US Solar Installers Continue To Get Snapped Up

Implications: Despite trepidations over the lapsing of US federal incentives, the domestic photovoltaic market continues to consolidate to take advantage of better economy of scale.  Photovoltaic installations in the US now number over 10,000 a year, growth that will continue to increase once new federal incentives are in place in 2009.  This consolidation will continue with publicly held companies like Real Goods as well as many privately held ones.

Analysis: Real Goods Trading Company (RSOL), best know for its online and paper catalog selling all manner of green products, is also building up its ability to install solar energy systems as well as promote and sell the products.  The latest acquisition is a company that does close to a megawatt a year of installations, translating to several hundred homes.

The terms "solar integrator" may include anything from a couple of guys with a pickup truck up to a Conergy or SunEdison.  Within the solar industry patois, an photovoltaic integrator can also arrange the financing of the system as well as the physical installation.  This is one of the prime factors of what will encourage the consolidation of the solar installation industry, one that will include solar heating as well as electric systems, and branch out to other "alternative" energy sources, like wind and biofuel.

Acquisitions of installers or integrators continuing in the U.S. is a sign that the industry expects the likely lapse of federal incentives after December 31, 2008 (barring a legislative miracle) to be more of a nuisance than a catastrophe.  It is expected that whoever is in the White house will propose restoration and improvement of solar and wind power incentives, and the measure will pass a new Congress minus a few of the neanderthal opponents who either retired, were defeated or indicted during 2008.

The new incentives, liable to be retroactive to January 1, could go in as soon as March.  If it's dragged out to June or later, that could cause problems for solar and wind power companies that are too small, weak or poorly managed to survive.  Nevertheless, industry consolidation will continue, and not just at the integrator end.  For integrators, the market is promising.  There are over 40,000 photovoltaic systems connected to the grid in the U.S., over 12,000 installed in 2007 alone, according to the Interstate Renewable Energy Council. 

This year alone may see anywhere from 17 to 20,000 new installations, depending on the mad dash to complete systems by the end of the year.  Besides California and New Jersey, significant markets have opened up in the Rocky Mountain, other Mid Atlantic, and New England States.  We are also on the verge of seeing major solar activity finally occur in the Great Lakes and Southeastern states as well.