Thanks to the release of Tesla’s Powerwall, the words “energy storage” are becoming more ubiquitous in the solar market. A number of solar contractors are itching to jump into this potentially lucrative business, but such a decision can drastically change the direction of a company. Before taking the plunge to add energy storage to your solar contracting business, here are 5 vital questions that will help you make the best decision for your company:

1.Is my local market ready for energy storage?

Unlike solar, energy storage is still in an early phase where adoption is low and sales cannot be made off of the economic argument alone. As a considerably young market, your ideal energy storage prospects are going to be innovators (as a reference to the diffusion of innovations theory). These people tend to buy because they are risk-takers with disposable income who are attracted by the “cool” factor of this technology. Before deciding to dive into the energy storage business, you need to find out whether or not your local area even has such an audience available to sell to.

2.Do I have the right partnership networks available to make this happen?

Having a vendor or manufacturer with the right background will be crucial to the development of this line of business. As the technology is still in its early stages, does the vendor have the financial backing, hard-sciences skillset, and patience to commit to iterating the solution? Although you might be interested in this as a profit-generating business venture right now, that may have to come later once the product has matured. You will need to ask yourself: can I afford to divert attention away from my core business to work through the inevitable bugs and challenges of this technology? Are there vendors with the technical background and customer to support necessary right now that are willing to work with me on this?

3. Does my business have the bandwidth to add a new product line?

Adding a new line of business that involves entering a young market requires a signature investment of time, energy, and resources on your part. For starters, you will need to put in the leg work to define your customer base. This includes testing your market, implementing feedback and giving your first “innovator-class” energy storage customers the white glove treatment in order to start building best practices for your early adopters. Additionally, you will need to research and understand policies for energy storage in your jurisdiction or with your utility, learn how permitting is going to work, and potentially go through hand-holding cycles with your local jurisdiction due to the novelty of this technology. Even if you’re prepared to put in the work for building those relationships with customers and your Authority Having Jurisdiction (AHJ), consider the time and money needed to train your sales and operations team on the new product… there is much to consider!

4. Do I have the right operational tools and processes in place to manage both my solar business and a new energy storage product simultaneously?

Before you can afford to divert attention away from your core solar contracting business, you will need to assess whether you have reached a point where your core business operations can run sustainably. This means that you have already minimized overhead with the right technologies to ensure your solar business stays afloat without you being fully hands-on. If you are satisfied with the efficiency of your tools and processes and your employees are proficient at them, then it will be much easier to extend the same technologies into running your energy storage arm. Doing so ensures that what you learn about operational and safety procedures from working with your early energy storage customers can be translated into standardized best practices with process automation platforms like Scoop Solar. Without the right tools, you will be spending more resources than you can afford to on repeated mistakes and inefficiencies in two lines of businesses instead of just one.

5. Does entering the energy storage business align with my company’s ultimate goals?

This may be the most important yet often neglected question in this list. Spend time with your business data to understand what financial and time investments your company will need to make this a reality, if such resources are available and if you have enough runway to work with before reaching the point where there is a positive return on investment. Take a step back with your leadership team next to discuss the overall vision of your company and whether or not adding energy storage as a new line of business fits within the bigger picture. You may find that this is the best path to move forward in differentiating your business, or that it may overcomplicate the path to growing your core business.

In summary, you will need to know the answers to the following before making a decision on whether to enter the energy storage space:

• Do you have the initial audience to sell energy storage to?
• Do you or can you access the right vendor networks to work with?
• Can you afford to divert time and money into investing in an early growth business?
• Does this move help your business get closer to its ultimate goal?

Adding energy storage as a new line of business to your solar contracting business can be a powerful addition to your revenue stream and will give you a headstart over your competition in that space. However, it is crucial to perform due diligence in the decision-making process to ensure that a new product does not disrupt everything you have already done to grow your existing business. Consider reaching out to a solar consulting firm such as Chaolysti to assist with assessing whether adding energy storage to your solar business is the right move for you.