Recently, I sat down with Michael Barnard to discuss how software and new business models are making an impact on the commercial solar market for an article published in CleanTechnica.
We discussed the implications for commercial solar with the decrease in the U.S. Solar Investment Tax Credit at the end of this year. The ITC is set to decline from 30% to 26% in 2020, followed by a decline to 22% in 2021 and then 10% in 2022. The ITC has been extended in the past and a new solar ITC extension bill was introduced in Congress this summer, but even if it passes this time, it still needs to be signed by the fossil-fuel friendly Trump administration.
“Soft Costs” Need to Come Down to Sustain Momentum
With the reduction in the solar tax credit on the horizon, bring system costs down is important to maintain the momentum gained. Over the last decade, hardware costs have decreased steeply and with payback periods as short as 4 years, installations of grown. Now, to maintain favorable economics, solar providers need to trim the ‘soft costs’ which can make up as much as a third of the cost of a system. Most people are surprised to learn that hardware is now just 35% of the cost of the system, so the biggest opportunities to bring down costs will come from efficiencies in other areas like marketing, sales, design, and proposal development.
AI is the Answer
OnSwitch’s answer to reduce soft costs is an AI solution designed by experienced solar project developers and software experts. Instead of on-site visits, OnSwitch’s SkyQuote uses high definition aerial imagery to automatically map the roof and generate the solar design. The AI is highly accurate and gets smarter with each building rooftop mapping. The result is a fast, scalable, and automated system that can generate hundreds of building quotes daily.
Lower Costs, Faster Process
With SkyQuote, OnSwitch’s costs are significantly lower, enabling 10-15% lower prices on high quality systems. The overall process is also much faster and easier with contract-ready proposals produced in minutes using just an address and an aerial image.
For companies managing multiple buildings, the time and cost savings are significant. Instead of bidding dozens of projects over months, the SkyQuote system enables energy buyers to enter addresses and get pricing and payback analysis in a few days. With that visibility, our customers have been able to secure budgets and move faster to plan and execute solar projects.
Interested in how OnSwitch can help your organization? Get in touch.