Trends in Solar: Q&A with CEO of Sunhub


The solar industry has seen some dramatic shifts recently due to changing market conditions, new government regulations, and economic changes. As a solar trading platform, Sunhub is in the unique position of having contacts that contribute to every aspect of the solar value chain. To better understand trends in solar and the factors affecting the market, Sunhub surveyed module manufacturers, distributors, regional solar companies, commercial installers, and engineering EPCs to see what they are seeing in the solar industry. CEO and co-founder Mitch Bihuniak discusses trends in solar and what they learned in their survey in this Q&A with Solar Builder.

SB: What notable regional and national trends have you noticed within the solar industry that you believe are significant and demand attention?

Bihuniak: Our sources tell us that the commercial real estate market is still recovering from the COVID pandemic and is actively looking to cut costs, which is good news for commercial and industrial solar providers. At the same time, distributors report a contraction among larger solar installers, so expect to see more local installers prospering since they have lower overhead costs.

In terms of components, commoditization is an ongoing trend which is eroding sales of products such as premium panels. Project managers are also seeing longer lead times for components such as transformers, switchgear, and reclosers.

One of the biggest factors affecting solar in California the new net metering program, NEM 3.0, which reduces net metering credits. NEM 3.0 went into effect in April 2023, leading to a shift to add more solar energy storage. California is still the biggest solar market in the U.S., installing more solar capacity than any other state, so this trend is worth watching.

The increase in interest rates has also had an impact on home improvement loans for solar installations, which has led to new leasing and Power Purchase Agreements (PPAs). Consumers interested in solar are looking for new financial options.

Mitch Bihuniak
Mitch Bihuniak

SB: What positive developments do you expect to see in the solar industry?

Bihuniak: Our panel of experts points to changes in market conditions are proving to be generally positive for the solar industry. The slowdown in the market has led to lower demand and reduced product costs, which is good for customers. To stay ahead, installers are focused on making their businesses more efficient. One of our module manufacturing sources notes that “authentic integrators” are emerging as the winners in the current market. Available incentives are also driving small and mid-size commercial installations. Battery storage is also more affordable and driven by factors such as NEM 3.0.

SB: How do you anticipate trade policies will reshape the solar industry?

Bihuniak: Our panelists hope that 2024 will bring some clarity to issues related to trade policies. New government funding and bipartisan support for more manufacturing jobs will increase domestic solar manufacturing, but changes won’t happen overnight.

There is still a shortfall in the supply chain for PV components, so the current challenge is promoting domestic manufacturing while balancing the availability of cheaper components from overseas to keep the solar industry growing. Our experts also noted that investment tax credits and clean energy incentives in the new Inflation Reduction Act (IRA) should cut logistics costs and improve ROI.

SB: What are your main challenges when managing and purchasing inventory?

Bihuniak: When asked about the top three challenges solar professionals face when it comes to inventory, we received a range of responses, but there are common themes:

  • Price is always a factor. Module prices are dropping due to a surplus, and moving inventory fast enough to remain profitable is becoming a challenge. While some cite inventory shortages for components as an ongoing problem, others point to overproduction in Asia as reducing profits and slowing innovation.
  • Stocking inventory is also creating some issues. Changes in technology, such as the introduction of higher wattage modules, make it difficult to determine what installers want and what to stock, and high volumes of older stock make it more difficult to introduce the latest products. Distributors also want to be able to balance their inventory across strategic stocking locations.

SB: What essential qualities or criteria do you prioritize when selecting a procurement partner?

Bihuniak: Everyone we talked to referenced supply-chain challenges. To help overcome some of those challenges, our panelists indicated that finding the right suppliers can help solve the problem. Many see finding the best procurement partners as a means to avoid market upheaval.

Everyone said they want reliability and predictability when looking for procurement partners. Of course, they also want competitive pricing, but reputation, experience, and product expertise with good warranties are also essential.

Some surveyed cited a shortage of qualified staff, a lack of inventory, and cash flow as business concerns, so they want to work with partners willing to establish payment terms that align with project milestones. Cost-savings are increasingly becoming more of a priority.

SB: Is there anything we aren’t paying attention to in the solar industry that we should be?

Bihuniak: No one has a crystal ball, but our panel of seasoned solar executives has been in the business long enough to recognize trouble on the horizon. One issue is the lack of a skilled labor force. There is a shortage of young, talented installers and professionals to develop new solar and EV technologies. With the aging U.S. labor pool, there could be a real labor shortage in the near future.

The solar industry may also face competition from emerging technologies like small modular nuclear reactors and other energy generation and storage innovations. Solar isn’t the only option when it comes to sustainable energy.

Overall, there is continued optimism about the solar industry as costs drop, capacity increases, and sustainable energy solutions increasingly eclipse fossil fuels. There are still concerns about the supply chain, parts availability, and regulatory changes disrupting solar success. Still, our panel of experts continues to be bullish about prospects for the solar industry. Market innovations, including new procurement strategies like new solar trading platforms, will help shape the solar industry in 2024.

Mitch Bihuniak is a co-founder and CEO of Sunhub, a B2B e-commerce marketplace & distribution platform for solar and renewable energy equipment and components.

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