Recently, Jonathan Doochin, CEO of Soligent, was hosted by Piper Sandler for an engaging discussion revolving around the crosscurrents of opportunities and threats facing the US distributed solar industry. The discussion supported the view that resi demand remains robust; however, the increasingly complex supply-chain environment and risk of regulatory snafus have the potential to adversely impact the industry through further inflation and/or component shortages.
As a Key Opinion Leader, Jonathan Doochin gave his honest thoughts on where the Solar Distribution Market is now and how it is pivoting through all the supply shifts.
Jonathan believes demand remains attractive due to the installers growth of about 20-40% annually. Growth is typically back-end weighted and Q3 was strong relative to Q2. Jonathan indicated that the industry is growing in lower cost markets (TX, FL, NV). Demand in these regions appears to be driven by a desire for energy independence due to the frequency of tumultuous weather events. Ordinarily, Q4 deployments would exceed Q3 but supply chains are currently more complex than usual.
Jonathan shared his insight on the topic we are all being affected by – Supply Chains. Supply Chains remain challenging… as ports are clogged and modules are still being seized due to the Withhold Release Order (WRO) because manufacturers may not have sufficient documentation all the way upstream to the metallurgical grade silicon level. More recently, power rationing by the Chinese, who are attempting to secure sufficient inventories of thermal reserves before winter, has the potential to cause further dislocations across the global value chain. As it pertains to solar specifically, Polysilicon prices are rising again (+17% in 2 weeks) and >96% of ingot/wafer manufacturing capacity exists within China. Accordingly, further power rationing could fuel additional inflation or shortages. Finally, labor costs are rising and will probably be sticky. Jonathan believes resi is better equipped to navigate inflationary pressures (vs. utility scale) due to stronger margins.
As the climate of the solar market continues to change and evolve, Soligent is prepared to adapt accordingly. Jonathan had a great opportunity to do more of a thorough analysis on where demand and supply chain reside in today’s market. We look forward to continued success navigating through all the waves the market has in store for us. Have a great month everyone!