Beware of Lighting The Solar Candle at Both Ends
Another year is rapidly coming to a close and with it another step toward solar needing to stand on its own two feet. I am referring of course the to the tax credit and subsidy that gives both homeowners and commercial clients the same 30% tax credit. It seems that from the beginning that solar has been disliked for such an obvious subsidy. Too many are quick to throw the statement "Once the subsidy is gone solar will fold" Nothing could be further from the truth. In fact, I for one believe once the ITC (Income tax credit) has vanished, solar will become significantly better for the end customer. By the way, did you know that last year in the US that fossil fuels got over half a trillion in subsidies? Solar got about 10% of that. This brings me to my point of today's solar blog.Ted "The Wolf" Strzelecki
Lighting the candle at both ends. As we wind down the 30% ITC which has had a nice run, we are heading for unprecedented territory in solar. With this reduction from 30 to 26%, this means costs and retail pricing will also be forced to compress. What may at first seem a better opportunity for the customer is potentially a huge warning sign. What I mean is, with the margins being cut for solar companies, a great many of them may cut corners. I'm about to be very transparent for all those not in solar. Solar has had incredible margins. Really. Almost casino or pharmaceutical type margins for years. As these diminish companies, and individuals who operate them will either sink or swim. My opinion from what I have seen being heavily entrenched in solar (and often hated from my own industry for exposing truths) is that the majority will fail. I also believe in a saying that "Those who deserve to lose, often do". Perhaps Warren Buffet said it best, "It's only when the tide goes out can you see who has been swimming naked".
There are far too many companies that are top heavy or ran without discipline. Too many CEOs in solar that appear to have watched MTV's cribs or are busy trying to catalog their Instagram with false posts and pictures of fake success. Honestly, most companies in solar are days or weeks away from losing everything. Not enough entrepreneurs and too many wantrepreneurs.
I felt it was important as we come to a close of 2019 and the ITC begins to contract that you, the solar customer, should be aware. You should stay away from solar bidding sites. This is where the worst case of undercutting and the bait and switch methods are breeding. It is best to do your own due diligence and get multiple quotes. Get this on on paper, email and on contract. Perhaps the one thing I would suggest above all that no one will tell you to do is to do this: Ask about their financials. A solar company that is barely hanging on can offer a warranty as long as you want to hear. However, fulfilling this is another execution altogether.
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