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The Companies of Residential Solar: Part 2
Here come the Challengers
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Today we are continuing our deep dive into Solar:
So far we went through:
Want to know how solar became so affordable? Dive into our detailed breakdown here.
Then we went into how Residential Solar works - from the buyers side to challenges
Who are the market leaders and what makes them special? Check them out here.
Today, we're shining the spotlight on emerging giants in the solar arena:
Palmetto: A fresh face, now the 8th largest in the scene with 1% market share.
ION Solar: Celebrating the all-American spirit in solar solutions.
Pineapple Energy: What happens when midsized installers are brought under one roof
Let’s dive in 🌊
The companies of Residential Solar
Part 2: Here come the Challengers
Today's companies employ three distinct strategies, and we will be analyzing them based on their size and strategic approaches.
HQ: Charleston, South Carolina based
For Chris Kemper, the founder and CEO of Palmetto, the customer has always been the beacon. He sees the North Star of his vision defined by two pivotal factors: cost and experience.
Trust in a Fragmented Solar Terrain:
Amidst the solar sector's vast, decentralized landscape brimming with myriad local contenders, carving a trustworthy brand is no easy feat. Yet, Palmetto illuminates the scene with gleaming 4.9 stars on Google reviews.
Evolutionary Business Model:
Having spent years as a traditional vertical seller, Palmetto has transformed its role. They now serve as the central conduit, bridging homeowners, installers, outsourced sales and marketing teams, services, financiers, and equipment manufacturers.
This pivot has empowered them to:
Slash operational expenditures - by lowering soft costs (primarily labor) across the value chain
Amplify profit margins - by letting each stakeholder focus on what they are best
Resulting in surplus cash channeled towards research, development, and automation.
Market Strategy - following the ecommerce playbook:
Shifting gears from conventional salesforce tactics, Palmetto is now harnessing the e-commerce playbook - digital first, direct-to-consumer. They aim to make purchasing solar for your home as simple as shopping on Amazon.
They're also forging alliances with utility providers and mortgage corporations - going where already strong (energy based) customer relationships exist.
In his forecast, Chris predicts a potential implosion for traditional vertical companies. Reflecting on the last decade, he reckons that Palmetto's current model would've been implausible then.
Teaming up with mortgage entities, they advocate that solar considerations should top mortgage priorities.
Service for everyone:
Palmetto reaches out to "orphaned" solar clients – individuals left unsupported after a single solar venture or those who purchased from now defunct solar companies. In search of a dependable ally for solar maintenance and optimization, these clients present potential upsell opportunities, such as battery installations and more.
In their approach to outsourcing installations, Palmetto draws inspiration from staffing strategies of tech giants like Uber and Lyft. Through cohort analyses, they not only retain top talent but also incentivize their best workers for continued excellence.
E-commerce Excellence & Feedback:
Every Google review isn’t just a metric; it's a lesson. They diligently respond, absorb feedback, and refine their operational matrix.
HQ: Provo, Utah
Meet Ion Solar: not just another solar company but an embodiment of true-blue, American craftsmanship in the sun-powered domain.
What Sets Ion Apart?
Focus on Direct Sales (door to door), selling only american products (at a premium), starting at lesser known states, and then expanding from there (everyone needs solar, even if the winter is harsh).
Integrated Solar Solutions:
Ion Solar champions a unified service approach. They also believe in a strong customer relationship, with high reviews.
Ion's unified software platform offers an integrated interface for every phase of the buyer's journey and for each stakeholder. Beyond simplifying operations, this comprehensive digital solution is designed to foster deeper customer engagement and streamline the entire process.
For Ion's in-house sales team, efficiency is a practiced principle, not merely rhetoric. Emphasizing door-to-door engagement, they consistently achieve remarkable retention rates and swift conversions, complemented seamlessly by expedited installation procedures.
Commitment to Local Craftsmanship:
Ion Solar’s allegiance to North American manufacturing stands out. With an unwavering commitment to use 100% locally-made equipment, Ion champions not just quality but also the American spirit.
By January 2022, Ion Solar distinguished itself as the 8th leading residential installer in the US. Intriguingly, their journey didn't begin in the traditionally sought-after solar markets like sunny California, but in the snow-clad terrains of Utah. This strategic choice to initiate in more challenging markets has refined their approach, providing them with a distinct competitive edge.
HQ: Minnetonka, Minnesota
In 2020, the solar industry saw the inception of a promising enterprise: Pineapple Energy. Founded by Kyle J. Udseth, the company's formation wasn't a shot in the dark. Udseth, carrying with him executive-level experiences from solar titans like Sungevity, Sunnova, and Sunrun since 2015, brings a reservoir of industry knowledge to Pineapple Energy.
Core Belief: Stronger together
At the heart of Udseth's enterprise lies a belief: Residential solar is undergoing a fundamental transformation, metamorphosing into what can be likened to a banking domain. With this understanding, how does Pineapple Energy intend to navigate the solar landscape?
Pineapple Energy's strategy is layered yet straightforward:
Identification and Acquisition:
Recognize leading players in solar, storage, and energy services, then integrate them under the Pineapple banner.
Once acquired, these mid-sized installers are not overhauled. Instead, they are trusted to function efficiently, employing their industry practices.
Shared Resources and Synergy:
Acquired entities gain access to a suite of shared services, spanning HR, marketing, regulatory concerns, technological support, and legal aid. Furthermore, Pineapple's umbrella promises cost synergies, encompassing aspects like equipment procurement and favorable financing conditions.
Why Opt for Established Brands?
One might wonder about Pineapple's acquisition preferences. The answer leans towards legacy. Older, established brands bring with them:
National Recognition: An assurance of credibility and trust.
Database Potential: A backlog of unsold leads, ready to be redirected and optimized.
Expansive Base: A platform ripe for referrals, upselling, and cross-selling ventures.
In Summary: Acquisition works
With six acquisitions and counting, Pineapple Energy emerges as a tactful player in the solar realm. By melding the best of old-school brand reliability with modern operational efficiency, Udseth's venture promises to be a beacon of strategic innovation in the ever-evolving world of solar energy.
Thanks for reading this deep dive into Challengers in resi.
The solar industry is undeniably in the midst of an evolution, driven by dynamic market players and innovative strategies. Companies like Palmetto, Ion Solar, and Pineapple Energy are leading this transition, each carving out its unique niche through a blend of technological advancements, customer-centric models, and strategic expansion. Palmetto's pivot towards an e-commerce-driven model, Ion Solar's commitment to local craftsmanship, and Pineapple Energy's ingenious acquisition strategy exemplify the diverse pathways to success in the solar realm.
As we look ahead, it's clear that the residential solar sector is not just about harnessing the sun's power, but also about reimagining the possibilities of the industry. Through Climate Drift, we will continue to spotlight such transformative tales, providing our readers with an insider's perspective on climate solutions.
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