Part two in a three part series
In part one of this series, the news was exponential growth for the 102 electrical distributors in Affiliated Distributors’ Clean Energy program. The program itself is not yet two-years-old.
There are, however, many layers involved. For example, on the program’s agenda for 2012 is generating leads for distributors on sales in energy efficiency, renewables, and the smart grid, according to David Oldfather, president of AD’s electrical divisions.
“We’re funneling leads to our affiliates that we develop in a number of ways,” Oldfather said. These methods include advertising, publicity, and website queries. Some AD suppliers (manufacturers) are also bringing leads to AD Clean Energy.
That’s not the limit. “We have partnered with some EPC [engineer, procure, construct] developers,” said Christian Siebens, director of clean energy. EPCs are larger companies that handle “turnkey” development of larger solar projects
Solar suppliers
Another element of the program is enticing suppliers of clean energy products and systems to come into the fold. Obviously, AD affiliates have had relationships with electrical and lighting manufacturers—some perhaps dating back to before Thomas Edison’s death in 1931.
Solar suppliers, however, are another matter. Consider the situation at Schaedler-Yesco Distribution of Harrisburg, Pa., a company that had made its mark in energy efficiency work in the state before AD’s Clean Energy program got started. In fact, Schaedler-Yesco hired John Polites as its energy manager back in 2005.
Related story: How Schaedler-Yesco looks at clean energy
Polites worked on getting Schaedler-Yesco into solar for more than two years, he said. The solar companies were “looking for volume,” and seemed allergic to the prospect of negotiating individual deals with numerous electrical distributors. “The fact is, AD made this a lot easier for us,” Polites said.
Above: The AD Clean Energy site includes selected videos from suppliers, including the one above from EIKO (an LED supplier).
“Distributors that were ready to jump in didn’t really know the solar landscape,” Siebens said. “Perhaps some were struggling with renewables.”
The AD Clean Energy program has structured relationships with 34 new suppliers—new to AD, that is. A quick look at the program’s “line card” includes many familiar names, but also companies like Renewegy, Solar World and Xunlight that won’t be “household names” for most distributors.
There are six inverter suppliers listed, starting with GE Industrial Solutions and ending with Sunergy America.
Size plays
Looking at the options from the perspective of the suppliers, it would seem much more intriguing to deal with a group that has more than $11 billion in total sales, and includes more than 100 local electrical distributors, compared with a one-at-a-time approach.
That same thinking worked, Oldfather said, when the Clean Energy program went searching for financial assistance. “We tried to find outlets,” he said. “Once we explained the AD model to the right financial people, though, things fell into place.”
Helping distributors go deeper
AD’s Clean Energy program isn’t finished, according to Oldfather. While the line card includes five suppliers of EV charging stations, that doesn’t appear to have been a focus. And there is work to be done, he and Siebens said, on the smart grid element of the program.
“Our involvement is still being developed,” Siebens noted. “We’re paving the way for our affiliates to become involved in the early phases” of what is likely to be a multi-decade effort.
The effort is more elemental than EVs, the smart grid, energy efficiency, solar or wind. AD’s plan is to take distributors up the ramp of energy marketing and selling:
“At the first level, a distributor is going after the low-hanging fruit. But that amounts to selling components. Your company really isn’t differentiating itself. A second level would be working with your good contractor customers. You work with them to partner on projects—projects the contractor brings to you. But at the third level, the one in which we want those ‘Champions’ to be involved, you—the distributor—are telling the story to the end-user,” Oldfather said.
That third level, he added, is where higher gross margins are hiding.
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