Author: Ray Davis (Linkedin)
Within the last 3 months OGW Energy Resources had 3 of our newest residential solar customers sign an Agreement with another company before finding their way to us. Their stories and reactions are similar. Statements such as, I’m really surprised I signed so fast with them; They must have caught me in a weak moment; I’m disappointed with myself…. encapsulate the regret of acting too soon without knowing or understanding the details of what they signed up for. In each case the home owners really wanted solar and detailed what can only be described as a high-pressured salesperson essentially telling them that they needed to sign today, that they’re the best and that the return on investment was spectacular. With more and more companies selling solar, what happened to these 3 families is happening everyday across the country. Over the next few months we will provide 3 segments to this blog and examine some issues that everyone should consider. We hope to help the next eager adopter of solar think twice about the installation company they’re considering.
1. Is the company you’re considering a local company?
“Does Local Firm Ownership Matter?” by Stephan Goetz and David Fleming, was a study of locally owned businesses effects on local economic growth, as compared to nonlocal ownership. The study was highlighted in Economic Development Quarterly, April 2011. https://www.researchgate.net/publication/227347753_Does_Local_Firm_Ownership_Matter
Many studies like this one find that local businesses have a stronger money-effect by recirculating a greater share of every dollar in the local economy, as the local firm creates locally owned supply chains and invest in their employees. Several studies have shown that when you buy from an independent, locally-owned business, rather than nationally-owned businesses, significantly more of your money is used to make purchases from other local businesses, service providers, and farms — continuing to strengthen the economic base of the community. The owners of OGW, live, work, play, worship and raise families in Ohio. Working with OGW will strengthen your backyard.
Add in a company’s availability to service your system after the sale and you have compelling reasons to consider an installer near you.
Hear what one of our 2013 solar customers had to say about selecting a local company 5 years after his installation: http://ogwenergyresources.com/residential
2. How long has the company you’re considering been in business and how long have they been installing solar?
Many companies from other industries have started to install solar. Understanding when they started installing solar and the company history can be telling.
If the company is small, asking what would happen if the key person you’re dealing with leaves the company is a must. Here today gone tomorrow is almost the norm in the renewable solar energy industry. Even large utility companies have filed bankruptcy: https://www.chicoer.com/2019/01/30/what-happens-to-californias-solar-and-wind-energy-with-pge-bankruptcy/
To drive the importance of this point home, in Australia, which is a more mature but smaller solar market, nearly 700 solar installers that have filed for bankruptcy. The OGW take is that company stability does not always equate to solar expertise. Company stability and solar expertise is what you’re looking for here.
3. What products / manufacturers are they using?
If another company has quoted solar for a business or family we’re also talking to, often we’re told that they don’t know what solar module or racking was quoted. My Partner, Kevin, poses a great question on this point. When he hears this…. he asks, “Would you spend $40,000 on a car without knowing the make and model?” There is a fallacy in the solar industry that vested parties continue to spread……it’s that all solar modules, racking and inverters are the same and it really doesn’t matter what you use. Since we started our business, my partners and I have argued over and over against this fallacy. Weak manufacturers, unscrupulous installers and distributors all push this narrative because it’s in their vested interest. With more than 100 solar energy companies declaring bankruptcy from 2009-2014 and well over a 1,000 solar manufacturers and installers going bust leaving millions of orphaned businesses and homeowners with no one to go to if there’s an issue; at OGW, we say knowing the module, inverter and racking you are getting is only the starting point.
Are they telling you the product is a tier 1 product?
Tier 1 is a Bloomberg term designated for some solar manufacturers. Installers use this term to suggest that the module comes from a solid company and that the company is bankable. The truth is that and many Tier 1 companies have gone bankrupt. In order to be a Bloomberg Tier 1 module manufacturer you really don’t need to be the very strongest of companies, they only need to provide own-brand, own-manufacture products to six different projects, which have been financed non-recourse by six different (nondevelopment) banks, in the past two years. Learn more here: https://data.bloomberglp.com/bnef/sites/4/2012/12/bnef_2012-12-03_PVModuleTiering.pdf
The OGW point here is that you should not use a Tier 1 manufactured product as validation of a solid company. At OGW we study, take the time to meet with and review the financials of the manufacturing companies we install. As a point of pride, in the near 12 years we’ve been in business, we have never installed a solar module, inverter or racking from a company that went bankrupt.
For years, installers in and around Ohio were installing Schletter, Satcon, Stion, SolarWorld, Suniva ….and so many more companies that have filed for bankruptcy. Go ahead and ask the installer you’re considering how many orphan solar installations does the company have? Meaning, how many times did they SELL the latest and greatest product manufactured by a company that eventually went bankrupt.
In the months to come we will provide two more parts to this blog post to examine more questions that everyone should consider before making their solar purchase. Do you have a question or experience you want to share with us, just let us know.