As the U.S. solar market and solar industry grows, it often follows the paths of other industries. Just like the automobile industry, around the sale of residential solar has sprung up an increasing sophistication of financing products, as loans in particular are becoming tailor-made to a wider range of customer needs and preferences.
Another similarity with many purchases, such as hotels, plane tickets and rental cars, is that consumers are increasingly shopping for solar online, and the 5th Solar Marketplace Intel Report by online solar marketplace EnergySage has provided some data on internet searches which shows support for that trend.
Citing data from Google Trends, EnergySage reports that online searches for terms such as “solar panel installation” “solar panel cost” and “solar companies” have increased over the past three years. Usage of select search terms have increased as much as 60% from H2 2016 to H1 2017, as a period of particularly sharp growth.
Such data backs the rates of growth that EnergySage is reporting. The company says that it is expecting a 125-150% growth in 2017 sales over 2016 volumes, anticipating roughly $1.8 billion in solar installation requests.
But EnergySage is not the only online solar marketplace reporting such growth. Pick My Solar reports that it has averaged 250% growth for each of the past three years, and the company is currently building out an application program interface which will allow its channel partners to host its marketplace, while Pick My Solar does the fulfillment.
This growth is in contrast to the national residential solar market, which has seen slugging growth and even a year-over-year decline in the first quarter of 2017. And while Q1 problems were clearly related to factors in the California market including torrential rains, overall both analysts and solar companies are reporting that customer acquisition has become more challenging as the most eager demographics are exhausted in key markets.
Loans, not leases or PPAs
Online solar marketplaces also appear to be reaching particular portions of the consumer landscape. During the first half of 2017 98% of EnergySage customers chose a direct purchase or loan versus a lease or power purchase agreement, whereas such third-party solar options make up nearly half of the national market.
Some of this may be due to the absence of Tesla/SolarCity and Vivint, the nation’s first and third-largest residential solar companies by market volume, from the EnergySage site. Both Tesla and Vivint rely on third-party arrangements for the majority of their solar sales.
EnergySage’s data also shows the increasing fragmentation of the loan product space, as more companies get involved. More than 2/3 of the installers on the site offer two or more loan products, with no one financing provider taking even 20% of this market. During H1 Service Finance displaced Sungage as the top loan provider on the site, with Dividend Solar and Mosaic coming in second and third.