Report finds high level of competition among U.S. residential solar installers

Online solar marketplace EnergySage has released the results of its first nationwide survey of U.S. solar installers, which found nearly half of small-to-mid-sized solar installers face more than 20 competitors in their service areas.

The survey, which did not include results from industry leader SolarCity or other large installers, reported a median response of 15 competitors. Additionally, the report found that price competition was the largest barrier to closing sales, with 44% of respondents listing this as a top challenge.

This saturation appears to be despite a smaller number of new companies. Among the 103 installers surveyed, most began installing residential solar in 2005-2010, and none began in 2014. This is likely due to the previously scheduled expiration of the U.S. Investment Tax Credit, which has since been extended through 2019 with a phase-down thereafter.

And with this diversity of installers, customers appear to be becoming more savvy. 88% of installers said that their customers see two or three quotes before making a decision.

For these installers, cash sales remain the dominant form of business, and over 50% do not offer a lease or power purchase agreement (PPA) product. This is in sharp contrast to national trends, as 60% of residential solar is sold through lease or PPA arrangements. These third-party-owned solutions have been championed by the largest solar installers, including SolarCity and Sunrun.

In addition to cash sales, unsecured loans were also popular. Two in five installers estimated that over 25% of their customers utilize unsecured loans.

Finally, despite the increasing popularity of solar both customer acquisition remains a big issue for installers. While nearly ¾ of respondents said that customer acquisition has become less difficult or remains unchanged, access to more leads was listed as the #1 competitive need going forward.

EnergySage plans to issue another survey to installers in 2016, and publish the results next December.