For solar power to become a truly affordable option for homeowners and commercial properties around the U.S., an infrastructure of installers needs to be built to provide the services needed. Once that is done, the installation process can be streamlined, paperwork will be reduced, and utilities will be able to handle the new distributed power sources going up around the country.
Progress has been taking place at a slow and steady pace in recent years, but it may begin to accelerate now that module costs have fallen to new record lows.
Compacting a fragmented market
Right now, there are thousands of tiny companies involved in the installation of solar power. According to GTM Research, the largest three residential solar installers control just 44% of the market nationwide. And most of that is condensed in a few states like California and Arizona.
The biggest residential solar installer, Solar City, commands just 14% of the market, but like others has used acquisitions to expand its presence in recent years. As these installers begin to compete on a larger stage the pressure and ability to reduce costs will increase, leading to lower costs for consumers. So will the awareness of solar power as an option for customers.
On the manufacturer side, this will mean larger purchases from installers and a smaller set of preferred suppliers. In Hawaii, where solar has already reached grid parity, some solar installers are touting high-efficiency modules as a way to get the most bang for their solar dollar.
RevoluSun is reportedly the first company to offer SunPower's
Solar leases play a big role
Banks are also beginning to play a big role in the expansion of solar in the U.S. Wells Fargo
Solar leases from companies like SunRun and SolarCity are making it easier and more affordable to bring solar to the masses.
What to do about it
Without a national standard for how homeowners and commercial properties will be paid for solar power, the role of the solar installer increases. Expanded residential installations will also put increased importance on efficiency. Since the module is less than half of the cost of a residential installation, the power output becomes more important. That gives an advantage to companies focused on efficiency and cutting balance of system costs, like Canadian Solar
Stay on top of solar stocks with My Watchlist. My Watchlist will find all of our Foolish analysis on the stocks you pick and if you sign up for My Fool Daily, our articles about your favorite stocks will come straight to your inbox.