The role of electrical distributors in the solar industry in 2012 and beyond
Posted on January 11, 2012 by Hector Tantoh in Articles

The solar industry kicks off 2012 with lots of momentum and cause for celebration from 2011.  The third quarter of 2011 was a record year for the US Solar industry, and as Q4 numbers will hopefully confirm, 2011 marked another record year for the US solar industry. 

However, even the most casual observers of the industry know that there is a lot of lingering uncertainty moving into 2012, stemming from events that happened in 2011.  One hugely popular story that still gets a lot of coverage, much to the chagrin of many people in the industry, is Solyndra.  With 2012 being an election year and the political tones surrounding Solyndra, we undoubtedly have not heard the last of it.  Another lingering issue from 2011 is the expiration of the 1603 grant, and its implications to the market in 2012.  Finally, there is the issue of the anti-dumping lawsuit filed by the SolarWorld led Coalition for American Solar Manufacturing (CASM). 

So what’s a manufacturer to do? How do you navigate these obstacles to make sure you are around long enough to see what most people still agree will be the largest solar market in the world?  It’s anyone’s guess as to how these issues will affect the industry, especially in the short term.

As an employee of a distribution company, I am particularly interested in the go-to-market and channel strategies of the manufacturers and how this will evolve over time.  I obviously believe that national electrical distributors, like WESCO, add tremendous value to both manufacturers and end users because of our expanded branch network, relationships with complementary manufacturers, sales force, and balance of system offerings, to name a few.  Over the past several years, the solar industry has evolved from extremely niche markets and distributors to a national network of manufacturers, installers, distributors, and financiers. 

However, unlike a lot of other more mature industries, a good amount of business is still done direct in this industry, and business common sense tells us that as an industry grows and manufacturers focus on quality and production costs, a direct business model is not sustainable.  Both manufacturers and distributors understand this, and if you attended Greenbuild, Solar Power International, or any other major solar show in 2011, hopefully you saw WESCO had a booth present, and so did other major national electrical distributors.  So the question to ask then is how long will both parties keep courting each other? What is the tipping point where more business goes through distribution, especially national electrical distributors? Is the uncertainty in the market going to be a catalyst for strategic and accelerated channel strategy, or are we going to see another year of lukewarm attempts of partnering with national electrical distributors (while a lot of major project business still goes direct)?  What do both manufacturers and national distributors need to do to facilitate this process? There is a lot happening in the world of solar these days and we’d like to hear your feedback/input on here or via twitter (@wescorenewables).

Hector Tantoh,
Marketing Manager, Renewable Products
WESCO Distribution, Inc.

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