The Section 201 trade case has injected a lot of uncertainty into America’s solar market. It’s hard to plan with the threat of new tariffs looming. It’s even harder to plan in this political environment.
But the solar industry is used to uncertainty. That’s why so many people call it the “solar coaster.” Beyond trade wars, the industry has routinely dealt with uncertainty around tax credits, the stimulus program, state mandates and incentives, and now, the prospect of a tax reform bill in Congress.
Put simply, solar market volatility is the norm, not the exception in the U.S.
But as the market matures and expands from a few key states to the entire nation, the need for visibility -- particularly around component prices -- is an important antidote to that ever-present volatility.
In residential solar, the Solar Energy Industries Association (SEIA) has developed a customer resource portal -- including tools to help potential solar customers understand the terms and costs of solar leases, PPAs and cash purchases -- that helps homeowners make smart decisions about going solar. And platforms like EnergySage educate solar shoppers and allow them to solicit quotes quickly to calculate savings and payback times.
The desire to increase visibility and establish an industry-wide community also animates EnergyBin, a members-only online business-to-business marketplace that taps the power of software and e-commerce to help counteract volatility.
“With the trade case, what everybody is really worried about is price volatility,” said Doug Westra, EnergyBin’s chief financial officer. “The more platforms I have and places to go to search inventory and new and used products, the more it helps me to flatten out price volatility because I’m not at the mercy of any one manufacturer. And the more places I have to go flatten out price volatility, the better off I am.”
Having a platform like EnergyBin, where installers, EPCs, component manufacturers and other industry stakeholders can buy and sell equipment, helps harness the power of knowledge and information to keep prices down.
In the case of markets, knowledge really is power.
“Visibility gives you access to information and data, which is knowledge,” said Keith Bluford, senior vice president of business development at EnergyBin. “When everybody has access to reliable information, it levels the playing field and creates the disruption we know we need in the industry in order to continue to bring prices down and build out new projects.”
While improved visibility around prices is good for overall market efficiency, it’s particularly beneficial to the many small installers and developers in the American solar industry.
Because of the Section 201 trade case, large developers and installers have had to decide whether to purchase modules and warehouse them for use in future projects, or wait for penalties on imports and hope that the economics still work out. These calculations are not easy to make.
“Do I have to take ownership of the panels now and store them and pay tax in California when I plan on using them on the East Coast?” said Bluford. “Because of the volatility and uncertainty that we have with the trade case, it brings in so many questions you have to deal with.”
But buying and warehousing modules and other project components is not a luxury many smaller installers and developers can afford. EnergyBin’s platform provides an alternative.
“It allows them to stay in the game and play. If they don’t have resources to go out and make equipment purchases and warehouse it for the long term, this gives people a tool to access products that will maintain their project economics,” said Bluford.
It also provides an opportunity for small installers to earn extra money by selling components that they don’t need. “It allows people to find other revenue streams,” said Renee Kuehl, EnergyBin’s director of marketing. “They can become their own brokers if they have extra stock.”
Solar is facing growing pains like other nascent industries, according to EnergyBin’s Westra. It’s important to use as many tools as possible to increase visibility and counteract volatility.
Taking a longer-term view -- like an individual investing for retirement -- is vital now that solar is becoming mainstream, he said.
“You don’t invest for three weeks; you invest for a lifetime. It’s a marathon, and you have to weather the ups and downs,” said Westra. “But I think the perspective has to be that solar is here to stay and it will play an ever-increasing role in energy. It’s important to deal with issues today but also remember that the long-term future of the business is bright.”
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