Executive Roundtable: Global Supply Chain Delays and #BuildBackBetter Implications for U.S. Residential and Commercial Solar Installers

Our Executive Roundtable podcast brings you industry insights straight from the C-suite at BayWa r.e. Solar Systems. In this episode, we talk with our Head of Supplier Relations Daniel Marino and our VP of Operations David Dunlap.

This year, BayWa r.e. Solar Systems is bringing U.S. solar contractors even more great content through our recorded shows and live events! Joining our podcast lineup is the Executive Roundtable, where host Tom Miller sits down with members of our executive team to chat about what’s happening in the industry and at our company, what they’re reading and talking about with other executives, and how all this information intersects with business strategy and success for solar entrepreneurs.

Kicking off our first Executive Roundtable episode is our start-of-the-year outlook. Our Vice President of Operations David Dunlap and our Head of Supplier Relations Daniel Marino are on hand to talk predictions for how global and domestic ripples might influence the U.S. solar installation market.

Episode Highlights

Check out the YouTube of this Executive Roundtable for complete chapter listings.

On U.S. Solar Market Demand (1:17)
“We see strong demand in both residential and utility and I’d say nominally strong demand in commercial, coming into 2021. Residential we think we will grow maybe 20-25% and utility substantially — while C&I I think is closer to 10%, year over year. In terms of module supply, we do see the first half being constrained — Q1, Q2 — most vendors are mostly sold out. That said, I do see pockets of supply becoming available, especially on the commercial side.” (Daniel Marino)

On H2 2021 Long View (2:13)
“I believe that we’re going to see more capacity coming online from manufacturers in Southeast Asia, pretty significantly — but that’s going to dovetail with high demand. I think all three segments by then will be in full swing, so we’ll have increased demand and increased supply. By that point, if I had to guess, I’d say demand and supply match, and/or perhaps we’ll see a slight excess of supply. So, I do think we’ll have a slight price pressure down come second half, perhaps by a couple cents.” (Daniel Marino)

On Form Factor Shifts (3:30)
“I think we’re going to, in the second half, see more and more offerings from all the manufacturers in terms of larger cell sizes, different form factors. We’ve sort of been used to thinking 60 and 72 cell — we could be seeing 54 cell, 60 cells, 66 cells, 78 cell. All of those could be half-cut; there could be triple-cut by the end of the year. Those nuances aren’t going to just automatically equate to the same dollar-per-Watt and the efficiencies and the amount of Watts-generated-per-square-foot of the module — they aren’t going to necessarily show up as what we think of as a standard X number of pennies per Watt consistency, from product to product. So, I think there’s going to be some pressure there as well.” (David Dunlap)

On Supply Chain Expectations (5:27)
“Plan ahead, be patient, expect delays. The logistics on the Asia side — loading the boats and getting enough shipping containers and having them leave port on time — there’s a massive constraint and shortage, and costs going up… so it’s later leaving Asia, when it arrives to port here in the U.S. it’s congested, plus the COVID issues and operational challenges make for longer turnaround time. So, what used to be a two or three day to get through port and customs and clearance, everything is taking two weeks, three weeks. And so all of that just backs up. What we see and what our contractors are seeing is, you know, a month or more delay compared to what we’re used to. And I think that doesn’t go away in the first half. I think we just have to work to try and get in front of it, and reset our timetable expectations and plan further in advance.” (David Dunlap)

On Biden Administration Implications (8:29)
“I think 2022 and beyond this will really have material impact on our industry. If we look at what Biden wants to accomplish – 100% clean electricity by 2035 – that’s a monster undertaking which is going to require many orders of magnitude growth for our industry as well as wind and other renewables. But solar is going to have to grow significantly to fill part of that vision… We’ll pull in capital, pull in innovation, pull in good people into solar. And I think that’s going to lower soft costs, lower hard costs, and help our industry grow.” (Daniel Marino)

On State-Level Policy Lag (09:42)
“Here in New Mexico… the state is behind where it needs to be in terms of utility regulation and the interconnection book. And we’re just not ready for where we’re going. And we’ve got to get that updated here in the state, and the utility has to understand how smart inverters work and how to manage a lot more solar on the grid. That’s just a reality — and we’re not alone. California is at the front end of that, but many of the states across the country are still struggling with ‘how do we get there?’ (David Dunlap)

On 201 and 301 Tariffs (10:51)
“My message is let’s assume the tariff costs structure stays in place for 2021 and act accordingly. If we get news that things are moving, the analyst and the policy experts will tell us what kind of timetables are we going to expect. But I don’t think we should expect anything in 2021 in terms of dramatic shift or change.” (David Dunlap)

What’s Our Industry Story for 2021? (14:10)
“I think we’ll see more change, faster than we’ve seen before. We’ll continue to have curveballs from a policy perspective and complexity in the supply chain relative to form factor changes…. there’s going to be just a lot more growth in the industry. And with that growth and change, I think it’s going to be tough to manage. But it’s all positive from my perspective, from a longer-term point of view.” (Daniel Marino)

(15:46) “I think the sort of strength of will and conviction — knowing that we survived 2020, we’re here on the other side, and we can move forward — I think that does a lot for people to feel like, ‘Yeah, I’m ready. I can do it. I’m stronger than I thought.’ And we learned a lot, we changed some of the ways that we do business together, and I think that’s for the better and will strengthen and empower us going forward. We’re in the thick of it — and it’s going to take time to tear down and deconstruct, before you can build back up and reconstruct in a new light.” (David Dunlap)

Our Executive Roundtable podcast brings you industry insights straight from the C-suite at BayWa r.e. Solar Systems. From supply chain forecasts to solar policy shifts to operations and management innovations, leverage our leadership insights to inform your solar business strategy.