Tennessee contractor pivots to residential storage after incentives expire
It is a time of great transition in the solar industry. Many contractors who have long taken advantage of incentives or rebates for measuring nets find their state reworking those programs or ditching them altogether. One Top Solar Contractor had to overhaul its residential business model to accommodate changing regulations in Tennessee.
in 2018, LightWave Solar (No. 177 on the list of the best solar contractors of 2022) realized that the state’s feed-in tariff, which gave solar installations a reasonable payback despite Tennessee’s generally low energy costs, would be cleared by the end of 2019. The team knew it had to change its living activities or risk losing it.
“There is no return on investment anymore,” said Chris Koczaja, CEO of Light wave Solar. “We saw the end, so we started figuring out, ‘How are we going to do the next?’ Without grid measurement, without program, what will that look like?”
The answer to those questions was a pivot in energy storage. Instead of using the ROI of solar installations as the main selling point for residential projects, LightWave learned how to sell and design systems based on the need for resilience. It was not difficult for customers to understand as the deteriorating climate and other disasters wreaked havoc in their area.
“In the last four years we had a tornado that went through downtown Nashville, we had derecho winds, straight winds came through like two months later, we’ve had a flood, we’ve had a bombing in downtown [Nashville] and we’ve had an ice storm,’ Koczaja said. “Our customers see the value of resilience.”
When the company learned that the solar incentive was about to end, LightWave immediately set to work identifying potential storage users in its existing customer base and figuring out how to sell, design, and install these new systems. The company has always focused on custom projects, meaning installation timelines ranged from one day for solar only to up to a week for solar with storage.
“These are now insanely complicated microgrid systems,” Koczaja said. “There’s just a lot more equipment to install now and find places and interconnect.”
Despite the changing workload, these new systems are double the price of solar power alone, so the business can remain profitable. LightWave now estimates that 99% of installed systems are linked to storage.
But higher prices and a payback period of more than 20 years mean that solar energy is even more expensive for those with less income.
“Have our customers changed in the past two years? Yes. It is somewhat regressive. Our customers are richer because the systems are expensive’, says Koczaja.
However, he doesn’t expect it to stay that way for long. Through his work as president of the Tennessee Solar Energy Industries Association, Koczaja pushes for a good appreciation of storage systems by utilities and the benefits they bring to the grid.
“I have all these great tools installed now. How can we use them to help with grid congestion, voltage support, everything else out there?” he said.
Even without utility discounts, energy prices are likely to rise and solar + storage systems will become more efficient over time. And the proliferation of electric vehicles could drastically change the electric needs of homes in the coming years, with many Americans trading a gas bill for a higher electric bill from home charging.
All these factors will make solar + storage a sound economic decision rather than just based on resilience.
“Instead of solar power being just supply… we are now moving into demand management for solar power + storage. With the tools at your disposal, you can start managing your requirements,” says Koczaja.
He expects that homeowners will be more interested in their own energy consumption at home thanks to the growing number of tools available to monitor and regulate this. Whether it’s a odometer on a vehicle or a solar and storage monitoring app, saving energy and money just got easier.
“This monitoring app is becoming an addiction. In a year’s time we will have a club here for ‘Monitoring App Anonymous’”, said Koczaja.
While there is a promising path ahead for solar, storage and demand management, it is not an easy shift for early adopters. But the pioneering work of companies like LightWave will light the way for others to follow.
“We made the change, but it will be easier for others to change because the tools, the products, everything will be better if they have to make the change. But it’s a very difficult whole mindset change,” Koczaja said.
This story was featured exclusively in our issue 2022 Top Solar Contractors. Check out the issue and full list of best solar installers in the US here.