Facing a growing drumbeat of faux-populist attacks organized by the investor-owned utilities, a coalition of major players in the solar leasing industry has been announced to offer a coordinated resistance. Resistance is important, but it remains to be seen whether this alliance will actually represent the interests of the solar industry as a whole.
Yesterday we learned (h/t Susan Frank) of the formation of The Alliance for Solar Choice, which described itself thusly:
The nation’s leading rooftop solar companies today announced the formation of The Alliance for Solar Choice (TASC). TASC believes anyone should have the option to switch from utility power to distributed solar power. Founding members represent the majority of the U.S. rooftop solar market and include SolarCity, Sungevity, Sunrun and Verengo.
TASC is committed to protecting the choice for distributed solar. Most immediately, TASC will focus on ensuring the continuation of Net Energy Metering (NEM). Currently in place in 43 states, NEM provides solar consumers with fair credit for the energy they put back on the grid, which utilities then sell to other customers. In simple terms, NEM is like rollover minutes on your cell phone bill. Monopoly utilities are trying to eliminate NEM to halt the consumer-driven popularity of rooftop solar, which is helping create thousands of local jobs around the country.
The website is bare-bones in the extreme - the only information to be found is the single press release. No links to other supporters, not even a list of member companies beyond the four mentioned. (There is a link to their Twitter page - with the somewhat unfortunately chosen “TASC_master” handle.)
Now there are literally thousands of solar companies across the country who are threatened by the push by utilities to roll back or eliminate net metering. Why aren’t any of them included in this “alliance"? How about a little outreach to the little guys, eh? For the moment we will suspend further judgment as we wait to see how this nascent alliance conducts itself. Certainly having well-financed entities engaging in serious lobbying efforts could be a powerful countervailing force in the battles ahead. Time will tell.
As SolarCity prepares to release its financial statement for the first quarter of 2013 next Monday, we came across a couple of interesting items - actually one is interesting the other is more sickening - about litigation involving SolarCity. The first of these was discussed in their last filing - it will be interesting to see how the second is treated in Monday’s.
We wrote back in February 2012 about a lawsuit filed against SolarCity by SunPower. In that suit SunPower alleged that a number of its former employees were hired by SolarCity and that they took SunPower’s trade secrets to their new employer. In addition to naming SolarCity as a Defendant, SunPower also sued the former employees, including Tom Leyden. According to the Complaint:
35. LEYDEN connected at least three personal USB storage devices within days of leaving SUNPOWER. At least one of these devices was a portable external hard drive with 2 terabytes of storage capacity.
36. The forensic evidence indicated that LEYDEN copied at least thousands of files containing SUNPOWER confidential information and non-confidential proprietary information to these devices. These files included hundreds of quotes, proposals, and contracts, as well as files containing market analysis, forecast analysis, and business analysis.
37. LEYDEN also copied highly confidential data from the SUNPOWER database on www.salesforce.com. This data included information about major SUNPOWER customers accounting for over $100 million of sales throughout 201 I. The data also contained the name of the SUNPOWER employee that was responsible for these major sales. SUNPOWER is informed and believes, and thereon alleges, that this information allowed LEYDEN to recruit SunPower employees, including [others].
We wrote at the time that this sounded like pretty damning evidence against the individual defendants, but far less clear the degree to which SolarCity was liable, if at all.
SolarCity’s 10K, filed in March, in the section concerning Legal Proceedings, provides the conclusion to this saga:
On February 13, 2012, SunPower Corporation filed an action in the United States District Court for the Northern District of California (Civil Action No. 12-00694). The complaint asserts 12 causes of action against six defendants: SolarCity, Thomas Leyden, [others], although only the following six causes of action are asserted against SolarCity: trade secret misappropriation; conversion; trespass to chattels; interference with prospective business advantage; unfair competition; and statutory unfair competition.
Each of Messrs. Leyden, [others], or the Individual Defendants, are former SunPower employees, and at the time SunPower filed the complaint, each was a SolarCity employee…
In September 2011, we hired Mr. Leyden as our vice president of commercial sales; subsequently, his title was changed to vice president, project development. Mr. Leyden’s employment with us ceased on March 2, 2012.
The parties reached a confidential agreement to settle the action on December 31, 2012, and the lawsuit was dismissed with prejudice on January 28, 2013. The terms and amount of the settlement are not material to the Company’s financial position or results of operation.
(SolarCity 10K, filed March 27, 2013 at 36-37; emphasis added.)
Interestingly, while it is easy to find a SolarCity press release announcing Mr. Leyden’s hiring in September 2011, his subseqent departure - less than three weeks after the SunPower suit was filed - appears to have gone unreported. As for the lawsuit itself, it dragged on for nine more months - until shortly after SolarCity’s IPO on December 13, 2012.
So much for the interesting update. The far more troubling story appears in today’s Wall Street Journal under the title: Solar Installer Sues for U.S. Grant Funds. While we had written before about how the U.S. Treasury was investigating SolarCity’s accounting practices - particularly as to how it was valuing its leased systems for purpose of claiming federal tax benefits - this was the first that we had heard that SolarCity had filed a suit of its own, claiming that the grant payments that it had received were not big enough!
Wow! Proof of the old adage that the best defense is a good offense. Let it never be said that the folks running SolarCity - and their lawyers - are timid. Confronted with an existential threat to their business model - a well deserved threat in the eyes of some observers - SolarCity is turning the tables and suing to get even more money from the Treasury.
Curiously, there is no press release regarding this lawsuit to be found on the SolarCity website. But there can be no dispute that the outcome of this suit - as opposed to the hushed-up settlement with SunPower - is material to the Company’s ongoing operations. As we reported last October, in its IPO filing SolarCity acknowledged as much, saying:
If it [i.e., the U.S. Treasury] were successful in asserting this action [i.e., that SolarCity was overstating the value of its systems], we could then be required to pay damages and penalties for any funds received based on such misrepresentations (which, in turn, could require us to make indemnity payments to certain of our fund investors). Such consequences could have a material adverse effect on our business, liquidity, financial condition and prospects.
This means that Monday’s filing of quarterly financial results will have to comment on this litigation and it will be interesting to see if the subsequent investor conference call extracts more information from management. Should make for an interesting news day.
Technology reporter Felicity Carus of the (Manchester, UK) Guardian newspaper has a new article up on PVTech that features an extended interview with Run on Sun Founder & CEO, Jim Jenal:
For all your CSI data crunching needs, let me introduce readers to Jim Jenal, the founder and Chief Executive of Run on Sun, a small Pasadena-based solar installer … Jenal was a litigation attorney for 13 years after graduating with a BA in mathematics and a masters in computer science. He may not practise the law any longer, but his inner data geek is alive and kicking, particularly when it comes to CSI data, which he has analysed extensively in his blog.
If anyone can point me in the direction of equivalent data analysis for the CSI or other programmes in California’s solar industry, I would love to hear from you.
Carus went on to discuss our results from the Outliers & Oddities posts (which looked at some of the less savory activities in the solar industry) and ended with this quote:
Jenal thinks those in the solar industry should be good citizens. “I actually think that we’re supposed to be different. I understand those who maximise their profits. I understand that it’s much of the way the world works. But I don’t think the solar industry, which is about sustainability, should operate that way. It offends me and my sense of justice.
We would also note that it violates not just our Founder’s sense of justice, but also the Solar Bill of Rights, promulgated by the Solar Energy Industry Association (SEIA), which declares: “ Americans have the right, and should expect, the highest ethical treatment from the solar industry.“
We are thankful, on this Thanksgiving eve, for the overwhelming majority of honest, ethical players in the solar industry who collectively do make us “different". But we still have an obligation to not only behave ethically ourselves, but to call out those few who aren’t.
Happy Thanksgiving, everyone!
This is it - time to name names and find out which solar companies are the good, the bad, and - if not ugly, at least Outliers and Oddities!
In Part 1 of this series we laid out our data methodology and showed some of the general trends in the costs of solar power systems in Southern California Edison (SCE) territory for the first half of this year. Part 2 built on that to determine Who was Hot and Who was Not - and of course, being identified as Not Hot is certain to generate a lot more consternation than the other way around!
Now in Part 3 we turn our attention to some curious things that we have found in the data: Outliers who are charging way beyond any reasonable amount compared to their peers, or taking interminably long to complete projects, and Oddities - curious trends that defy easy explanations but raise questions about the State of Solar in Southern California.
Last year when we analyzed this data, we discovered that there was one company that really stood out for being a bad actor when it came to over-charging on solar power systems. That company was Galkos Construction, coming in at a staggering $13.32/Watt compared to an average of $8.91/Watt, nearly 50% above the average. (We also noted that HelioPower, Inc. was the lowest in our analysis, coming in at just $6.56/Watt or 27% below the average.) What will we discover in this year’s data?
First a reminder of how this analysis works. Our focus is on systems in the residential market segment since that is the bulk of sales and also where consumers are at greater risk of being pressured into a high-priced sale. (If you are installing a 500kW solar farm and you don’t do your homework, we have somewhat less sympathy for your plight.) Moreover, since the residential segment in the CSI data is limited to systems between 1 and 10kW, there is not as much size difference to skew the pricing data. We excluded systems that were “delisted” so only completed or pending projects are counted. We included, as we did last year, both cash sales and leased systems (although that data has gotten more interesting as we will see later) to capture as many data points as possible. That subset of our data accounts for 8,977 systems with an average system price of $7.23/Watt (CSI Rating).
Finally, since we really only wanted to look at the behavior of the biggest players, we limited our analysis to only those companies with over 500kW of residential projects in the data. As a result, no company had fewer than 80 projects on our list, and the largest had nearly 1,800! These are big players indeed, and they should be able to demand tremendous pricing for their components - but do they pass those savings on to their customers? When we apply this restriction to the data, our sample size is reduced to 6,095 systems (68%) with an average system price of $7.38/Watt - roughly 2% higher than the overall average! Here are our results:
The bulk of our companies here, 9 out of 15, come in below the overall average for this group. And once again, our friends over at HelioPower came in with the lowest system price at just $5.85/Watt. Nicely done, for the second year in a row! (Full disclosure - while none of our projects were in SCE territory during this period, our system price for the first half of 2012 was just $5.33/Watt.)
While down significantly from the stratospheric heights of last year, three companies continue to soar past the $10/Watt threshold: Future Energy Corporation, American Solar Direct, and just like last year, Galkos Construction, Inc. Each of these companies is $3/Watt above the average for the residential market segment. To what can we attribute these crazy prices? Future Energy and Galkos use Enphase micro-inverters (but so do we, and our prices are approximately 1/2 of theirs) and in any event, American Solar Direct uses SMA exclusively, so inverter price is not driving these costs. What about panel choices? No insight there, either: Future Energy uses SunPower, but American Solar Direct uses REC and Galkos uses Sharp (and each uses that brand over 90% of the time). And they each bought a lot of panels: Future Energy bought 3,091, American Solar Direct bought 6,329 and Galkos bought 7,759. Surely that much purchasing power can demand tremendous cost reductions to these companies. Equipment choices are simply not driving these prices.
The CSI program has talked about cost caps for a long time, and in the latest published CSI Handbook (from December 2011) we find this provision:
3.4.5 Limitations on Installed Cost
One of the goals of the CSI program is to support a reduction in PV system costs over time as defined by:
Total Project Cost ($)CEC-AC (Watts) = $/Watt
It is the intent of this program to make steps towards this goal. Projects applying and installing PV systems through this program should have their installed cost fall within a reasonable limit. The current average system cost of PV systems ranges from $7.36 to $8.41 per CEC-AC watt, fully installed. To ensure that the integrity of the program is maintained, the Program Administrators may require documentation for why system costs exceed the lower of either of the following:
- $10.26/Watt; and/or
- One standard deviations above the average cost per watt of all projects reaching Pending Payment Status within the last 12 months, whichever is less. (NOTE: As of 8/31/2011, the defined reasonable limit was $10.26 CEC-AC watt, but this value changes as costs decrease. The current limit is available at www.CaliforniaSolarStatistics.ca.gov)
Now this cost calculation is somewhere between the number we are using (which includes the design factor) and the nameplate cost (which is what solar companies typically report because it is the lowest and it also masks differences in equipment value). What would happen if we were to re-jigger our cost values for our three Outliers to present their system costs as defined by the CSI Handbook’s Cost Cap section? Here are the results:
What do you know about that? Future Energy’s average price is exactly at the limit stated in the CSI Handbook to avoid scrutiny by the Program Administrator! What a coincidence! To be sure, all three of these companies exceeded the $10.26 threshold: Future Energy (99 out of 171 times, 58%), American Solar Direct (68 out of 291, 23%), and Galkos (170 out of 482, 35%).
What to make of that? For one thing, it shows that Cost Caps work - despite being dollars above the average cost of their peers, they each managed to at least have their average value remain under the cap. For another, perhaps it would be useful if CSI published those companies that routinely exceed the Cost Cap in a given period? If nothing else, it would help put consumers on notice in ways that they presently are not (unless, of course, they are reading this blog).
We would love to hear from Future Energy, American Solar Direct or Galkos, and we will be happy to print their explanations for these prices unedited, and in full. (Of course, those responses are subject to further analysis.)
Another type of outlier is the large solar company who signs a contract and then disappears for months on end while the customer waits, and waits, and waits (cue the Casablanca soundtrack). For our same set of big time players, we decided to rank order them by the average time to go from the first filing of a rebate reservation request to the first completion date. While there are lots of reasons for any one project to get delayed, for companies like these that install such a huge percentage of all systems, you would expect to see quick and efficient operations that deliver quality systems in short order. Here is what we found:
(Wow - Do-it-Yourself’ers take the longest to get their systems built - who would have guessed? Yet another reason why solar is not a DIY project!)
Now isn’t this interesting - Future Energy has the shortest time to install of all of these companies, taking roughly half the time to complete a project as its nearest competitor. Maybe Future Energy customers are getting something for all of that extra money! (Although a little research might reveal some cheaper, faster options…)
The average - which most of these companies cluster closely around - is still in excess of five months, far longer than most solar customers expect to wait. But two companies - Petersen-Dean and SolarCity - have delays in excess of 7 months! Perhaps being a huge company, like SolarCity, makes it harder to be responsive, but what is Petersen-Dean’s excuse? They have 257 systems in this sample (compared to the 1,108 for SolarCity), not that many more than the 171 of our speediest company, Future Energy, and nowhere near the number of systems for Verengo which is actually doing better than the overall average at a delay of 134 days.
This got us to thinking - if we take the average number of days to complete as our benchmark, some companies will be working better and some worse than that average. In other words, some companies are insuring that solar systems are installed faster, whereas others are, sadly, causing systems to be installed slower. What is their cumulative impact?
To measure that, we came up with a new metric which we have dubbed the cumulative System-Years of Delay, or SYD (see Notes at end), which is the product of the total number of systems attributed to a company times the difference between the overall average time to complete and the time for this company, divided by 365. Companies that install faster than average under this metric will have a positive value, slower companies will be negative - thus the goal will be to have the largest value possible. Think of this as whether a company is propelling the overall solar industry forward, or dragging it backward. Here are our results (companies clustered around the average have been deleted for clarity):
This is a startling result - the two giants of the industry, Verengo and SolarCity, are at opposite ends of this scale! Verengo, which has 1,791 systems in this subset, averaged 134 days to complete a project, 23 days better than the average for our major players. Thus, it is propelling the installation of solar forward since it handles so many systems faster than average. (Future Energy is way faster still, but has a small impact by comparison because it only installs a tiny fraction of the systems Verengo is handling.) To be sure, Verengo’s 134 days is nothing to brag about, but in this crowd of relative slow-pokes, Verengo is clearly leading the way.
So what can we say about SolarCity? Well, first, they are really slow - taking on average nearly two months (55 days) more than the overall average (of five months) to get a system installed. (As with the fastest company comparison, Petersen-Dean takes substantially longer than SolarCity - 73 days worse than average compared to 55 - but they account for far fewer systems - 257 versus 1,108.) But more importantly, SolarCity’s delays become a real setback for the overall industry given the large number of systems for which they are responsible.
Look at it this way: SolarCity, just in this tiny slice of data, representing just a fraction of their overall industry impact, is responsible for the installation of 1,108 systems representing a total capacity of 5.5 MW of residential solar. Assuming an average of 5 solar hours per day, for every day that SolarCity delays installing these systems, 27.5 MWh of energy is not being produced. Factoring in their 55 day delay beyond the average of their peers means that 1.5 GWh of energy was not produced, and instead, 498 additional tons of greenhouse gases were emitted (see Notes at end). SolarCity’s delays are bad for the solar industry, and bad for the environment.
Which brings us to the Oddities section of this post. One year ago we stirred a bit of controversy by observing that SolarCity’s system prices for leased systems were far higher than what they reported for cash sales. We thought this was odd because there was no similar discrepancy in the data for the other large player in the leasing space, Verengo. So naturally, we needed to revisit that analysis this year and see if that trend was continuing.
Our analysis last year tried to focus on the most recent projects in the data, and so restricted the data set to just include “pending” systems, eliminating those that were installed or delisted. Last year, SolarCity charged $10.06/Watt for its 468 leased systems compared to Verengo which only charged $7.63/Watt for its 482 leased systems.
Here’s what this year’s data reveals:
First some mundane observations: while Verengo has increased its number of pending systems from a year ago by roughly 45% (consistent with the overall growth in this data set from a year ago), SolarCity actually declined by roughly 24% and Verengo now has nearly twice the share of this segment as does SolarCity.
But of course the shocking data point is SolarCity’s cost per Watt - all the way down to $6.61, and now tied (exactly) with Verengo! This is a remarkable development given that the overall downward trend in prices over the past year was far, far more modest than the precipitous drop reported by SolarCity.
We decided to investigate this a bit further. In particular, if the decline in SolarCity’s pricing was simply that they were better able than most to take advantage of lower equipment prices, we would expect to see a gradual decrease over time from last year’s high to this year’s low. To test that hypothesis, we went back to the overall data set and expanded our analysis to look at all California data (i.e., including PG&E and SDG&E data in our analysis). In addition, because we needed to go back to 2011 data, we included completed projects (i.e., “installed” in the data) as well as pending projects. We then aggregated them by month and calculated the month-by-month average system cost from January 2011 to June of 2012. Here’s what the data disclosed:
For thirteen months, from January 2011 through January 2012, SolarCity’s system costs were remarkably stable - at or near $10/Watt. But then something amazing happened and in the space of three short months, SolarCity slashed its prices from $9.74/Watt in January to just $6.60/Watt in April - a drop of more than a dollar a Watt per month! Now our buying power is nothing compared to that of SolarCity, but we certainly didn’t see price declines anything like that!
And then we remembered something else that happened back in late Winter and early Spring (although the memory is a little fuzzy given that we haven’t heard anything more about it since). From Bloomberg.com (April 9, 2012):
Elon Musk, who leads Tesla Motors Inc. (TSLA), said an initial public offering of SolarCity Corp. may occur this year after a review of accounting, with an IPO of Space Exploration Technologies Corp. probable in 2013.
Plans to sell shares in SolarCity, which leases rooftop solar-power systems, won’t advance until “additional clarity on the accounting” for those leases is provided by auditors and the U.S. Securities and Exchange Commission, Musk said in an April 5 interview. Bloomberg reported Feb. 1 that the San Mateo, California-based company was seeking an IPO as early as last month, citing three people with knowledge of the matter.
“There is this question of how do you account for something when it’s a lease,” Musk said. “Not all of them are structured in the same way. We want to just double-check with our auditors and the SEC before we file to make sure the accounting is correct.”
Rumor has it that the SolarCity IPO may have stalled over concerns by the SEC regarding those very accounting practices. If the need to “clarify” its accounting - specifically the manner in which it calculates the fair market value of its leased systems - is what is driving down this pricing it begs the question: Will SolarCity voluntarily revisit the accounting for all of its previously leased systems and refund the excess federal tax credits and depreciation that it has received based on what its present conduct seems to concede was an overstated valuation? Time will tell.
The SYD formula in full looks like this:
Where CountX is the number of systems installed by Company X, AvgInstallDays is the overall average for this group of companies (157 days) and InstallDaysX represents the average number of days to complete an installation for Company X.
Excess greenhouse gas emissions attributable to SolarCity’s delay was calculated as follows: We used the EPA’s eGrid Calculator to estimate the GHG emissions from SCE’s energy production. That figure comes to 659.6 lbs/MWh. We calculated in the article that SolarCity’s delay accounted for 1.5GWh (1.512 GWh to be precise, or 1,512 MWh) of energy not produced by those solar systems during the delay period. That works out to 997,315 lbs of GHG or 498 tons.
In the highly competitive solar marketplace, some companies are thriving while others are withering on the vine. It’s the age old question: Who’s Hot and Who’s Not? In Part 2 of our series on the State of SoCal Solar, we will answer that question, and more!
In Part 1 of this Series we explained our methodology and looked at some overall trends in the data. To identify the players in the SoCal solar marketplace, we extracted the solar panel and inverter data from our CSI data set. (Unfortunately, the CSI data does not include any information regarding racking equipment used on a project.) While the CSI data allows for multiple different panels and inverters to be identified with each project, in reality the overwhelming majority of projects report only one panel or inverter choice. As a result, we will continue our practice from last year and only look at the first choice reported for both solar panels and inverters.
There are two statistics that are meaningful - the total number of panels utilized and the number of projects on which those panels were employed. We excluded “delisted” projects from our analysis and we will further divide the universe of projects by residential or commercial.
In the residential space, there are 97 different panel manufacturers listed, but only 15 of them accounted for more than 1% of the total sales volume of 228,372 panels.
Here are our results for the residential market:
From this analysis it is clear that SunPower and Yingli rule the residential marketplace, combining for 37% of all sales and a comparable share of all projects. New kid on the block, South Korea’s LG Electronics, has jumped out to a very strong start, coming in fifth place behind venerable contenders, Suntech Power and Sharp. Also notable is that Sanyo - a long-time leader thanks to its great efficiency and thermal properties - has nearly fallen off this chart altogether. (Sanyo accounted for just barely 1% of total sales on just 0.8% of all projects.)
Those are the results for the residential market overall, but does it make a difference if you distinguish leased projects from cash purchase? Indeed it does, with only three companies having more than 5% market share in both market segments: SunPower (22.8% purchased, 18% leased), Sharp (16% and 5.3%) and Canadian Solar (9.5% and 6%). LG Electronics sold almost all of its product into the leased systems segment with a market share of 10.7% compared to less than one-half a percent in the purchased segment. Altogether, the purchased market segment accounted for 65,841 panels sold whereas the leased segment dwarfed its older sister with 162,531 panels sold.
The top-five most popular residential solar panel models were: Yingli YL235P (21,098 units), LG Electronics 255S1C (15,970), SunPower 327NE (12,273), Suntech Power 190S (11,488) and SunPower 230E (9,069).
On the commercial side, there are 60 manufacturers listed, of which only 13 accounted for more than 1% of the total sales volume of 350,360 panels. Here are our results from the commercial side:
Suntech has taken over from SunPower the top spot in the rankings, accounting for nearly 21% of the panels installed and it did it with only 7% of the total projects. In contrast, second place finisher, Yingli, had more than twice as many projects - 14.4% of the total - but its market share was only 16.2%. While this select group were the only manufacturers to crack 1% of sales, the remaining manufacturers captured a whopping 28% of all projects.
The top-five most popular commercial solar panel models were: Yingli 230P (43,064 units), Suntech Power 280-24/Vd and /Vb-1 (65,475 - two variants), SunPower 327NE, Trina Solar 230PA05 (21,590) and Trina Solar 225PA05 (17,950).
Analyzing inverter sales is a bit different since many projects have more than one inverter, and in the case of micro-inverters installations, there is one inverter for each solar panel. For our analysis, we will just look at the number of projects with the manufacturer’s product listed as inverter number one.
The CSI data reveals 24 different inverter manufacturers in the residential space, but only 8 of them cracked the 1% market share threshold. Here are our results for the residential market:
SMA is still the leader, with 31% market share but it is losing ground to our favorite inverter manufacturer, Enphase Energy which now finds itself at 21% of the overall residential market. When just leased systems are considered, Enphase falls to number four with just 12.7%, trailing SMA (32.4%), Power-One (21.7%) and SunPower (16.3%).
Buried amidst the 1% that is “other” are some very well known names that appear to have fallen out of favor, such as: Outback Power Systems and Xantrex, as well as newcomers SolarBridge and Enecsys.
When we shift our focus to the commercial segment the number of players drops to just 13, with only 11 cracking the 1% barrier. Here are those results:
This is a very different graph. SatCon Technology has a clear market lead, despite being dogged by rumors of its imminent demise. SMA is second, but most of that is driven by sales of the same, small-scale string inverters that constitute its products in the residential sector. Enphase weighs in at 3.5%, not a bad number considering that large-scale commercial sales are not its forte (although that may be changing).
While our CSI data set potentially allows for more than 2,300 different pairings of inverter and solar panel manufacturers, in reality the number of actual pairings is far smaller, with just five pairings accounting for nearly 48% of all projects. Here are the top five pairs:
SunPower - with its 19% market share pairings - clearly demonstrates the joy of vertical integration and a strong improvement over last year when that combination accounted for just 12.4%. The Enphase-Sharp combination comes in at number 2, but at 8.5% the combination has fallen from 10.3% last year. (Given that the overall market share for Enphase improved from last year, this “decline” really reflects a broader base of installation combinations.) Yingli is well represented as is SMA (which, of course, is the dominant driver behind “SunPower” inverters which are mostly SMA inverters re-branded). Nowhere to be seen in the top five is inverter manufacturer Fronius which last year accounted for two of the top five entries but this year did not exceed 4% in any pairing. Likewise, last year’s panel leader, Suntech, failed to reach the top five this year and Kyocera was also pushed off stage with no pairing exceeding 2%.
Next, as we did last year, we decided to take a look at what pairings are the most, and least, costly, efficient, and ultimately, cost effective. As we noted last year, choosing a second-tier (or third-tier for that matter) solar panel by no means assures you of getting the lowest system cost. In fact, when we looked at the top ten solar panel manufacturers by average cost per CSI AC watt, the results are a bit startling:
None of these are top-tier panels, but they surely are commanding top prices! Keep in mind that our overall average price across all systems (excluding delisted) is just $6.23/Watt and you can see that some seriously overpriced systems were built using these panels.
One measure of panel performance (and the only one that can be teased out of the CSI data) is the ratio of PTC panel rating (meant to more closely reflect real-world conditions) divided by the nameplate panel rating (in STC watts), the higher the ratio the better.
The Sun Energy Engineering panels have a dismal 79.25% rating and the average across all of the panels listed here is under 85%. By contrast, Sanyo panels have an average ratio greater than 89%, ten percent higher than third-tier panels from Sun Energy, yet the systems installed with Sanyo panels averaged $6.84/Watt! (We note with dismay that the entry for Sun Energy panels represents only one system, installed in Malibu - perhaps this was an example of zip-code pricing?)
How do our top pairings rank in terms of dollar per watt? Their numbers are all lower than what we see here, ranging from a high of $8.79/Watt for the average of combinations using REC panels to a low of $6.84/Watt for systems using Yingli panels.
What about efficiency? Which equipment pairings produced the highest and lowest efficiency ratings (as measured by the ratio of CSI Rating divided by Nameplate)? This is a more involved number, since it is not simply a function of efficient equipment (although panel PTC/STC rating and inverter conversion efficiency are both included) but also the specifics of the site - azimuth, tilt, shading and geographic location. Nevertheless, good equipment certainly helps so let’s see where the numbers fall. One additional restriction is required - we will limit this to the residential sector. Why? Because larger commercial projects often using tracking mounts that can have efficiencies greater than 100% and would skew our results away from the panel-inverter pairing.
So with that limitation in mind,the highest combination of panels and inverters in terms of efficiency is First Solar panels (thin film) combined with a Fronius inverter for a 90.51% efficiency score (thanks in part to the thin film panels great PTC to STC rating) while the lowest end is a depressingly low of 68.45% derived from MAGE Solar panels and inverters from SolarEdge. (Not clear if even “power optimizers” can rescue a site with such dismal design characteristics.)
What about our most popular panel-inverter combinations - how did they fare on the efficiency scale? Not surprisingly, the SunPower-SunPower combination is the winner at 84.38%, but four of our five favorite pairs are closely bunched: Yingli-SMA (83.28%), Sharp-Enphase (82.43%), and Yingli-Power-One (82.35%). The lone outlier was REC-SMA which came in at a relatively low 80.11%.
Finally, as we pivot from a pure equipment analysis to one more focused on the practices of the solar installation companies, we wanted to see what the biggest players are using and how does that affect their pricing? Last year we looked at the top five players, but to give us a broader picture this time around we are looking at everyone with 100 or more projects (excluding projects that are delisted). Here are our results:
First a comment or two on who made the top five in this list - SolarCity and Verengo have swapped places, Galkos remains at number three (despite our observations about them last year) but REC Solar and Real Goods have been driven down the chart (to numbers six and twelve respectively) to be replaced by previously uncharted Elite Electric and American Solar Direct. (We will have more to say about all of these folks in Part 3.)
Last year Kyocera was the panel of choice for two of the top five; this year Kyocera did not crack the top fifteen, although it was the second choice for SolarCity. LG Electronics found a niche with Petersen-Dean (and was the second choice for Verengo), while Chinese panel manufacturers dominated the list, capturing five of the fifteen slots. Indeed, the big winner on this list would have to be Yingli, increasing its share of SolarCity’s business from 48% last year to 66% now and pushing aside its countrymate, Suntech, to become the number one choice at Verengo. It will be interesting to see how the ongoing trade dispute and imposed tariffs change these rankings next year.
Power-One gets the big boost this year in terms of inverter choices - elbowing past SMA for the top spot with overall leader, Verengo. But if you want to talk brand loyalty, Enphase is the clear winner - when it cracks the list it is used more than 97% of the time!
Collectively, these fifteen installation companies accounted for two thirds of all the solar projects in our CSI data set - but did that translate into lower prices for their customers? To answer that question - and a whole bunch more - in Part 3 we will turn our attention to Outliers and Oddities to discover the good, the bad and the ugly amongst solar companies. You won’t want to miss it!