Small, Distributed Solar Companies Are Retaking the Industry. Here’s Why
Powerhouse is a solar startup incubator in Oakland. The effort was founded by the industry veterans Emily Kirsch and Danny Kennedy, both of whom have ridden through the many ups and downs of the solar industry over the last decade. Of course, like any good incubator, they needed some swag to share with visiting dignitaries. Given their history in the space, then, it’s no surprise that Emily came up with drink coasters to share, calling them “solar coasters.”
The solar industry’s famous ups and downs are often the result of supply and demand booms and busts, followed by whiplash in the profit margins of module suppliers, project developers and installers. But the solar-coaster ride has some other important implications.
One is playing out in the U.S. residential space right now. While much will be written about a potential decline in the overall solar market this year, the real action will be in residential solar rooftops. Utility and commercial-scale solar will likely see a decline this year. However, residential installations will continue to rise. This is due to nationally diverse demand, continued lower prices, and solar-friendly state policies.
The other big driver keeping residential solar on the upward track is the growing simplicity of financing. Over the last decade, companies like SolarCity, Vivint and Sunrun have helped bring solar within reach for millions of Americans with the innovations of tax-equity-based power-purchase agreements (PPAs). Primarily because of the need to aggregate very large amounts of tax equity, these new third-party ownership models favored larger, consolidated companies such as those mentioned above. Read more…