by Wessel Wessels
Is the solar industry ready to do business in the future? With a background in ICT, I have seen disruption in the industry around ten to fifteen years ago and seen first-hand what happened to companies that didn’t align to the new operating environment in the case of the renewable energy space, moving from products to become a services organisation. I’m already seeing this shift in the renewable energy space, particularly in the solar industry. Here are the signs that change is coming.
Implementation Is Being Commoditised
There are a number of companies that install solar panels, however, they are not necessarily installing the best quality. This is not a sustainable business practice since we are already starting to see best practices implemented, and this will quickly become the standard to which the public will hold solar companies. The more educated customers are on the newly formed standards of the solar industry; the more companies that will not adapt and improve will fall away.
Vendors Are Becoming Competitors
I have noticed in recent times that vendors are competing against the market. This is normal, and it happened in ICT as well while I was still a part of the industry. When this happened in the ICT industry, we had to shift our focus to services and solutions. In other words, you couldn’t rely any more on the margins you make in selling product but rather re-package your solutions to be sold as a service. This is not just an operational change but also needs a different approach in selling.
It’s Not Only About The Product Anymore
The customer didn’t want to simply buy a product any more when this same shift happened in the ICT world. Customers want solutions. Vendors and distributors will not be able to sell and walk away with this customer mindset. You have to not only provide solar panels but a full solar and maintenance service lasting for 25 years. This is easy to understand as modern-day customers want cheaper power but do not necessarily want to shoulder the burden of the risks or maintenance involved.
Software Kills Differentiation
One of the biggest differentiators that solar companies had in the past was their ability to correctly design the solar solutions through the expertise of their electrical engineers. Fast forward to today – you can buy commercially available software with which you can design the solar solution without any background in electrical engineering. The differentiator turned into how you use the software to package a solar solution for your customer and sell it to them as a service.
New Regulations Open The Market
Renewable energy is fast becoming a global trend. From a South African point of view, we have not seen the same growth as we currently see globally, and this is due to certain stumbling blocks. Now, with the newly released Integrated Resource Plan, there is a marked increase in the focus on renewable energy in South Africa. The aforementioned stumbling blocks are moving out of the way and other solar companies will have the opportunity to compete in the market.
When mobile phones first became available, nobody fully understood the importance of the new technology. Many people still used their landlines to phone one another. But only a few short years later, mobile phones radically overhauled the traditional telco industry. I believe that the same will happen within the renewable energy space, particularly the solar industry. Distributed generation, i.e. the ability to generate the power where you need it, came to completely change the future landscape of utilities and this is only the beginning. I will talk more in-depth about the above points in the coming months. These are exciting times for the solar industry and I personally can’t wait to see everything play out. If you want to join me on this journey to green, then feel free to contact me and see how I can change your business into a powerhouse.