This is the fifth and last of a series of posts about the CSI data. Please check here for the original posts with some background about the data.
This last chart shows the average cost of install per kW for the top 10 installers in 2011 for residential installs only. There are some interesting take-aways in this data. First, buyers need to be careful when picking who they are working with. There are clearly companies out there that charge well above the market average. I certainly don't like bashing competitors in the industry. We all know how hard it is to build a profitable business in the solar space. However, when companies charge 50-100% above a competitive price, they need to be called out. Headlines like "Solar company rips off customers" will hurt the whole industry. It's still a riddle to me how Galkos Construction (aka GCI Energy) can get away with it.
Another interesting observation from the data is that some of the established players in the market like Sungevity and SolarCity also have relatively high average prices ($8-9/kW). That seems to be contradicting our knowledge of the market place where these two companies are very competitive in their pricing to consumers. The reasons could be that the data reported to CSI by those companies is really the transfer pricing that's used to capture the 30% cash grant/ITC. The higher the transfer pricing, the more can these companies get from the government to subsidize their installs and pass the benefit on to their customers through lower leasing costs. The problem with this practice is that the transfer pricing rules are not well established and everyone has their own interpretation of what a reasonable price is for the discounted future cash flows of the revenue stream from a third party financed install. Without clearly established rules from the government agencies, different financing providers will always interpret the vague guidelines differently and therefore distort the market. The status quo promotes aggressive transfer pricing practices that could quickly throw third party financing into the line of fire.
This last chart shows the average cost of install per kW for the top 10 installers in 2011 for residential installs only. There are some interesting take-aways in this data. First, buyers need to be careful when picking who they are working with. There are clearly companies out there that charge well above the market average. I certainly don't like bashing competitors in the industry. We all know how hard it is to build a profitable business in the solar space. However, when companies charge 50-100% above a competitive price, they need to be called out. Headlines like "Solar company rips off customers" will hurt the whole industry. It's still a riddle to me how Galkos Construction (aka GCI Energy) can get away with it.
Another interesting observation from the data is that some of the established players in the market like Sungevity and SolarCity also have relatively high average prices ($8-9/kW). That seems to be contradicting our knowledge of the market place where these two companies are very competitive in their pricing to consumers. The reasons could be that the data reported to CSI by those companies is really the transfer pricing that's used to capture the 30% cash grant/ITC. The higher the transfer pricing, the more can these companies get from the government to subsidize their installs and pass the benefit on to their customers through lower leasing costs. The problem with this practice is that the transfer pricing rules are not well established and everyone has their own interpretation of what a reasonable price is for the discounted future cash flows of the revenue stream from a third party financed install. Without clearly established rules from the government agencies, different financing providers will always interpret the vague guidelines differently and therefore distort the market. The status quo promotes aggressive transfer pricing practices that could quickly throw third party financing into the line of fire.
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