Tag: time-of-use

What Does Time-of-Use Rate Structure Mean for Solar Contractors?

Article RoundupIndustry Issues

Time-of-use rate structure impact the solar industry now and in the future. Some key issues seem to be how TOU policy changes in a given state would affect the sales process and proposal generation, the impact on customer savings and if and how software and other tech should address it.

Below is a compilation of excerpts from my interviews with solar company owners as well as a roundup of some recent articles about TOU. While the articles are by no means exhaustive I think they point to some interesting issues related to what the interviews discussed.

INTERVIEWS

Future/Markets

Three owners I spoke with – from HA, CA and AZ – all agreed that TOU is the future of solar in America. The CA owner was at a conference for TOU and energy storage when I interviewed him and he told me that this was a big issue – and that CA would be one of the first to make the switch. The HA owner told me that for areas with net-metering (unlike HA which lost it in 2015) TOU is not relevant but that San Diego, AZ, HA were all moving to TOU. He estimated that the market for customers needing to address TOU when installing a solar system would soon include all of HA, southern CA and parts of northern CA and that by late 2017 these areas would be huge markets. However, another owner in WA state felt that, while TOU would be relevant in the future, it wasn’t currently important in his state.

Sales Process/Software

While the AZ contractor completely concurred with the sentiment that TOU is the future he felt that having it be a part of the conversation with customers was premature. At the moment he felt it meant having too many items to fill out (i.e. when do you use the most electricity, how do you use it, how can you adjust it, etc.) and that customers would be reluctant to provide that info unless they were genuinely interested. He thought that in 4-5 years customers would be more open to it, as the need to look at would be more pressing. He did feel that the current situation in HA was different than AZ due to differences around energy costs and politics – noting that  everything is more expensive there compared to AZ.

Another CA owner agreed with the owner above, saying that, while he used Energy Tool Base to do proposal calculations, he felt that asking detailed questions in an effort to have the consumer adjust usage was “going into the weeds with a customer.” He felt it was too complicated for most because it depended too much on the person’s follow, making the results too haphazard. He said doing proposals this way was marketing to 1% of the market.

In contrast, the CA contractor at the conference (above) felt that it would be helpful to have software where the salesperson could enter info regarding rates and time of day for a customer (plus other considerations like battery usage and rebates) during the sales process.

The HA installer felt adamant that the HA consumer needed to understand their home usage because it would be more beneficial to them – as well as to consumers in areas like San Diego and AZ that were moving to TOU. He felt that TOU was a vital part of accurately quoting systems and to show relevant ROI. He thought the ideal software would include a series of questions that asked about usage, i.e. Do you work from home and when? What time do you  leave the house? When do you run laundry? That data (which would also account for when the system pulled from battery backup) could be viewed by the customer and salesperson to discuss how to optimize ROI and run calculations if the customer made shifts in usage times, updating ROI each time. The software could then model a system to meet that calculation. He did say that you’d have to put on a clamp to measure usage – that the hard data would be the only way of modeling the system accurately for the proposal.

Get my monthly reports on the solar industry & content marketing!

For the past three years, I’ve enjoyed receiving Sara’s emails that cover many subjects related to our mission of providing practical, affordable and reliable solar solutions for a variety of clients and applications. – Brandon Leavitt, Solar Service Inc., monthly subscriber