"cheap and fairly easy to install" (was ground fault) [RE-wrenches]

Pat Redgate solarpro at aol.com
Sat Nov 16 11:37:53 PST 2002


Joel: 

Actually the installed per kW price seemed to be dropping (per CEC) until 
last year.  I know that our installed/watt price has dropped by 15% or more 
over the last two years and now I find myself buying in bulk to further lower 
my costs.  But I think the increases that the CEC is witnessing has more to 
do with the simple matter of supply vs demand and the inexorable entry of 
high profile marketing ventures (HVAC companies and GCs) with their attendant 
marketing and commission costs.  At the end of the last solar bubble (in 
California) HVAC and marketing firms were accounting for more than fifty 
percent of the dhw market and their closed lead costs were nearly $2,000 and 
commissions ranged from 10 to 20%.  These firms were offering hot water 
system for $10K at a time when the average price for a dhw system installed 
by our firm was $4K.  If a 2 kW grid tie system can be installed for $18,000 
a good salesman will find a way to gather another 10% commission (at least) 
and a boiler room/direct mail add campaign can pump up overhead by another 
10% (easily).  At 22K it would seem there would be enough money for everyone, 
but Disney economics take over: the market will be charged whatever it will 
bear. In fact, the reason the ranks of PV companies have become so swollen 
(seen the CEC list lately?) is for this one very simple reason -- money.  The 
behavior of the California CEC aggravates the situation by stoking the 
fire-sale mentality by precipitously truncating programs.  Deadline frenzy 
can raise prices to astounding heights. 
If (when) the port union strikes (is locked out) again, just watch what 
happens to pricing.

Oh, if only bureaucrats just understood business!


Patrick A. Redgate
AMECO
Long Beach, CA
(562) 595-9570
www.amecosolar.com

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