The world after Apr 2012, mega cheap installs ...and one proposal to avoid price wars

[jerriais]

Hi all,

I've been following the threads about pricing and predictions of the solar world after Apr 2012 with interest. Down here in the SE there is certainly a continual downward price trend for installs. Seems like a few installers are even quoting sub £10K for 4kWp systems. Not really surprised though as that is just what happened in Germany during the first years of the FITs there.

Prices WILL go down further here (esp after April as some companies will be desperate for a smaller pool of customers) and it seems that many small companies are already feeling the pressure as I've been amazed at how many candidates for a job I recently posted were running their own solar business up to a month or so ago.
:nopity:

HOWEVER ... I do have a plan for my business, and yours if you're interested.

Basically I'd like to offer investment, cashflow support, expertise and support in branding, admin including CRM systems configured for the UK solar industry, and fantastic purchasing power for companies that are interested in working with us. I'm currently supported by three co-investors who collectively have 50 years experience in the European and US solar markets. Their experience is at the top level, Chair of leading European Industry Association, involved in solar procurement for 10 years, running one of the most successful US installer companies so strategically you can also be sure of the best backing in the industry. You could say this is a bit like Dragons den but with Dragons who actually know the solar industry inside out!

We're looking to grow what we already have at our office/warehouse in Winchester by partnering with the owners of good quality solar PV installation companies to become a successful player in the UK solar installation field but with fantastic local credentials, great workmanship and the ability to buy full containers of modules for us all to install with no payments to distributors. As an example of what can be done with that buying power we have recently found modules offered in Europe for 40% less than the same panel from any UK distributor :rolleyes4: (pm me if you're an installer and would like to know the actual rates), sure, not the best modules on the market but even the top tier modules from China that you have heard about are being offered at only a few pence more. If you think getting modules supplied at those rates and support from a top quality team could be a great advantage for you in your local market then please consider getting in touch.

I've listed a few of the benefits for us and for you if we were to invest in your company:

Benefits for SunSmart:

- Gaining critical mass quickly as pressure on smaller installers intensifies
- Immediate market access in new geographical areas
- Immediate brand exposure
- “pull”-effect for other co-operation partners
- Working in co-operation with, rather than in competition with, well run companies in the solar industry.
- Buying power will be increased
- General economies of scale

Benefits for New Company

- Focus on what they are best at – dealing with the customer, designing great solar systems
- Best chance to thrive in the next phase of the UK solar industry (consolidation phase anticipated after April 2012)
- No hassle with administrative issues, cashflow issues
- Taking the next growth step and be in a strong position to bridge the gap between Feed In Tariffs and grid parity (2017?)
- Branding will be increased
- Buying power will be increased
- Pooled engineering resources for larger projects
- More professional setup, e.g. in HR, Health and Safety, IT, etc.
- More competitive in the market
- Personal benefits for the owner/manager:
§ revenue from the sale of the company plus participation in future success of his unit and SunSmart, reliable salary for him and his team
§ part of a larger team, wider support network
§ more public exposure and/or national management opprtunities if so inclined
§ high degree of autonomy with clear targets
§ chance to be in at the beginning of a project that aims to make a major impact in the UK solar industry

 

[MorganPVI]

Re: The world after Apr 2012, mega cheap installs ...and one proposal to avoid price

Is this a partnership or a buyout?

 

[jerriais]

Re: The world after Apr 2012, mega cheap installs ...and one proposal to avoid price

Hi Morgan,

There's no set formula for how we would do this and it would be a matter we would discuss with any potential partner. If an owner did want to sell their company we would much prefer a situation where they sell their ownership but continue as the manager of the company with an agreed salary package and bonus based on results of the company going forward. What we're certainly not looking for is to buy a company then totally take over the running of it as we would only be doing a deal with a company that we thought was well run, and if a company is well run that's because the people running it are doing a great job, so obviously we would want them to be a key part of the growth of the company. As mentioned above, the advantage for an owner to go down this route is a secure salary, more chance of success in a more competitive market next year, more focus on the important (and more fun) parts of the job and the financial and strategic expertise of a group of people who have a lot of experience of solar PV markets.
And we're a fun bunch of people to work with ;-)

Matt

 

[Worcester]

Re: The world after Apr 2012, mega cheap installs ...and one proposal to avoid price

@jerriais

Sound a little bit like a reverse franchise opportunity.

Clearly the ex-owner of their business will lose their valued independance and ability to offer whichever range of panels / mounting systems / inverters they wish to.

In exchange they become a self-employed franchise owner with central purchasing, procedures etc.

I'm not saying it's a bad idea, I know of a number of independant opticians that are actually far happier now as managers of successful specsavers branches.

It does require a mindset change.

Also by far and away the majority of installers are not 'dedicated' solar PV installation companies, they do other electrical work as well.

So despite their knowledge of the US and Euorpean markets, they WILL find the UK market different.

p.s. I also regularly work with 'Experienced' US, Asian and German partners, and the differences in culture and market places are vast.

There are other easier ways for them to enter the market and build critical mass.

 

[jerriais]

Re: The world after Apr 2012, mega cheap installs ...and one proposal to avoid price

Hi Worcester,

Thanks for your comments, you're quite right in that we are looking for owners that are happy to substitute the roller coaster ride of the owner/MD role for a more stable role but still with a lot of say over how things are done in their office including which panels and other kit to offer. And this certainly wouldn't be a corporate style take over. Any owner that comes on board would also have a major say in the future direction of the whole project as even with the experience we already have on board, I know we could get the best ideas about how to operate in the UK market from those who are active in the front line of the industry.
Not sure about how it is to work as a Specsavers manager but what we're aiming for could be similar in some ways. We'd like to create a network of installers who have more time to be with customers and design systems and less time each duplicating work doing separate branding, admin, finance etc.

 

[jerriais]

Re: The world after Apr 2012, mega cheap installs ...and one proposal to avoid price

PS I should also mention that we are looking to work with companies 2-4 hours driving time from our main HQ in Winchester, i.e. not too close that we're overlapping but not too far that we can't get from one to the other for a day's work.