Consolidation and scale are the buzzwords in the solar component manufacturing world today as companies fight the impact of falling costs. But in the assembly and installation parts of the supply chain, the US industry is showing signs of fragmentation.
As traditional contractors retrain to green standards and chase increased demand for small-scale and domestic solar installations, many are taking market share from larger installers even as the total number of installations climbs. A new company freshly arrived from the world’s largest solar market, Germany, has landed on US shores to bring clarity to what it says is an American solar industry teetering on the brink of market maturation.
Parts of its website are still only available in German, but pvXchange is preparing to make a splash in the market for buying and selling solar photovoltaic components in the US. The company offers an online platform for trading components that can appeal to both experts and quickly-trained construction foreman looking to purchase solar equipment to install on local roofs.
“Procurement is a necessary evil for these guys,” pvXchange Business Director for North America Scott Mueller told Breaking Energy recently.
The company’s goal is to provide “simplification, clarification and stability” to buyers and sellers in the US solar market.
The Market
Rising volume and falling prices have complicated growth comparisons, but its fair to say that pvXchange is a market leader in components trading in Europe, and General Manager for North America Elliott Gansner says it is the only one of its kind. The firm, founded in 2004, reported 2300 trades worth roughly 320 million euro ($400 million) on its online platform last year.
The system anonymously pairs buyers and sellers of name-brand components, with technical details offered. For now all trades are bilateral and on the spot market.
The pvXchange system has a vetting system for trading participants and in Germany has relied on a membership system that includes business identification numbers. A marketplace membership team is in place to check component offers and vet details.
With data security in online systems a huge open question for both the energy and the financial industries, pvXchange’s Gansner says the company is prepared with extensive data security already in place.
“Data privacy is a massive issue culturally in Germany,” and that means the company has put in place strong data security systems that it expects to leverage as it builds its US business.
Of Distributed Importance
Expanding use of distributed generation, in which solar panels are placed on houses and businesses by local and smaller-scale installers, is central to pvXchange’s business model. The US solar business is currently dominated by large utility-scale installations that adhere to the US traditional model of “hub-and-spoke” generation and consumption.
Distributed generation does not have to mean reduced reliability, Gansner said, and as the electricity market moves to one that rewards increasingly varied and dispersed generation sources companies like pvXchange should benefit.
For more on the economics of the solar industry read Breaking Energy’s solar coverage.
Photo Caption: BERLIN – APRIL 30: Solar panels are installed on the rooftop of an apartment building on April 30, 2010 in Berlin, Germany. Germany has invested heavily in solar and other renewable energy sources and is seeking to produce 30% of its energy needs with renewables by 2020. (Photo by Andreas Rentz/Getty Images)
