For contractors looking for new business opportunities, offering solar energy might be the wave of the future.
Take Hal Smith, for instance. Smith, president of Halco in Phelps, New York, has always been progressive with how he approaches his business. He’s offered home-performance and geothermal services for several years and decided to add solar to his business about five years ago.
“We were involved with geothermal first, then customers were asking how to not have a utility bill,” Smith said. “We were already doing home performance, so the missing link was solar. We decided to get into that business. It just continues to grow.”
Smith now staffs four crews specializing in solar panel installation. He expects this sector to push the $4 million mark in 2014.
“There are different stumbling blocks and learning experiences like any new business, but everything goes together so well. It makes a ton of sense,” Smith said. “We just finished up a project where the customers won’t have a propane bill, or an electric bill, and they’re not going to pay for gasoline either. They had a large enough roof for us to put enough solar in so they could charge their two Chevy Volts. It’s cool stuff.”
Larry Waters, service manager, A-1 Guaranteed Heating and Air Inc., Vallejo, California, dipped his toes into the solar market in 2010 by attending photovoltaic installation and sales training. However, the company decided not to take the plunge right away, as it wanted to concentrate on its home-performance division before embarking into solar. As things fell into place, the company proudly introduced its first solar offering about a year ago.
“We try to be as good as we can, regardless what we are doing,” Waters said. “Between our first look in 2010 and when we took solar on, the technology increased pretty dramatically. Financing has really surged ahead, as it’s now viable for the customer and contractor.”
Waters believes solar work will open up a lot of doors for HVAC contractors “who want to get involved with it for the right reasons.” As solar is gaining awareness in his area, Waters sees opportunity.
“When we were first looking at the training, we were a little overwhelmed by it,” Waters said. “We thought we needed someone from the solar industry to join us, but, after some time, we’ve found it’s relatively easy to install, sell, and afford.”
Solar Units Growing
Solar-powered HVAC units are also becoming a growing part of the industry’s landscape.
Lennox Intl. Inc. first began researching solar energy in the 1970s, but it wasn’t until 2007, when the cost of solar photovoltaic modules started going down, that Lennox began incorporating PV into the operation of air conditioners, said Lily Mak, senior product manager, commercial splits, heating, and IAQ, Lennox.
In 2010, Lennox released the SunSource Home Energy System for residential applications and followed that with the SunSource Commercial Energy System in 2011. Both systems produce electricity for the entire home or building by allowing the solar modules to be wired to the Lennox outdoor air conditioning unit, thereby making it simpler for HVAC contractors to install.
“Some of our dealers have made SunSource a regular part of their product offerings,” Mak said. “Having a solar offering helps contractors differentiate their services and to expand into new market segments. In addition, renewable solutions, such as the SunSource system, can help meet LEED [Leadership in Energy and Environmental Design] points as well as the ASHRAE Green Standard 189.1 requirement to be solar-ready.”
John Williams, president, HotSpot Energy LLC, said that although solar air conditioners have mainly been sold to organizations or used internally by contractors, his company is now starting to see some demand from the U.S. marketplace.
“The demand for solar air conditioners is much higher in areas where either high utility costs exist, or where there are significant state rebates or incentives,” Williams said. “A number of forward-thinking HVAC contractors in those areas are now selling solar air conditioners.”
Mak said there are several trends that suggest growth, including falling prices of solar modules, but the permitting of solar PV systems can be “unduly burdensome in some districts. However, Solar ABCs [Solar America Board for Codes and Standards] is developing a standard protocol for permitting of systems and this could help reduce the time and energy spent on installations.” She suggested contractors interested in pursuing solar projects start by arranging for PV training.
“They can inquire at their local utilities about net metering rules and available renewable energy rebate/incentive programs,” Mak said. “Also, contractors should be aware of the local code requirements in their areas for solar PV systems. Contractors should also be familiar with tools for estimating the amount of solar energy that can be generated at a site with solar PV modules.”
Williams said he believes a lack of industry awareness is a key factor holding solar heating and cooling back as it continues to be a niche product only popular in specific regions of the country. Not only that, it’s been hampered by high equipment costs resulting from low manufacturing volume.
“Most HVAC contractors only become aware of solar air conditioning after a customer asks about it, prompting the contractor to seek information,” Williams said. “The things that will help take solar air conditioning forward are better industry and public awareness, rising energy costs, and, to some extent, government support for solar products. And as solar a/c sales volumes increase, costs will fall, which will further increase the rate of adoption.”
Smith said getting started with solar did not require much of an upfront cost for his company, as other parts of the business already had many of the tools needed.
“We had scissor lifts, and we already had electricians on staff,” Smith said. “We didn’t have to go out and buy a ton of specialty tools. Most contractors will not have to spend tens of thousands of dollars on specialty tools.”
Waters said he’s facing an uphill battle because he’s currently pitching solar to customers who weren’t necessarily shopping for it, as they are using it as a complementary measure to whole-house retrofit projects.
“In California, we wear the solar on our roof as a badge of honor,” Waters said. “More people are asking questions. More people are starting to get it.
“More companies are offering leasing programs where they aren’t going to look at the actual energy usage in the house and how it can be improved, but rather address the current energy usage.”
For Smith, he said there’s no point in contractors getting involved with solar unless they are also going to offer home-performance services, as the two go hand in hand.
“For us, what separates us from some solar-only companies is we’re all about ‘reduce before reproduce,’” Smith said. “We’re very involved in home performance; we always perform an energy audit first. Without question, it makes sense to tighten up the home first. After that, we consider investing in solar. The payback, the return on investment, is way better when you do that. If all I do is sell solar, and you have a house that’s like Swiss cheese, the return on investment just isn’t there. We really feel we have to do the right thing for the homeowner. We’re evaluating everything.”
That’s why Smith said contractors need to start embracing some of these newer, advanced technologies.
“They go together like peas and carrots,” he said. “It’s all about the energy business, it really is. I wish more contractors would embrace that.”
Publication date: 9/1/2014