Inflation Reduction Act outlook and product trends to watch | Power Forward!

Power Forward IRA episode still

David Dunlap and Scott Snyder from BayWa r.e. join Power Forward! this week to discuss impactful aspects of the Inflation Reduction Act (IRA) for solar installers, to highlight new partnerships, and to preview some standout events at the 2022 RE+ conference in Anaheim (Sept. 19-21).

Check out the whole episode for yourself right here. Below is part of our chat about the IRA and some upcoming products and trends for solar installers to think about.

David, what do you see as the primary pieces of the IRA for the solar industry, and how will they be impacting your business and the businesses of the solar installers you work with?

Dunlap: For really for the first time, it’s a great combination of incentives and rewards across the spectrum of our industry and of course even beyond our industry. There’s incentives in here for the electrical vehicle market, there’s incentives for HVAC and all manner of energy efficiency.

We finally have some real longer term stability in terms of the rewards for the homeowner. This shores up the long-term demand, and that’s really around the extension of the ITC. It’s going to morph and change over time, but having a predictable steady return to the 30 percent rebate ongoing for a decade — that’s powerful. Then really for the first time there’s ways to increase that. There’s an extra 10 percent for domestic content, there’s an extra 10 for a number of other categories.

That does a lot to increase confidence and ensure that we’ve got long-term demand, but I think equally as important is we’ve got these really meaningful carrots and incentives for domestic manufacturing which helps on the supply side. It’s a little bit frustrating that it’s going to take a while for that supply to start really ramping up, but there’s certainty around it now. For years, particularly the PV manufacturers have been wanting to invest in the U.S., build factories get the labor force to heat up, and there hasn’t been that assurance that incentives will be there. We’ve had the sticks on the on the import side, keeping some of the foreign products out that we thought were problematic, but now we’ve got the incentives to say domestic manufacturing is where we want our dollars to be.

I think over the next six months we’re going to hear a lot of news about where that investment is going and start to figure out what the timeline is to see the benefits of it. My gut check is we’re going to start having some real benefit toward the end of 2023, and 2024 is going to be huge in terms of when we actually see that influx of new supply.

What is BayWa r.e. looking forward to doing the most? Are you looking to make any changes potentially? To structure things differently knowing what’s in the bill and what things might look like going forward?

Dunlap: A little bit, yes. What we’re not going to change is that we still want to focus our partnerships on the best value and the best resiliency in terms of supporting our residential and commercial contractors. So, understanding how that landscape is going to change, which of the big players are shifting around, who’s going to be making those U.S. investments — we want to forge those relationships. So, yes, there might be some changes to the line card, but I think primarily it’s still the same philosophy.

Aside from the waves of the IRA, BayWa r.e. is making its own waves, recently announcing partnerships with several leading solar equipment brands. Could you give us a quick overview of all the news?

Dunlap: We’ve made this year a lot of strategic choices around some new partnerships that we think will have long-term benefits.

PV Pallet is a great one to highlight because they’re doing great things in sustainability and waste reduction. This is a recycled and recyclable pallet for PV modules that decreases the chance of damage dramatically while modules are in transit. It’s a very useful tool for staging projects on the site. An installer can spend more time with their labor installing product and less time holding it when they break down a pallet, and it’s really valuable for decommissioning and re-roofing projects where you take the installed modules off the roof.

Another exciting one is Duracell Power Center. Duracell obviously is a household brand name, and they’re entering the space in a whole home system approach. We’re starting with the storage products but they’re adding microinverters, EV charging. Being able to have a complete PV plus storage offering from a brand like Duracell is super exciting.

We’ve got a number of partners that we’ve been working with prior to the Beacon acquisition that I want to highlight. Roof Tech we’ve had a long-standing partnership with and we’re expanding our partnership to a national representation of the brand. We’re really excited to take that beyond a local Northeastern relationship to a real national level partnership.

Another great one Span io. This is a smart load control panel that’s getting a lot of attention and press, and they’ve got a connected EV charger that goes along with that. It’s really I think a cornerstone product around the integration of PV plus storage and energy management.

We have been expanding into the EV charging space, and we’ve announced a few, but there’s more coming. That’s an exciting sort of side piece. It’s not in the core part of the solar installer equipment lineup but it’s solar adjacent.

Absolutely. I want to stick on that for a second. We’ve been writing about that trend as well, transitioning from just solar to thinking more about home energy in total. What trends are you seeing in the market that you’d like to share there?

Dunlap: Yes, I’m seeing some trends in terms of the interest and the conversation, but it’s more like we’re all kind of identifying this energy management space as the opportunity and we’re formulating it. … I think it’s a smart move for an installer to consider multiple revenue streams in their model, and with all the supply chain challenges we’ve had, if the one thing you do is starting to be a little bit more challenging to hit 100 percent of your goals, what’s another 10 percent thing that you can do as a buffer.

And then if you find that you’re really good at it and you have some success, build a strategy around that. I’m not advocating people go really broad with what they do. I think it’s important to have a very clear strategy, but I think there are some great opportunities, for those that are savvy, to provide real value and benefit from maybe more than just installing a PV generation system.

For an RE+ 2022 preview, pick up the rest of the conversation right here:

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