Loans on the comeback and six more Solar Industry Survey takeaways

solar industry survey installer

Customer acquisition, financing costs, permitting pitfalls and workforce woes are the top “barriers to success” for solar installation companies, according to the 2024 Solar Industry Survey conducted by SolarReviews in partnership with the North American Board of Certified Energy Practitioners (NABCEP).

“There is so much to learn about the changes in direction and where we go from here after a year filled with great progress but also new challenges to overcome,” said Shawn O’Brien, president and CEO of NABCEP.

The annual SolarReviews survey (conducted Feb. 6 to Feb.10) attracts respondents across the solar industry and from every U.S. state, and covers a wide range of topics. While 56% of respondents said they focus only on residential and small commercial installations, a total of 72% said they do at least some small-scale work. Respondents were mostly associated with smaller solar companies, meaning the results amplify an essential, but often overlooked, voice within the solar industry.

Read the full survey results right here. In this post, we’ll home in on the sales and marketing-related concerns and opportunities — and how those relate back to the top workforce concerns.

Business barriers

Solar installers surveyed named customer acquisition costs the top barrier to success at 39%. Relatedly, 31% say customer acquisition effort and affordability are what they’re most afraid of in 2024.

But it’s tough to acquire customers who aren’t there: 49% said residential demand is down.

Overall, 57% of respondents had no concerns about staying in business vs.18% who were at least somewhat or very concerned about staying in business. But, in between, there is a sizable 20% chunk who said, “it will be difficult, but we will stay in business.”


Related: Watch how to calculate the solar potential of entire block in seconds…


Loans on the comeback?

Higher financing costs continue to hamper residential solar growth, but the Solar Industry Survey responses do indicate signs of life.

  • Increased financing costs were second “barrier to success” at 35% and the top 2024 concern at 35%.
  • 54% of installers say customers were less likely to take a solar loan this past year. That’s a big percentage, but, that percentage is down from last year, when 71% of installers said customers were less likely to take a loan.
  • Meanwhile, 21% say customers were more likely to take a loan (up from just 5% last year). Cash purchases of systems are also up among survey respondents.

Related advice: Selling solar in a high interest environment


Solar Industry Survey says: Module brand power

There’s an uptick in consumer brand awareness in the residential solar market. Brand preference was noted as the No. 2 factor in module selection, only behind performance. In 2023, 29% of customers requested specific solar panel or inverter brands, marking an 11-point increase from the previous year. FYI: Installers named Qcells the top solar module brand this year. Qcells also ranked No. in SolarReviews 2023 module rankings.


Permitting

Third on the barriers to success, at 33%, is permitting and interconnection rules and costs.

Despite accounting for 8% of home solar installation costs, permitting and interconnection are often overlooked challenges for the solar industry. As many as 46% of respondents agree permitting rules are too complicated, and 28% say inconsistent rules between jurisdictions are one of the largest permitting issues. From the report:

“While industry advocates push for the adoption of new programs to expand solar, utilities are equally determined to diminish solar benefit. Some respondents specifically drew attention to rural electric cooperatives for anti-solar efforts, even though their service territories are among those that can benefit the most from solar.”


Related insight: City officials need to stop excessive solar fees

Related insight: The ‘situationship’ of the solar industry and electric utilities


Adding low-income

Expanding into low-income areas because of IRA tax adders:

• Yes 21%
• No, but plan to in 2024 39%
• No and don’t plan to 39%


Workforce or weakforce?

Concerns of building the solar workforce continue to grow, but in the Solar Industry Survey, solar installation companies were less concerned about the lack of skilled labor. The most “prominent weakness” in the workforce today is the “decreased desire to participate in work” at 27% (similar to its 26% in 2022), followed by “higher wage expectations” at 21%.

“Not enough skilled labor” dropped from 40% last year to 19% this year. The biggest increase among “prominent weakness” options was “Industry transience -leaving for a different field,” selected by 10% of respondents vs 3% last year.

I can’t help but read a correlation between the industry transience issue, the “desire” issue, and the “higher wage expectations.”

Solar companies struggle to be profitable — In California, 76% of companies in the Solar Industry Survey say they are concerned about their ability to meet cash flow requirements before the end of Q3 2024, for example. Profitability concerns often lead to paying workers less (especially if they are less qualified to start). Workers who do not feel properly paid will eventually leave for other established industry that pay higher wages. Calling any of those things a “weakness” of a laborer is off target. Those all relate back to the weakness of the solar market (less demand, high customer acquisition costs, etc.), or maybe a solar company’s culture.


Related insight: Notes from NABCEP: How to train and build a resilient solar company


Solar Industry Survey optimistic overall

Despite all the concerns and difficulties, the respondents in this year’s Solar Industry Survey sound more resilient and optimistic. 54% of installers expect to sell more solar in 2024, and 35% of companies expect to grow in the coming year.

“After a tumultuous year of changes in state solar policy and closures of high-profile solar installation companies, it’s more important than ever that we get good data about the state of the industry. We’re proud to partner with NABCEP and hear hundreds of companies’ opinions to provide a snapshot of where the solar industry is in early 2024,” said Andrew Sendy, President of SolarReviews.

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