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HOW TO REDUCE LABOR & SOFT COSTS IN SOLAR INSTALLATIONSA Guide for Solar Contractors

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STATE OF THE INDUSTRYToday’s solar energy market presents tremendous opportunity and unique challenges for solar energy contractors. Clean energy represents the fastest growing industry in multiple states, and the U.S. Bureau of Labor named solar installer as the fastest growing occupation in America. While there’s been a boom in both commercial and residential projects, increased competition has thinned margins, meaning business leaders need to be more efficient than ever in how they allocate resources, particularly when it comes to labor. By taking a thoughtful approach that maximizes revenue-generating talent and minimizes disruptions to your internal operations, solar energy contractors can gain an edge on the competition.

With the increase in the market, the labor pool hasn’t kept up. Trade schools can’t turn out qualified graduates fast enough, so there is currently a significant shortage of the skilled labor needed to meet the demand for solar energy projects. Lack of standardized regulations can create challenges in licensing requirements across state lines, in addition to a labor shortage in the trades.

Previously, market immaturity left contractors with disparate choices in suppliers. Both manufacturers and resellers struggled to find a stable foothold and many went out of business. But as the industry has stabilized and commercial adoption has taken place, the price of materials has tapered. Total cost per watt install has dropped. So now contractors have to look harder at their soft costs in order to stay competitive. All of these factors mean that it is extremely important for contractors to be mindful of how they’re allocating resources and reconsider their approach to labor. Here are some ways you can cut labor costs and save time on solar energy installation projects.

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FINDING EFFICIENCIES IN YOUR OPERATIONGetting the most out of your labor force is about more than labor management. It’s about recognizing opportunity costs and making smart decisions in all areas of your business. It means you may need to reconsider how you approach some core business processes in order to make the most efficient possible use of your resources. Some common opportunities for increased operational efficiency include:

PURCHASING

Purchasing directly from manufacturers comes at a cost of being committed to standard package quantities, often resulting in overages and excess stock. Often, contractors will choose to buy their products and materials directly from manufacturers or online resellers. This can provide some upfront savings, but it also means your staff is now responsible for managing multiple

shipments and, potentially, inventory. You may need to source materials from multiple suppliers for a single job, so you will need to allocate significant resources to supplier relations and order management instead of to more important revenue-generating roles.

RECEIVING

It’s also safe to say that just about every contractor in the industry has spent time on a job site waiting for product to be delivered. So even if you develop an efficient purchasing process, if there’s an issue with materials not showing up on site, it will be up to your employees to figure out what went wrong and remedy the situation. The time it takes to resolve the issue is time not spent on more important tasks that could be generating revenue. To avoid this problem, consider working with a full-service distributor that can monitor your orders and eliminate the administrative burden that comes with sourcing materials directly. You can save money on your office labor and put those resources to better use hiring installers and other specialists.

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Whenever your materials do arrive, you’ll of course need someone to receive them. But the amount of money you allocate for these individuals depends on how you’ve structured your business. If you’re buying materials directly from the manufacturer or an online reseller, you’ll need more people to handle the shipments. This means you’ll be allocating more resources to warehouse employees instead of revenue generators in the field.

Instead, consider working with a distributor that can break down modules and kit your materials so you can reduce time on site. This simple change in approach can help you save on labor costs throughout every stage of the project.

EQUIPMENT AND TRANSPORTATION

One way to minimize your labor costs is to minimize the number of truck rolls it takes to get everything to your job site. The more semi-trucks, flatbeds, trailers and other heavy equipment that comes onto site, the more likely it is that the site will begin to erode. Not only could the degradation of site conditions delay or stop labor, it could make it difficult to get the heavy equipment off of the site for the next job.

Transportation logistics is a learned trade and in many circumstances, without thoughtful scheduling of the deliveries, you could end up with everything arriving at the same time, creating a logjam that forces costly delays. So, it’s important to plan out when and how everything will be delivered to the site. Consider working with a distributor that has experience in project management, and provides staging services and delivery capabilities, such as flatbed trailers and piggybacks.

WAREHOUSING

Buying materials direct from manufacturers or online resellers can represent a savings up front. But you need to consider what that means for your warehouse costs. If you’re buying materials in bulk to increase your margins, that may mean that you need a storage facility three or four times larger than if you purchased them on a per-project basis through a distributor. In other words, you may be saving on the product up front, but storage costs alone could easily wipe out those savings. Reconsider all of your storage costs to see if a different approach could lead to increased savings.

ADVANCE SITE PREP

If the proper site prep is not completed before your crew arrives, you’re going to be wasting money. It’s as simple as that. You want to make sure that your team can start working as soon as they get there, so it’s important site prep is managed correctly.

If your employees aren’t properly trained on how to work with solar material, you could end up with a high rate of product breakage. Every broken solar panel is money out of your pocket. So rather than spending additional resources training warehouse staff, consider purchasing materials from an experienced distributor that knows how to handle unique products. Some distributors have specialized equipment that can gently maneuver large shipments of solar panels to reduce the likelihood of broken parts.

CONSIDER THIS AS WELL:

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If you are installing a roof mount system, take into account in advance any potential ballast, such as pea gravel, or you could end up paying for your highly skilled labor to rake rocks. Also be sure that scaffolding is in place so you can get straight to work once on site. For greenfield installations, talk to your customer about the possibility of planting cover crops the season before your scheduled installation. This will help you avoid overly muddy work sites that can delay projects. Also be sure that the site is graded and surveyed properly well in advance of installation.

In preparing for your installation, you also need to consider security concerns. Theft of tools or materials can impact your budget and delay your timeline. So be sure that any fencing, cameras, locks and other security measures are accounted for prior to starting the installation process.

COMMISSIONING AND REMOTE TROUBLE SHOOTING

When it comes time to commission your new system and complete the project, the last thing you want is a delay. If you’re installing new technology that your crew has little experience with, you could easily run into an issue where the system malfunctions or throws a code you don’t know how to handle. If you don’t have the right support, you could be left struggling to reach the product manufacturer or spend valuable trouble shooting time. Those delays cost money.

Many modern solar systems can be commissioned remotely, and inverters, controls and reporting systems can be programmed in advance. This will not only save time on-site, but reduce the number of truck rolls from specialists coming out to commission the system. Consider working with a manufacturer or distribution partner that has expertise in this area and can help you avoid any costly delays.

PREFABRICATION The more work you can do before you get to the site, the less time you’ll be paying for expensive labor in the field. Consider allocating more resources for prefabrication to reduce time on site. Prefabrication activities can run the gamut, including pre-cutting wire to meet specs, ordering pre-assembled racking materials, buying kitted home runs and wire harnesses, and making sure that labels are organized so you can have them packaged based on where they are deployed on the project. Materials that come prefabricated may come with a higher initial price point. But if they help you to save on labor costs and complete projects faster, they could represent a significant net gain for your bottom line.

WASTE STREAM MANAGEMENT

In addition to prepping the installation site, you should also consider your waste stream management plans. Banding, pallets, cardboard and other waste often create a massive amount of material on job sites. Without a proper plan in place, you could end up paying a premium to have it removed same-day, and your employees will be wasting time dealing with all the material instead of focusing on the installation. Waste stream management is a cost that you don’t want to forget to factor into your project proposals. So have a plan in place from the very beginning and you should see savings at the end of the project.building management systems, or industrial control systems — all in an effort to reduce energy costs and increase sustainability.

PARTNERSHIPS THAT CREATE SUCCESSEfficient labor resource allocation is about maximizing every dollar so you are always spending money on revenue-generating activities. But perhaps the best way to cut down on labor costs is to work with a partner that can make your life easier. You need a distributor that can not only offer the right products, but the expertise and support you need to run a lean crew and get the job done right.

At Werner Electric, we act as an extension of your own team, providing expert service and support for every phase of your project. Our experienced solar energy professionals have been in your shoes, working as contractors and electricians in the field. All of our energy professionals are NABCEP certified and we have a master electrician on staff to help you overcome any challenge and get the most out of your labor spend. We can help you design systems, source the right products and offer support throughout the installation and commissioning process. By leveraging our knowledge, network and resources, you can allocate labor resources more efficiently and drive results for your business.

To learn more about how we can help you save money and achieve success on every solar energy installation project, visit our website or contact us with any questions you may have.