid-sized solar company. The easiest option for a mid-level company like Allterra is to offer packages that include lighting, new thermostats, or appliance installation, said Allen.

“For energy-efficiency retrofit work, the full diagnostic test-in requires at least a half day onsite and a day in front of the computer. This makes the site assessment phase for EE [energy efficiency] a major investment for the contractor, and charging $1200 is a major turnoff for your typical homeowner,” he said. “If we help a customer cut their usage by 15 percent through our basic efficiency package, it will make our solar proposal look that much better.”

Allterra already used the SolarNexus software for solar projects. The company reported that the service added about $250,000 in extra revenue in one year due to increased business efficiencies.

For many solar companies, energy efficiency isn’t an integrated part of the sales channel. While an effective installer may try to point a homeowner in the right direction, most companies aren’t set up to do the efficiency upgrades themselves. Michael Palmquist of SolarNexus thinks that new tools to help manage projects can help solar companies modestly expand into the space without much added cost.

“Since most companies are doing so little efficiency, marketing these services is an afterthought. The cost of sale is higher for efficiency alone since there’s more legwork involved in doing a thorough evaluation. Companies that can sell low-intensity EE upgrades along with PV don’t need to put in the extra marketing effort and don’t need to conduct rigorous and time-consuming audits, nor do they experience much in the way of operational differences,” said Palmquist.

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  • DanielPerlaky

    Energy Efficiency is so central that I’m surprised businesses aren’t already more adept at making a clear case to the customer – both in terms of modeling the savings and efficiency gains but in easy access to local incentives as well. We need to focus on empowering the customers to see the benefits of efficiency and solar companies should reinforce that process.

    In our global energy doc, Switch, we cover the topic of efficiency with a number of expert interviews at

    Efficiency is the energy policy everyone can love and it’s a force multiplier on our way to a cleaner energy future.

  • Vinay Kumar

    Energy Efficiency and an investment in Solar energy are two different ball games. Investments in solar energy doesn’t necessarily mean that the owner will have an openness to try his hands in energy efficiency.

  • UKGary

    In the UK, it is now required to have a building energy efficiency audit in order to qualify for solar feed in tariff at the full rate. The building on which the solar array is to be installed must achieve band D or better to qualify.

    As a result of this policy, solar companies are starting to routinely work on energy efficiency as without the ability to help clients bring their buildings up to the required standard, their potential market is significantly reduced.

  • Brian Farhi

    I believe the author meant before applying for solar incentives. The State of California has money available for those that want to go solar, but to receive it the homeowner must have a cursory energy audit conducted. The theory is that by knowing what savings can be obtained with other improvements, a homeowner will be better able to reduce their net energy consumption from the grid beyond what can be achieved by solar alone. But there’s no requirement that a homeowner apply for those funds / have the audit conducted; in fact, many don’t because the incentives are either exhausted in certain parts of the state or because the cost of paperwork filing or project delays outweighs the value of the state incentive.

    However, most photovoltaic systems do require that a permit be pulled with your local Authority Having Jurisdiction. This isn’t much different than for any other type of home upgrade, like electrical or plumbing work. So there is some permission typically required, but it’s relatively consistent with what’s required for other home or building improvements.

  • arne-nl

    “before applying for solar”

    Huh???? Applying for solar?

    I know most Americans see upon Europe as some dreadful overregulated socialist utopia, but at least we are free to install solar panels when we want without asking permission. Would never in my life trade that liberty for a firearm.

    • ha, love that. but how are you going to protect yourself from the multi-trillion-dollar military if it comes for you? 😀

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