Study Shows National Solar Installers Price 10 Percent Higher Than Local Firms

A recent study from the National Renewable Energy Laboratory (NREL) found that large solar installer (those that installed more than 1,000 systems in any year from 2013 to 2015) quotes were $0.33/W higher (or 10 percent) than non-large installer quotes offered to the same customer. Large installers offered a higher quote price than a corresponding non-large installer in about 70 percent of pairings. The NREL study is unique in that it uses price quote data versus installed pricing data in order to compare quotes offered to the exact same customer. The study concluded that customers could benefit from obtaining more quotes before deciding to install a system. Drivers of Cost of Solar Difference Between National and Local Solar Firms The study offered several hypotheses on why the pricing difference exists. Large installers may bid higher prices due to imperfect competition in the customer quote collection process. Customers may also attribute benefits to large installers (perceived or real), including higher quality or trustworthiness, or large installers may offer superior warranties or inverter replacement terms. Large installers may also have customer acquisition scale advantages, although Telsa and other large firms recently announced a reduction in acquisition spending. This reduction in spending is likely a key driver to the estimated 41 percent decline in solar in California in the first quarter of 2017. Below is a summary of pricing behavioral differences between large and small firms from the study.