By Bridget McCrea
It’s been about 18 months since Granite Electrical Supply in Sacramento made its first foray into the solar business. It seemed that more end users were asking their electrical contractors for assistance and expertise with their solar project and those contractors naturally turned to their electrical distributor to help fulfill those requests. Granite Electrical Supply was also fielding an increasing number of inquiries from its walk-in customers, most of whom need solar equipment, parts, and support.
“Combined, those two market trends provided us with some pretty good reasons to expand our business into the solar arena,” says Bob Powers, president. In mid-2010 the distributor added solar panels, modules, invertors, and racking to its catalogue, and hired Jeff Grilione, solar specialist, to oversee the division.
The investment has paid off for Granite Electrical Supply, but the new venture has come with its share of challenges. In fact, the three companies we interviewed for this article all say that moving into the alternative energy realm has its advantages and drawbacks. Here are six success tips that they came up with for distributors looking to add solar to their lineups:
- Provide support to electrical contractors. If there’s one thing that surprised Grilione about solar sales, it was the lack of contractor knowledge about the engineering and application of such setups. “The solar part of a project is often just ‘thrown’ out there, without much support or expertise behind it,” says Grilione, who views the lack of detailed engineering as an opportunity for electrical distributors. “It gives us the chance to not only sell the products, but also to help contractors put them together.”
- Understand that it’s more than just panels. The most basic solar energy system comprises solar panels that produce DC power; a racking system that attaches the panel to a sloped or flat roof; and an inverter that converts the DC power to useable AC power. Other items that go into the systems include combiner boxes, wires, and miscellaneous parts. “In order to serve your customers and establish yourself as a solar specialist, you’ll have to carry and support all of these items,” says Jim Dunn, executive vice president of sales and marketing for Tinton Falls, N.J.-based Warshauer Electric Supply Co., which opened its energy solutions division in January 2010.
- Brace yourself for some competition. The fact that most solar manufacturers sell direct to contractors and end users puts electrical distributors at a disadvantage—both in terms of pricing and the ability to grab market share. To break through those barriers, Grilione and his team talk to customers about the freight costs and unfavorable return policies associated with buying direct. They also sell the distributor’s solar expertise, and let contractors know that the company is “here to help, even after the product is installed and running.”
- Create a “one-stop-shop” solar offering. Serving up system design, structural analysis, and field drawing services also goes a long way in helping an electrical distributor establish itself in the field. “It’s not just about selling solar panels on a lowest price-per-watt basis,” says Dunn. “You really have to offer the complete package.”
- Make the commitment and stick with it. Solar isn’t the kind of product category that distributors can sell on an occasional basis and hope that their time, money, and energy investments pay off. Between the education, inventory, and ongoing support that solar requires, making a full commitment to the sector is a better bet. “You can dabble in it or you can commit to it,” says Powers. “We’ve found that the best approach is to make a major investment in inventory and then develop a dedicated team to handle those lines.”
- Always keep an eye on the bottom line. Burt Schraga has some valid concerns when it comes to stocking solar panels—namely, the fact that he doesn’t want to get stuck with them if their prices erode. “Sometimes by the time you get the panels to the warehouse their prices have come down 10 percent,” says Schraga, CEO at Santa Clara, Calif.-based Bell Electrical Supply, which sells infusers, circuit breakers, and enclosures to firms that market solar combiner boxes. Schraga sees opportunity in the solar market for distributors, but warns that challenges like margin erosion and an increase in imported panels from countries like China require companies to use, “extreme caution when venturing into the market.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at email@example.com or visit her website at www.expertghostwriter.net.Tagged with tED