Does a business owner who needs a new roof on his plant need a ‘Roofing Broker?’ No. Thats ridiculous. Yet, the solar industry is witnessing the rise of third party “Solar Brokers” who match-make installers to projects. In this post we discuss the value they bring, and if they are really necessary.
Life in the solar installation industry. Insiders cheekily refer to it as riding “The Solar Coaster.” Its filled with constant ups and downs – tariffs coming and going, module dumping, changing incentives, the entry of large well-funded installation companies, the exit of those same large companies, sales team turnover, installation team turnover, updated electrical codes, updated building codes, new equipment, finance options and finance vehicles churn… and now we are seeing a realignment in duty segments.
Instead of companies trying to manage sales, construction, and finance, we are seeing a clear emergence of companies focusing on only one of those faculties. David Sugrue put this to words in an excellent retrospective prompted by his being laid off by Spruce Finance:
Enter The “Solar Broker”…
The Solar Broker is a an individual or organization that acts as a 3rd party matchmaker between entities (usually businesses) who want solar and installation companies who can deliver it. They are basically sales entities who convince end customers to work only with them (sometimes via NDA or other vehicle), advertise the impending job to reputable (hopefully) installers, and then select one of them to do the job.
Solar Brokers have primary deliverables including:
1. Generating and handling the RFP (Request for Proposal) process
2. Selecting reputable, capable installers
3. Ensuring the design is reasonable
4. Ensuring the design meets the wishes of the end customer
5. Ensuring the parts selection is up to snuff
But alas, Solar Brokers are middlemen; a relationality that invokes conceptions of parasitism of varying degrees. Even by middlemen dealing with other middlemen.
To be sure, Solar Brokers have their value. End customers typically wind up with the result they want, and the installation company, which gained access to work it previously didn’t have, is typically not unhappy. To the end customer, Solar Brokers look like an effective, albeit outsourced, procurer. To Installation focused organizations that are generally terrible at sales, Solar Brokers look like a complementary, albeit outsourced, sales organization.
But alas, Solar Brokers are STILL middlemen; and they get paid handsomely for it.
Over the last few months, we’ve seen “brokering” fees as high as $0.25/Watt. Thats a lot when you apply relevant framing — for a 200kW flat roof warehouse installation, the following are true:
1. The entire installation should cost roughly $460,000, all told.
2. The Solar Broker’s fee is $50,000.
3. The Solar Broker’s fee is more than double the profit the installer makes.
4. The installer carries almost all of the real risk… running crews, putting labor on the roof, hiring electricians, obtaining permits, hiring consulting electrical and structural engineers, and staffing to coordinate it all. And let’s not forget about paying workers comp and liability insurance.
But alas, Solar Brokers are STILL middlemen — middlemen to the end customer too, not just the installer.
In every case we have dealt with a Solar Broker’s RFP, I can say that the end customer would have received a better price with better service had they come to us (or any other reputable installer) straight away. Period. No ifs, ands, or buts. Sure, the Broker obviates the end customer from the vetting process, I get it. I don’t dispute the place of Solar Brokers in the chain. I dispute their necessity.
Does a business owner who needs a new roof on his plant need a “Roofing Broker?” No. Thats ridiculous. The owner gets some proposals, talks with the roofers, and decides who to go with, by using some form of the following criteria:
1. Has a competitive price.
2. Demonstrates knowledge and experience.
3. Is a business of good standing.
4. Carries the appropriate credentials and licensure.
5. Takes the time to answer all questions in a thorough, direct, and concrete manner.
6. And most importantly, inspires a feeling of trust and ability to deliver.
But alas, middlemen… they aren’t necessary.
I speak with all my heart and time in this industry when I say: there are many reputable and upstanding solar installers out there. We are here, and we are ready to deliver the kind of service customers want. Sure, there are less-than-stellar installers out there, and yes, the industry has seen its share of shady installers come (and mostly go), but finding a good installer does not have to be difficult.
As an industry insider, I feel qualified in delivering this advice for finding a quality installer:
1. For business owners especially: if you are astute enough to run a company, so you are astute enough to find a good installer.
2. Start by finding (Google, of course) a list of local installers. Local installers are the backbone of the solar industry.
3. Check their ratings and online presence. Look for bad reviews, and pay attention to what the gripes are about – sometimes unhappy sentiments can be misdirected.
4. Ask friends/family/business associates for information about local installers, especially if they already have a system. People with solar talk.
5. Check their credentials and licensure. The North American Board of Clean Energy Professionals (nabcep.org) is a great starting point. NABCEP is a certification body with notoriously rigorous criteria, and the NABCEP PV Installation Professional certification is an industry recognized, flagship certification.
6. Schedule a quick meeting with an installer; if you are looking for solar on your business, ask to speak to the owner of the installation company. Ask them about their time in the industry, and challenge the financials of proposals they give you – seek clear no-nonsense explanations. They should do this like its their job. Because it is.
7. Pay attention to the little guy. Its not uncommon for them to be as capable and more knowledgeable than the big guy, and more willing to go the extra mile for you.
Alas, the middleman hath no place when you do these things…
Less cost, better savings, better service. Thats the goal, right?
Solar Solutions for New Jersey, New York, and Eastern Pennsylvania