Ahead of the latest Q2 2017 U.S. Solar Market Insight from GTM Research and the Solar Energy Industries Association, GTM Research said it has observed a steep slow down—17 percent—in the amount of new homes going solar. The research firm attributed much of the slowdown to California, where the amount of newly installed residential solar fell 22 percent between the fourth quarter of 2016 and the first quarter of 2017.
“It could have been the unusually wet winter, but it's more likely a combination of seasonal factors and market fundamentals that resulted in a slow start to the year for residential solar in California,” wrote Greentech Media Senior Editor Julia Pyper. “The decline is even more pronounced on a year-over-year basis, dropping by 31 percent from 284 megawatts (DC) in the first quarter of 2016, to 196 megawatts (DC) in the first quarter of 2017.”
California makes up roughly 45 percent of the residential solar market, according to Pyper. As such, when its market slows, the whole nation’s slows markedly. But Pyper added that other markets, among them New York and Massachusetts, saw a slowdown in the first quarter as well.
While solar installers told GTM Research that California’s rainy winter slowed their build-out times, shifting marketing and sales strategies from large home solar installers like Tesla’s SolarCity and Vivint Solar, also contributed to the slowdown, according to Austin Perea, solar market analyst at GTM Research. SolarCity recently announced it would stop door to door sales and Vivint announced it would start opening retail kiosks, for instance. Both companies, according to Austin Perea, a solar market analyst at GTM Research, are focussing more on profit and less on rapid growth.
“Customer acquisition costs are the highest-cost component of an installation,” Perea said. “But nobody has really cracked the code on the customer acquisition side.”
“The long tail really benefits from the marketing and sales efforts of larger players; they bring awareness and consumer education to the solar pitch,” Perea said. “We’re hearing from installers that it’s a double-edged sword that SolarCity is pulling back, because it’s also noticeable they’re reducing marketing spend, which has an impact on how aware [the long tail’s] potential customer base is of solar.”
Looking ahead, GTM Research and SEIA anticipate that the residential solar market will see a gradual slowing in the near term, Pyper said. While the long tail of installers will take some of the market share that bigger companies aren’t going after now, she said it won’t be enough to grow the rooftop solar market overall.Tweet