Retailers look to cash in as solar power prices plunge

Mar 13, 2014

According to a recent New York Times article written by Nancy Folbre, professor emerita of economics at the University of Massachusetts, Amherst, the price of solar panels has dropped some 60 percent over the past three years and the cost of producing solar energy is now as cheap, if not cheaper, than the cost of energy from nuclear power plants. So while renewable energy has had its critics, it appears that solar is becoming “a powerful environmental and economic success story.”

While 62 percent of American homeowners are interested in solar power for their residences, fewer than half realize that products have become much more affordable, according to SolarCity, the largest provider of residential solar systems in the U.S. Today, there are fewer than half a million household rooftops with photovoltaic installations, leaving about 74.5 million residential opportunities in the U.S.

Home improvement retailers were among the first to see the potential of solar. Home Depot, Lowe’s and Menards all sell solar panels and offer access to installation services online and in stores.

Yesterday, Best Buy became the first large consumer electronics chain to get into selling solar with an announcement that SolarCity would offer its services at 60 of the retailer’s locations in Arizona, California, Hawaii, New York and Oregon.

As a special promotion, SolarCity will give new customers it picks up through Best Buy a $100 gift card valid on any purchase made in the store.

Do you see the residential market for solar power opening up in the next several years? What are the keys to success for retailers looking to take advantage of the solar opportunity going forward?

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13 Comments on "Retailers look to cash in as solar power prices plunge"

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Paula Rosenblum

I see it happening more and more. In St Croix, subsidized houses are already being built with panels on the roof. My condo association is putting them on top of our building there as well.

I’d do it in my house in Miami, but it’s unclear to me that the panels would survive a hurricane…so I’ll wait. But heck, at $300 a month for power, using our primary resource here seems like a great idea.

Ian Percy

“Going solar” requires a huge change in mindset. That is a bigger problem by far than the cost and ROI factor. You’d think here in Arizona the whole state would be run by the sun…but hardly any of it is.

“Why not?” is the question. Of course the price/benefit has to be right. I think the bigger issue for domestic application is the fact that solar panels are just plain ugly. Just look at the picture provided here. If it’s not pretty we just don’t want it. Look at the issue with light bulbs.

With wind power there are very attractive and fascinating ways to get something twirling to generate power. Some are so creative and beautiful you’d want them on your property or attached to your building even if they didn’t do anything. The domestic future of solar power will be owned by the company that makes solar collectors that look like roof tiles or sculptures – or at least futuristic. Right now panels look like they came from the early industrial age of factories and smelters. What collects the heat has to look cool.

Max Goldberg

As the price of solar panel decreases, the opportunity for consumers to take advantage of this energy source increases. I installed solar a year ago and love watching my electric meter spin backwards. My electric car is powered for free by the sun.

Retailers are wise to look into offering solar to customers. By doing this, retailers help educate consumers about the benefits of solar, if retail employees are trained to articulate the pros and cons of solar systems. Retailers also need to partner with reputable, reliable solar providers.

Going solar is not simple and easy. Dealing with local electric companies is a time consuming test of patience. Retailers need to prepare their customers for the process or risk upsetting customers and potentially losing their business going forward.

Carol Spieckerman

Best Buy is smart to get ahead of this in the same way that Google’s purchase of Nest Labs makes sense. Retailers have a window of opportunity to get on the ground floor of total home solutions, the internet of things and the energy sources that will power all of it.

Brian Hart
Brian Hart
3 years 6 months ago

I investigated solar power for my home, responding to a direct mail I received. I learned that the panels on my roof wouldn’t power my home but rather the energy be sold to the grid. They may be okay…I can adjust my thinking to that, but I was hoping to also be able to power my home when my town loses power during storms…and this method doesn’t cover that at all. BTW, I live in Massachusetts.

Gene Detroyer

I may not remember the time frame exactly, but 10 or 15 years ago solar panels converted only 3% of the energy provided by the sun. Today they convert 29%. I am no scientist, but it would be hard to imagine them not reaching an efficiency of 80% to 90% in another five or ten years.

For retailers, with huge flat roofs, it will simply be a dollar and cents issue. I don’t see anything stopping it.

It may take longer in the residential market, but it will ultimately be driven by new construction that integrates solar into the homes proving it out. Once solar becomes “acceptable,” it will create a landslide of conversion.

Ben Ball

Solar ain’t (that) simple, as I’ve learned in experimenting in mountainous terrain with a cabin on a north facing slope. But it certainly is interesting.

Wind and small-scale hydro installations are also attractive, as Ian points out. And I totally agree with him on the need for aesthetic as well as economic acceptance. We just made the decision to substitute a working water wheel installation for the waterfall we were planning to aerate our trout pond. The period correct design we chose should look even better than the waterfall, and will generate plenty of electricity to run lights and appliances for the cabin.

Getting back to business, alternative energy is no different than any other shift in consumption of a fundamental commodity. Early adopters do it because they believe in, and can afford, “doing the right thing.” People in general do it when it becomes a more attractive alternative than the current standard. Where we most often go astray is in trying to artificially alter the market pricing of any alternative, whether through taxation or subsidy.

gordon arnold
Lower investment costs as a result of production efficiency, lower material costs and improved installation materials and methods do not necessarily mean residential and light commercial solar systems are more affordable. Affordability is a collection of user defined relevant data used to support an abstract conclusion or opinion of an investment. What makes this sale even more difficult is the lower number of potential investors with the ability to provide for the sizable front-end sunk costs along with what looks like a 20 year car payment. Compounding the decision processes even further is the average homeowner’s ability to comprehend a long term investment deal when they continue to structure their economy based on week to week expenditures without a crisis or future needs reserve. Then there is the little matter of the number of solar energy companies that have simply vanished leaving their investors high and dry. This is a huge part of the lowering interest levels. Finally, there are still many members of society that do not understand the costs incurred by big oil, gas and electric to produce consumer brand energy products. After 8+ years of rising prices they somehow think energy costs are falsely inflated and will… Read more »
James Tenser
Residential solar systems keep getting lots of attention in the media. Meanwhile a few major utility companies crow about their forays into commercial-scale solar farms spread over acres of desert. Another very large opportunity is to install photovoltaics on existing commercial structures – especially retail stores, malls, distribution centers and parking structures. A typical supermarket has 50,000 square feet of roof space; a supercenter, 250,000. A typical D.C. has 1 million square feet of roof space. Even if only half the surface is available for panels – well just add it up The opportunity is obvious: First, the system meets all or most of the peak daytime power load for the building itself, taking pressure of the grid. Second, any excess power can be sold back to the grid. Third, the panel installation actually shades the building, lowering A/C load. Fourth, the retailer locks down projected energy costs for decades at each installed location. Large scale commercial installations would help lower the cost of panels for all, by scaling up manufacturing and drawing greater investment and competition. It would create high-quality technician and manufacturing jobs in both PV and power storage technology. Retail chains have a heroic role to play… Read more »
Ed Dunn
3 years 6 months ago

Solar Power may be cheap, but it all leads to “battery banking” which is the core of alternative energy. Retailers should look at various business models and channels already practiced in emerging markets:

  • solar powered shipping containers recycled to be a pop-up store or station.
  • solar powered mobile device charging stations for customers.
  • solar powered LED lightning systems for fixtures and window display.
  • solar powered outdoor signage using EL lighting effects.
Craig Sundstrom

The (other) question here, of course, is how will RETAILERS take advantage? I’m not sure if the reference is to selling solar or using it themselves, but regardless, I’m not yet ready to jump on the bandwagon…I just don’t see that many people eager to become DIY utilities, and I think the recent surge in gas production will forestall people from “seeing the light” of solar – so to speak – for a few more decades.

Tom Borg
Tom Borg
3 years 6 months ago

Four things must be present:
1. Easy to switch over to.
2. Convenient to use.
3. Cost less than they are presently paying for the electric or natural gas fuel sources.
4. Cost very little to purchase the equipment and have installed or recoup investment of purchase of installation within 1- 3 years.

Lee Peterson

Given how long it’s taken for electric cars, healthy food, climate change recognition, stem cell research, etc. to be accepted as science-based facts that are beneficial for ALL humans vs “liberal” issues, it could take a while. Which is beyond me…but since I’m over 40, I’ve learned to live with a lot more bizarre reactions than those over the years. My personal vision is to have my house completely solar so I can plug my car in at home — off the grid in 2 years. Let the doubters keep going to the gas station and AEP.


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