The German solar industry, which until recently was characterized by euphoria and growth, is currently facing a serious crisis. The once-thriving solar installation market has recently faced significant challenges. Demand has experienced a dramatic slump and smaller installation companies in particular are now desperately looking for new orders.
Companies that focus solely on the installation of new equipment are struggling to utilize their workforce and are faced with the challenge of adapting their business models to changing market conditions.
Reasons for the decline in orders and risks for installation companies
The uncertainty surrounding new laws and regulations, especially in the context of the heat transition, has led to a delay in investment decisions. Economic uncertainties and general economic fluctuations are also contributing to consumers holding back on major spending. In addition, financing options have been reduced due to rapidly rising interest rates. In addition, the necessary investments for photovoltaic systems are becoming ever larger, as nowadays additional components such as wallboxes or storage systems are usually integrated.
Changes in subsidies and an increasingly saturated market are leading to an intensification of competition among installation companies in the PV industry. The resulting oversupply of service providers also leads to increased price pressure.
Another risk factor for photovoltaic installation companies is the dramatic drop in the price of solar modules and components, which can largely be attributed to increasing competition from manufacturers from China and America with low-cost components. While this increases the attractiveness of PV systems for end users, it also puts pressure on the margins of installation companies, putting profitability at risk. In addition to installation companies, industrial companies, such as the German manufacturer Solarwatt, are also feeling the effects of this more and more.
One possible solution for installation companies could be to diversify their business models, for example by focusing more on services.
Importance of services for installers
Companies that already have an established service business for photovoltaic systems have a clear advantage in times like these. This is because they have the opportunity to distribute resources flexibly and thus adapt to changing market conditions. While the demand for installations of new systems in the solar industry is declining, these companies can increase their activity in the areas of maintenance, repair and expansion of existing PV systems.
Service business as a profitable additional area
Services are playing an increasingly important role not only in the solar industry, but in the entire construction industry. This is because in phases of weaker order situation in the new-build business, installation companies can increase their sales and profits through services. By providing maintenance contracts, repair services and periodic inspections, they provide added value to their customers and can thus compensate for the impact of a crisis such as the one currently prevailing in the solar industry. The service business not only opens up additional revenue opportunities for installers, but also strengthens their customer loyalty and reputation as a professional service provider. In addition, the focus on services enables companies to stand out from competitors and ensure their long-term viability.
Service as a long-term customer loyalty option
It is important to stay in touch with customers to understand their needs and requirements and to satisfy them. Through regular maintenance or repair services, installation companies can build long-term business relationships. After all, a high-quality and customer-oriented service binds the customer and can thus help to receive follow-up orders from them. By proactively reacting to problems and offering solutions, installers show their customers that they are there for them even in difficult times and thus ensure a positive reputation in the market, which in turn often leads to recommendations from existing customers and thus to new orders.
Services as a strategic competitive advantage
The current lower demand automatically leads to stronger competitive pressure. In this demanding environment, service is becoming a decisive differentiating factor. In addition, due to the previously mentioned, increased complexity of PV systems, services are not only appropriate, but have now become necessary. Customers today value not only products of the highest quality, but also first-class customer service. Installation companies that want to stand out from their competitors must therefore take their services to a new level. This means that they must not only provide a fast and professional installation of the photovoltaic system, but also a comprehensive after-sales service and professional customer support. This is the only way they can gain the trust of customers, position themselves as competent contacts for all matters relating to photovoltaic systems and thus stand out from the competition.
Measures to strengthen the service business
Maintenance and repair of photovoltaic systems
The regular maintenance and servicing of photovoltaic systems is the central aspect of a professional service business.
In particular, the continuous monitoring of photovoltaic systems through the use of suitable monitoring software plays a decisive role in the maintenance services of installation companies. By detecting performance losses and potential failures at an early stage, the software enables a rapid response. As a result, targeted measures can be taken to optimize plant performance, which not only increases the efficiency of maintenance work, but also minimizes unnecessary on-site appointments.
The importance of active monitoring and maintenance of photovoltaic systems for installation companies should therefore not be underestimated.
Maintenance contracts as a central element for a functioning service business
For photovoltaic installation companies, it makes a lot of sense to conclude a maintenance contract with the customer immediately after the installation of a new PV system. As a result, predictable income can be generated and thus the financial stability of the company can be strengthened. In addition, the customer feels well looked after by this proactive measure and experiences continuous support from the installation company.
Services as a fundamental strategy for installers
Services play a crucial role in the successful positioning of installation companies in the PV market. They are a fundamental strategy to ensure customer loyalty and customer satisfaction. Through targeted service offerings, installation companies can retain their customers in the long term and differentiate themselves from competitors. Installation companies should therefore continuously develop their services and adapt them to the needs and requirements of their customers.
So if you don’t currently have an active service business, you should build this up as quickly as possible, develop it further and adapt it to the requirements of your customers. This is the only way a company can keep pace with the competition and successfully survive future market fluctuations.
Diversification of business activities as a way to overcome crises in the photovoltaic market
The current situation in the solar industry clearly shows that challenges can always arise in a dynamic market environment. It is therefore crucial to take precautionary measures at an early stage. Companies should not only focus on the core business, but also consider additional business areas.
A diversified business strategy based on different pillars can make companies more resilient to market fluctuations. The ability to react flexibly to new circumstances will be crucial in the future.
Especially in difficult times, it is important not only to react to the current challenges, but also to take a look into the future. Companies that are proactive and adapt to diverse business models will be better equipped to meet future challenges.