Solar distributors: What you need to know

For most solar consumers, solar distributors are (and will continue to be) a largely hidden part of the value chain: When you receive quotes from local or national installers on EnergySage, you can compare different types of equipment from other manufacturers. But where do the installers—the companies that provide quotes via EnergySage—get the necessary equipment to complete your solar installation? In many cases, the answer is a solar distributor.

Solar panels can take many different paths to find their way onto your rooftop, but we've included a relatively simplified illustration below, highlighting the primary functions of manufacturers, distributors, and installers.

Value chain example: Residential rooftop solar

Distributors play a critical role in the solar industry by helping the right solar solution get to the right installer at the right time. For instance, a solar distributor can alleviate the need for individual solar installers to carry large amounts of equipment inventory. Instead, solar contractors can wait to purchase the necessary equipment until a homeowner moves forward with a project. This helps drive down carrying costs for installers–e.g., less of a need to own and operate their own warehouse & distribution center for solar equipment–which means lower prices for you.

Major solar distributors sell to all segments of solar installers: residential installers, commercial installers, and utility-focused entities. Some of the biggest distributors in the US include, but are not limited to:

• BayWa r.e.: Munich-based company focused on agriculture and energy; provides solar products and services across the spectrum (and worldwide)—leading solar distributor in North America and worldwide.

• Wesco: publicly-traded company on the NYSE. Headquartered in Pittsburgh, PA, it provides products across several categories, including inverters, racking, solar modules, and 'balance of system' equipment (Editor's note: balance of system (or BOS) equipment is a catch-all category for things you need for your solar panel's systems like cables, copper wiring, and end caps for racking, that aren't included in other equipment categories.). It also offers its customers value-added services, such as supply chain optimization, inventory management, and sourcing.

• CED Greentech: one of the largest distributors in the U.S., Headquartered in San Diego, CA, and part of the Consolidated Electrical Distributors (CED) company. Helps its customers design, finance, sell, and install solar PV and energy storage solutions.

In the early stages of solar in North America, solar distributors often occupied a clearly defined niche within the industry: purchase, house, distribute inventory...repeat. As the solar industry has matured, however, distributors have evolved to meet the changing needs of solar installers. Today, many distributors have expanded their offerings -- seeking to stand out in new ways (beyond just, you know, storing and distributing inventory). These services range from solar panel system design to supply chain management, financing, and information management.

In addition, distributors in adjacent markets (such as electricity distribution) have started entering the solar market -- increasing competition for established industry veterans. And in recent years, distributors have also grown significantly through acquisition – with players like Baywa, Wesco, and others scooping up numerous companies in myriad deals (some smaller, some larger).

The bottom line for you? It is unlikely you'll know the name of your solar distributor. Still, the distributor your solar installer works with will undoubtedly influence the eventual solar energy solution you select for your home or business, especially the price you pay. To see the cost of different potential solar solutions to meet your needs, get started with a free account on EnergySage today! You'll receive custom quotes from installers in your area without the hassle of having to find and call those installers on your own. When you get quotes, ask your installer who their distributor is – and let us know what you find out in the comments below!