Considering Solar for Distributors: Part 2
We’re continuing our review of the important considerations a distribution cooperative or municipal organization must address when adding solar to their energy offering. Helping us again is Mark Aeilts, a thirty-year veteran in the energy distribution industry.
In Part 1 we covered three vital points: the importance of fully understanding existing wholesale power contracts and their implications, looking for ways to maximize benefits from tax credits to investors in solar, and the reality that time may not be kind to those who wait too long to invest in solar. “It’s important to remember that even those points are dynamic,” explains Aeilts. “They’re moving targets, and there are factors that will affect them and how you approach them.” And that leads us to the next point.
4: Get Help
“Technology is changing so fast it’s hard to keep up,” says Aeilts. “Not being involved at all isn’t really an option. Even if you decide against an enterprise-level solar installation for your organization, you still have to be a knowledge resource to your customers. They’ll be asking about it eventually.” To that end, for your sake and for your customers, Aeilts suggests establishing a dedicated mechanism to remaining abreast of the issues as they develop. “It can be assigned to a staff member, or hired out for consultation. It’s important. It’s changing rapidly, but it’s definitely not going away.” A knowledgeable resource on the shifting, advancing environment of solar is absolutely indispensable. See our blog on the changing distribution landscape and the co-ops place in it.
5: Know Your Goal
The points we’ve covered so far can help a distribution organization build a platform from which to take action. “But you have to know that you’re heading in a direction you want to go,” warns Aeilts. What is your specific focus? Are you shooting to be the energy experts in your location? Are you especially concerned with remaining competitive? Are you going to treat third parties in the solar industry as threats or opportunities? “Whatever your ultimate decision on an installation, your efforts in this area will benefit from a clarity of focus.”
6: Know Your Customers
It’s just as important to know what your customers think about and plan to do with solar as it is to know your own position and plans. Solar is a well-established market now, and its popularity is rising. Your decision to adopt or reject a solar project will have an impact on your customers and their decisions. “Distributors need to be surveying their members,” urges Aeilts. “You need to know what alternatives customers might be evaluating for themselves, and you need to know [those alternatives] better than they do.” The truth is, customers have choices for electricity now. Solar options are going down in price whereas central-station power is going up in price. These two trends will intersect in the near future, and it’s going to radically alter the status quo. Aeilts adds, “Your organization can figure out what frequency is right for you, but you definitely need to be touching base regularly.”
One of the largest obstacles to solar installation in the private sector has been the natural disparity between peak solar energy production and peak energy usage. Battery technology is improving quickly and erasing that disparity. “Efficiency is increasing. Prices are dropping,” acknowledges Aeilts. “Storage will soon become a realistic solution for homes and businesses. It will hit a point soon where it’s a normal part of home-buying and renovations. It’s kind of unavoidable.” As this reflex point approaches, a distribution co-op or municipal organization will be in a much better position to instruct and inform their members if they’ve worked through the process themselves.