Why Solar Power Developers Are Stockpiling Panels | Why You Should Be Stocking Up on Solar Panels

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September 12, 2019 | By RGR Marketing Blog

Federal Tax Subsidies Are Going to Be Ending

Next year, the 30% federal tax credit for solar is scheduled to start being phased out. This is causing solar developers across the county to purchase panels in large supplies. Should you be following suit?

Why Buying Solar Panels Now Is a Good Idea

For a solar company to qualify for the full subsidy, they need to either start construction or spend 5% of a project’s capital cost by the end of 2019. This means that solar installers and customers can be eligible for the full tax credit this year if they purchase solar this year, despite the fact that the systems may not go online for years.

One company, North Carolina-based Duke Energy, is planning on claiming the maximum credit on as much as 2 gigawatts worth of panels. That’s enough panels to power 380,000 homes. The company is confident in its investment because it believes customers are out there and that they’ll eventually find them.

According to Chris Fallon, Duke Energy’s renewable energy vice president, “We know there will be customers out there, we just don’t know who those customers are yet.” Having the panels pre-purchased will provide the company with the inventory it needs for future projects, while allowing it to take advantage of the tax credits before they dry up.

20% of U.S. Solar Demand Is Driven by Tax Credits

According to Chinese solar manufacturer Trina Solar, it is estimated that roughly 20% of the demand for solar panels in the United States is being driven by tax credits. Developers are buying solar panels in such high numbers that Trina Solar has actually pre-sold out their entire production of panels throughout the first quarter of next year.

In fact, Wood Mackenzie, a natural resources and energy consulting company in Annapolis, Maryland predicts that solar developers will stockpile approximately 31.2 gigawatts of U.S. solar installations, nearly $30 billion of investment in coming years to maximize their tax credits. Of course, nothing is ever a sure thing, so there is risk involved in adopting this strategy.

The Risk of Stockpiling Solar Panels

Any time you pre-purchase materials, there’s a risk that something could happen that will result in the inventory being unusable. For instance, if solar demand weakens in the United States, or if technology advances at such a pace that current panels rapidly become outdated (which is a possibility in solar), an installer could find themselves with a lot of inventory that is impossible to offload.

Another concern is that panel manufacturers know there’s a rush for inventory, so they’re pricing their panels at a premium. Most modules are priced 10% higher now than they were earlier in the year. This is a change of pace, as solar prices have seen steady declines in recent years thanks to technological improvements in efficiency and more affordable Asian imports being made available. As the tax credit deadline looms larger, you can expect prices to continue to be inflated.

So Should Solar Installation Companies Be Purchasing Solar Panels Now?

The decision to stockpile solar panels to take advantage of the tax credits is a compelling one, but it does come with a few risks. This is a decision that must be carefully considered and not made hastily.

Yes, you can save money with the tax credits, but how much will you really save if you are paying premium prices on the panels? Are you confident that you will have customers to sell the panels to before those panels become obsolete? These are the questions you need to answer before placing any substantial solar panel orders.

Get the Customers You Need With Solar Leads From RGR Marketing

Having a supply of prospects is important for any solar installer because you need customers in every stage of your sales funnel to ensure future growth. At RGR Marketing, we have over two decades of experience providing solar installers with the high-quality solar leads they need to keep their sales teams busy.

Our leads are validated and verified and can help you grow your solar business. Give us a try today and see your lead conversion rates rise. With RGR Marketing, you can always have pursuable prospects and profitable clients in your sales funnel.

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Federal Tax Subsidies Are Going to Be Ending

Why Buying Solar Panels Now Is a Good Idea

20% of U.S. Solar Demand Is Driven by Tax Credits

The Risk of Stockpiling Solar Panels

So Should Solar Installation Companies Be Purchasing Solar Panels Now?

Get the Customers You Need With Solar Leads From RGR Marketing

Start making more
money today!

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Federal Tax Subsidies Are Going to Be Ending

Why Buying Solar Panels Now Is a Good Idea

20% of U.S. Solar Demand Is Driven by Tax Credits

The Risk of Stockpiling Solar Panels

So Should Solar Installation Companies Be Purchasing Solar Panels Now?

Get the Customers You Need With Solar Leads From RGR Marketing

Start making more money today!

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