How to Choose the Right Projects and Sectors
The commercial solar sector is rapidly evolving, offering a myriad of opportunities in 2024. For businesses in the solar industry, the key to success lies in strategically selecting project sizes and sectors. This blog post will guide you through identifying the most promising opportunities in commercial solar, while considering crucial factors for your business strategy.
Optimal Project Sizes: Focusing on Efficiency and Profitability
Target Range: Projects between 20 kW to 200 kW are often the ideal range as it offers a good blend of manageability and profitability.
Advantages: These projects usually have shorter approval and installation times, making them efficient ventures.
Key Sectors to Consider
Industrial and Manufacturing: High energy usage and a focus on long-term savings make these sectors ripe for solar investments.
Agricultural Sector: Farms and agri-businesses can benefit substantially from solar energy, especially given available government incentives like the USDA REAP grant.
Educational Institutions: Schools and universities present varied opportunities and often have access to unique funding for renewable projects.
Healthcare Facilities: These facilities prioritize reliable and sustainable energy sources, making them excellent candidates.
Hospitality Industry: Hotels and resorts, with their significant energy use, are great prospects for larger solar installations.
Crucial Factors for Selecting Sectors and Sizes
Access to Decision Makers
Direct Contact is Key: The ability to directly connect with decision-makers is crucial. Smaller businesses often offer more direct access than larger corporations.
Navigating Gatekeepers: Larger projects may involve more stakeholders, potentially lengthening the sales process.
Understanding the Sales Cycle
Project Complexity: Larger, more complex projects typically have longer sales cycles which might lead to an unstable cash flow but potentially better margins.
Sector-Specific Timelines: Some sectors may have quicker decision-making processes, influenced by factors like energy urgency or policy changes.
Evaluating Potential ROI
Assessing Profitability: Different project sizes and sectors offer varying levels of ROI. Larger projects might promise higher returns but require more resources and a larger setup.
Consider Long-Term Benefits: Building relationships in certain sectors can lead to ongoing business and referrals.
Market Availability and Competition
Prospect Density: Understand the density of potential clients in each sector. More prospects usually mean more opportunities and more scaleability, but could also mean increased competition.
Project Feasibility and Logistics
Infrastructure and Space: Ensure that the typical business in the sector you choose to target can accommodate the solar installation and owns the building.
Unique Sector Requirements: Each sector might present unique installation challenges that need to be considered.
Geographical Factors
Service Area: Your operational area can influence which sectors are most accessible. So consider looking up which sectors are dominating in your area and take those into consideration. E.g. agriculture would be a ripe opportunity in a state like Texas which accounts for over 12% of the total number of farms in the US.
Regional Incentives: Local incentives can make solar projects more appealing in certain areas, so make sure to look up the incentives and grants available in your area. The Database of State Incentives for Renewables & Efficiency (DSIRE) has a comprehensive list of solar incentives by state, as well as more information and maps showing solar policies across the U.S. In addition, SEIA partner Solar-Estimate.org has a page that lets you search for local rebates and incentives that might be available in your area.
Conclusion:
Navigating the commercial solar market in 2024 requires a blend of strategic planning and market understanding. By focusing on the right project sizes and sectors and considering factors such as decision-maker accessibility, sales cycle length, ROI, market trends, project feasibility, and geographical influences, solar businesses can position themselves for successful ventures in this growing field.
