What Solar Distributors Are Seeing That Installers Aren’t

Herve Billiet (00:00) Hey everyone, welcome to another podcast of what Solar Installers Need to Know, and I have the great pleasure to invite Humza Arshad to the podcast. Hi, Humza! Humza Arshad (00:08) Hey everybody. Herve Billiet (00:08) Humza, you are now the branch manager in Richmond for Greentech, what I still call CD. But before we speak about that part, tell us a little bit about what it means to be a branch manager for our Greentech. Humza Arshad (00:22) Yeah, absolutely. So Greentech is in 49 states, possibly with coverage in Alaska as well. So we cover the country. We are in residential and commercial distribution. And I had the honor of opening our Virginia location in 2021. So we work directly with our installers and vendor partners and lenders to kind of facilitate the clean energy transition. So I train my team to work with contractors to figure out which financing providers, which equipment, and which strategy really works for their niche, and then support them in the process. We've had our work cut out over the past several months, for sure. Herve Billiet (01:09) Well, let's first speak about about the marketing piece. I know you as very technical so let's get the marketing out of the way first. So I still call it CD. Was it a smart thing to to switch the name has been successful or no difference whatsoever everybody says Greentech. Humza Arshad (01:24) Yeah, so I actually think that it really comes down to how long you've been in the industry, right? Even we within the company, you know, sometimes lapse into it, right? So, we are CED, Consolidated Electrical Distributors, Inc. Greentech is the solar division, but it just really made sense to differentiate because of the specialization that we have. And the fact that the CED brand is very strong, but we get into situations where an installer might type in CED and wind up at my sister location that's about 25 miles down the road and come to realize that there's no solar modules available there. And so this is something that actually did happen when we first opened. And so by really emphasizing the... renewables aspect of what we do. I do think that we have been successful. I do think it's a strong brand and we were able to maintain GreenTech within CED GreenTech, then make the fact that we are in the renewable space that much clearer. Feedback has been very positive. And so I think the biggest thing about that transition was making sure that we took the positive brand equity that we already had within that name and the recognition and not lose that while better emphasizing what it is that we do. Herve Billiet (02:47) So much about a solar company and a big part of the value is in branding and how people perceive you and your value and your services. So just wanted to highlight that. I think the first time we speak about marketing Humza, I know you as like very, very technical. remember when you opened the branch in Richmond, congratulations again on that. Tell us a bit more like, how do you find installers that wanna work with you? Cause you have competitors. How do you select installers? Maybe you work with any installer or like is there like a selection process? Humza Arshad (03:20) Yeah, absolutely. I think right now word of mouth is very common. We work with quite a few installers who understand what we're about, know us personally, and will recommend us to their friends, or installers will come to our shop, or we'll do deliveries and have personal relationships with the actual installers doing the work. And so they have their internal networks as well within Virginia. I'm a member of the Virginia Solar Guild. Like we're trying to look at things from a more holistic perspective within that space, you know, people often come to us and then, you know, we will all often work with, with contractors that may be in a related space that want to do more, you know, obviously. We'll get interest from electricians that are interested in doing EV charging or, you know, people that are installing generators currently that got questions about, you know, potentially doing batteries instead of generators due to, you know, maintenance requirements and then also noise and pollution and so on. And so, and then obviously, you know, we'll do some prospecting as well, but most of the business that we get is really word of mouth. Herve Billiet (04:27) So you've understand correctly the services that you provide is not just you an order comes in, you deliver the panels and inverters to a warehouse of a solar company. You also do drop shipping. And then what other services do you provide? Like you seem to be playing an educational role too. Humza Arshad (04:44) Yeah, absolutely. So we work with our vendors to make sure that, you know, we have regular events to train our installers. you know, solar is a really interesting space because it is, it's both construction industry and tech. And so being at the intersection of tech and construction, it's much more dynamic, and I mean this with full respect, you know, for example, like traditional electrical where a conduit body is a conduit body has been a conduit body for many years. The lifespan of, for example, a microinverter technology, we have Enphase, for example, switching to gallium nitride, right? Something that we've seen in our electronics for a while, but is now, you know, hitting the solar space and many cool things like that. And we've seen, you know, battery technology as well, getting installers, you know, in our building, learning about different racking systems, actually getting on our mock roof and playing around with it, installing it really fundamentally changes, you know, someone's perception of, of, a technology and an understanding of a technology because anybody can sit through and there's some value to obviously, you know, being on a, on a virtual call with a slideshow, but there's only so much you can get from it when you actually get to hold it, put the pieces together, see how it works physically, tangibly, it does change things. And so we are doing what we can to increase access to the equipment itself, even with DIYers. If we get somebody that's interested in putting a couple of modules on their school bus that they just bought or their van or their tiny house or in Virginia, we also get yacht lifers. But just having them come in, take a look at it, we try to get their hands on the product so they can see, hey, this is what a residential solar module looks like. This is what a large format commercial module looks like, probably not for you, or maybe it is a good application. And so really it's just honestly trying to make solar more accessible. Herve Billiet (06:40) So let's speak about that in more detail. Like as a solar manager, solar CEO, you're part of making decisions about a product. What are you selling your customers? I'm a big proponent that you're not in a dictatorship. You shouldn't be making those decisions yourself on your vacuum. It's with your team. It's a team decision about which project, products to analyze, make a team decision about which products to use. And every department is part of that decision. But the decisions I'm on my team and I were making about which products to select, you do the same, but on a bigger scale. Plus you're probably part of a national team. we learned a lot. And if we switch tracking, we usually see one or two projects or three projects for free to get a hang of it and help with the transition. And that's really when we learned how we like products or not. Batteries too. You install a few, you see if you like it or not. You're not installer, you're distributor. So how do you get your hands on items and get a feel for it? Do you have a mock roof and you literally install the batteries and the panels yourself to kind of get a feeling? How do you make that decision? Humza Arshad (07:46) Yeah, 100%. That's a fantastic question. And that's exactly, you know, in our wheelhouse of what we're trying to figure out. And so, for example, in Virginia with battery products specifically, you know, we make a lot of calls to our West Coast locations, right? We look at California, Hawaii, try to figure out what they're doing, what's successful there. We can look at, for example, we can ask our account managers out there about what their scaled installers are seeing, what their experiences are, are they seeing failure rates, are they seeing tremendous feedback, either positive or negative? And so because in Virginia, are, I don't want to say laggards, I feel like there's a negative connotation there. Let's just say that California is further ahead, right? And so we can actually leverage that knowledge to help our installers skip the first three steps in the process, Herve Billiet (08:27) Mm-hmm. Humza Arshad (08:35) and get straight to the product or products that best fit their needs. But with regards to actually trying the product, I have a smart panel on my home. I have a battery that was beta tested. I put modules on my roof from a new brand before I was willing to actually sell those to my installers. I wanted to actually see what that product was like before I... encouraged my installers to start installing it in scale. It's the same with, you know, many of our employees will have access to potentially batteries, for example, that we're not sure yet that we want to deploy, but on paper they look great. And so we don't, you know, we don't necessarily want to tell a company, Hey, this, this product is amazing. You should, you know, design 20 plant sets with it immediately before we're able to actually get real world feedback. What's nice being in our space as well is that we can facilitate conversations between the vendors themselves and the installers. So, you know, I'll regularly get a racking manufacturer to meet with an installer so they can provide the feedback that they provided me directly to someone from that company so they can say, hey, we really love what you're doing with the splice. We don't love what you did with this new end clamp or mid clamp or whatever it is. So they can actually take that feedback, you know, to their engineering teams and figure out a way to make their product better for all installers. Herve Billiet (10:05) So in the solar residential market, who's actually the decision maker about your products? Because let's say you're a racking manufacturer, it's not that the solar installer buys from you, the solar installer buys from a distributor. So the distributor is the decision maker, you buy in bulk from the manufacturer of a racking company. So how much do you receive feedback from installers? Like, I want this racking. Do you receive constant feedback from install about what they want or like, this is what we have and you think you're competitive with other distributors? And so how much do you receive input from installers to decide what you put in your warehouse? Humza Arshad (10:43) Absolutely. mean, really it's the driving factor. I want installers to have access to what they feel is the best product. And they are the ones that have, you know, the real world information, right? I can read from a data sheet to anyone or someone can download a PDF themselves, right? But if you are on a roof and you feel that this racking just doesn't feel right. It's not the racking for your team. And so I especially coming from, you know, an installation background really value the feedback from the people that are on the roof. Right. For me, what's most important is the combination of installers being able to do quality work at a price point that makes installs accessible to homeowners and allows for successful, sustainable business for the installer, right? And so we always have to strike that balance, but we're always looking for installer feedback. So in our building, we currently carry five different racking lines, but different green types across the country will carry different lines. based on what their market most needs. So for example, we carry some flat roof product, but we don't carry as much flat roof product as for example, a location that's closer to DC would carry because they are servicing the row house market in DC. And so they're going to carry a higher volume and a higher percentage of product geared towards flat roofs. In Florida, we're going to see a lot more tile product. we don't have any of that in Virginia. And so if I, if I have a one-off job that needs tile, then we just, you know, order it from our Florida location and get it in our installer's hands. But being regional allows us to actually carry the equipment that makes most sense for the, for the location. And so for example, we'll probably recommend a different rail product or a different weight of rail, let's say, for parts of the state that don't have the snow load that other parts do. once you get up into the mountains, you're going to need to design a beefier system in order to better withstand the local conditions. so feedback is constant. It's really what we pride ourselves on. It's a constant back and forth. And we've definitely been in positions where we thought something would be better than it was. And we have to pivot and we work with our installers in challenging situations to make it right for the homeowner and for the installer as well. Herve Billiet (13:25) Talk about feedback and feedback over time becomes trends. So what are some recent trends that you see and we're recording these in the beginning of the year. So I guess we just all get over that end of the year where a lot of solar companies were installing like up until the 31st. What are some trends that you maybe have seen starting end of the year or beginning of the year in in sales and marketing, like is there a shift happening or what do you think is happening there? Humza Arshad (13:52) Yeah, we're all trying to get more data right now to understand what changes in tax laws, what impact it's having. And we're going to see different impacts in different markets. Virginia is a market where because leasing went live relatively recently, we haven't had that much of a slowdown in residential sales. But the makeup of that is, you skewing towards leases. And so currently we're seeing lower battery attachment, which makes sense because generally speaking, batteries in the state of Virginia have generally been part of a cash loan package. Of course, with the changes in the administration with Spanberger and Hashmi coming in in Virginia, there's likely going to be additional state level incentives. And when those come through, you know, we expect further changes in what this market to look like. I think the biggest thing right now is we're all trying to figure out what the overall impacts to the industry will be and how that's going to be broken up by region within, within the country. Because I do think that overall, solar will probably be down, but there are certain markets that are going to be up and there are certain markets that are going to be significantly up Herve Billiet (15:07) What do you think that is? Humza Arshad (15:09) So we have locations like, I know the mid-Atlantic region very well. It's where we are geographically. In DC, the SRECs are so high that they insulate a lot of if a payback went from three to five years, people that were considering solar are probably still considering solar. That change is not that significant within the context of what it provides and then I also do think that where between utility rates increasing in Maryland, DC and Virginia, we've seen increases in utility rates across all three. You know, that mitigates a good bit of the impact that, you know, the ITC going away may have. And realistically, we do think that in this area, there are a lot of people that are either driven by, you know, an eco conscious vision and ROI vision or both. And so we, we do see that in Virginia specifically, we also think that there may be future grid instability due to the increased demand from all of the data centers. That's something that, you know, if you live in Virginia, it's, on everybody's mind. The the proliferation of data centers in Virginia is the concentration specifically is the greatest in the Western hemisphere. And the energy draw related to that is substantial. Virginia imports an enormous amount of electricity from PJM. We're not building a ton of generation. We've also had obstacles or barriers put in front of us in terms of offshore wind that Dominion has been trying to develop as well. And so one way or another, the state needs more electrons. And so here regionally, solar provides a solution. And I also do wonder, if we get some inclement weather this year, will we see grid outages? I've been living in Virginia for several years now and at least where I have lived the frequency and duration of grid outages has increased. And so that's a driving factor behind my family and I getting a battery. And so we just got a 15 kilowatt hour battery put in and it's been working really well. And so we really do think that there's going to be moving forward a greater attachment rate in the battery space as well, Herve Billiet (17:16) Maybe that's the... Humza Arshad (17:30) in the long term, we're definitely going to see decreases in pricing in the battery space, making that more accessible as well. Obviously, right now, that's being impacted by tariffs, scaling of battery production, and so on. Herve Billiet (17:44) In a trend about sales, I also think it's a bit easier to sell at $200 a month kind of BPA or lease or TPO products than selling a 60 or 20 dollar solar system. So I think it's not necessarily that sales will go down. I think, I don't have a crystal ball, of course, but the other piece is that there's always a certain amount of people that are interested in solar at a specific time. They already did their kitchen remodeling or something, whatever it is, it's right now the time that they are considering solar. And not everybody's following the solar policy like you and I do. Like they may never have heard about the ITC. So if that person that's in their life not ready to place that call to a solar company, if they call end of last year, they would have signed with solar right away because, you know, 30% different. But a lot of people... were not ready at that time. So they will call today a solar company and that solar company answers to the question about like, are there not some incentives about solar? I think there was something the answer is like, no, there's no incentive, but it's a good payback time. Maybe around 10 years now, but it's still a payback time, which if you don't have over, you have a utility with zero, infinite, like never any payback time. So 10 years is still better than no payback. Humza Arshad (18:52) Absolutely. Herve Billiet (19:00) So I don't think it's necessarily that we're gonna see like such a major, major crash, maybe 20% or 10% lower maybe, but not more than that. So that's my hypothesis on that one. What do you think? Humza Arshad (19:14) If I were a betting man, would say Virginia will be up. Herve Billiet (19:16) Yeah. Humza Arshad (19:16) Yeah, because I think the biggest driver is utility costs, right? So I got my bill from my utility for December. And it was actually a really frustrating looking bar graph because it was a bar graph and on top of it, had the dollar value, but the bar graph was for units consumed. And so my bar graph went down year over year. So I reduced, we reduced our consumption, but the dollar value was about 15% higher. So I'm looking at this where, you know, the bar is lower and the number is higher and by a notable amount. So, you know, seeing that clearly, you know, I think we'll make the utility rate increases very, you know, more obvious for many homeowners. We know how many kilowatt hours we're using, right? We know our bills, we know seasonality, we know I have double peak because I've got, all electric home and so heating and cooling and all of that. We've got EVs. We understand, but for people when they're just like, just got a $500 electrical bill. I've never had a bill over $350. Psychologically, it's going to have an impact and immediately they're going to start looking at obviously solar, also like weatherization, insulation, new appliances, HVAC, all of these things. And of course, from my perspective, it really does need to be holistic. It's not just about creating as much generation as possible. It's about creating generation, but also reducing consumption, right? And trying to figure out how to do both. Herve Billiet (20:51) Yeah, absolutely. Now, going back to that $500 bill, we just moved to a new house. We didn't have solar yet, so thank you. And so yeah, first bill was $400. Like, I haven't had an electric bill in years. Old houses, like full solar and everything. It's like, wait, how much? $400? And so my point is that another solar installer had massive sales in January February last year. Humza Arshad (20:57) Congratulations. Right? Herve Billiet (21:15) And I wonder like, why? Like, is it policy related? And I was like, no, it's not policy related. Once utility bills hit $500 a month, that those bills on auto pay and just get paid, nobody cares until it hits a threshold of $500 and people notice it, they start caring and they take action. They found solutions. Always think it's funny that America's homes are not well insulated and so on and so on. It's not that they believe in climate so much for which may be a bit true, but the electricity price is so much higher. They don't want to waste it. So it's just the price. Same is going to happen here. Like if these prices go up, people are to look at alternatives, insulate their homes and addicts. And yeah, I think it makes total sense. Humza Arshad (21:55) Exactly, drop the thermostat by a degree or two, you know. Herve Billiet (21:58) So there is an energy transition happening. Do you see that you and GreenTech are part of an energy transition? Do you see store installers reaching out to you about other products? Like, hey, you also offer roofing, and you maybe also have HVAC products and that education. Is that happening? Do hear installers asking for other services and products? Maybe maintenance products? Or is that a trend? Humza Arshad (22:19) Absolutely. Yeah, absolutely. So we specifically are getting into the HVAC space. We believe that the average solar customer actually is looking for a reduction in an electrical bill. And that can come through solar and it can come through other means as well. So if someone, for example, is looking for, let's say, reducing their bill and a battery backup, they might be able to go from three batteries to two batteries or two batteries to one battery with a more efficient HVAC system. The other thing there is that we love solar, we're solar nerds. At the end of the day, solar tangibly is ROI, meter spinning backwards and so on. HVAC actually improves comfort in the home. And so now, there's actually a physical benefit to that, right? And so, you know, if you can combine solar and storage and HVAC, now you're looking at holistic solutions that actually provide, you know, significantly more benefits in terms of, you know, comfort and improvement in actual quality of life. So for us, it actually makes a ton of sense. The synergies are there and we, it took us a while to actually realize that that was staring us in the face. Herve Billiet (23:36) Now, at the same time that I started thinking about Sunvoy, I also took my license installed a few heat pumps myself to kind of get a sense of it. And I learned that I can take an installation manual and install a heat pump and figure it out, but not as much like tell any electrician in your company, like, all right, and tomorrow you're going to install a heat pump. Like that doesn't work like that. The industry is also quite different. You can find people experiencing solar now, but it is a heck of a lot easier to find people experiencing HVAC. It's such a large industry. People have so much more knowledge and experience doing that. So my question to you then Humza is like, to solar companies that are thinking about doing HVAC, what are some first steps they should take or how would they decide if it's the right thing for them? you have any advice? Humza Arshad (24:26) I think this may be a cop-out answer, but give us a call. we know our installers well. ⁓ And we had the conversations with them to understand, Herve Billiet (24:32) Mm-hmm. Humza Arshad (24:36) what their competencies are and what their potential is. And so if we are working with an installer and we know that they can do this, they read manuals well, they are meticulous and can cross their T's, dot their I's, we can definitely get them on track with the trainings that are required, either help go on their journey to get their own licenses or partner with a group that that makes sense for them to partner with. And, you know, if maybe it doesn't make sense for them to bring it in-house, we can actually connect them with partners that would be able to, you know, see that project through at a very, very high level with them maybe functioning as the sales arm. And so really it's understanding the installer well and understanding who their target customer is and how trainable they are at having the correct conversations to do this aspect of business justice. Herve Billiet (25:38) So to do H-Factory you have two parts, the sales part and then the operational part. Do you advise a small company to try to do both at the same time or if they are more focused on sales, try to sell it, have somebody else install it. If your company is more towards operational, try somebody else selling it and then you install. Or would you advise to do both aspects at the same time? Humza Arshad (26:01) Yeah, exactly. So there are different solutions for different company structures. If there's a company, they've got 10 crews, a couple of master electricians, then they probably have the capacity to handle an additional product line and the ability to fully train multiple people to do this as their day job. If it's an add-on that may have a take rate of let's say a job a month, two jobs a month, five jobs a month, it probably doesn't make sense to take on the overhead of training an entire crew on this aspect of the business. And so it really is a question of what makes the most sense for that installer. And then also, you know, within that there's regional nuances as well, right? The installs that are going to be done in a DC row house are probably very different than, you know, a split level in Front Royal. Herve Billiet (26:58) Yeah, absolutely. Talking about trends, do you see something else happening in the solar industry you'd like to share? Maybe you spoke about sales and marketing, maybe in operations, maybe products or batteries or TPO's, anything you wanna share? ⁓ Humza Arshad (27:13) Yeah, I think the biggest thing is going to be understanding the impact of AVLs, so approved vendor lists for certain finance products on product availability and what the next two to three quarters look like based on that. And then with that, you sprinkle in a certain degree of volatility coming from the federal government regarding tariffs. And if we had, more information sooner, would have allowed us to be, a little bit more agile in pivoting when we needed to. I think distribution as a whole did a fantastic job of working with installers, to make sure that there was equipment to install in a space that was getting very, very, uncomfortable. But, I think it's just going to continue to be, an unusual business environment for the industry. We have midterms coming, we have utility rates, we have partners that we were able to do quite a bit of business with that are maybe no longer options due to the countries their parent companies are associated with. And so we just need to take the information in and then act on it quickly so we're able to continue providing, as seamless and experienced as possible at the installer level, because at the end of the day, they just need to make sure that they have product to install and that the product is compliant with what it needs to be compliant with. And we are doing everything on the backend, down to individually scanning micro inverters to make sure that even at the batch level, they are fully compliant. Herve Billiet (28:50) Product availability must be on your mind like every day, I guess. How do you do that? Humza Arshad (28:54) Yeah. Honestly, I've been in the industry long enough to have built very, very strong relationships with many, many vendors. And I'm fortunate enough to be at a company where we just have really, really good conversations internally and share information as quickly as possible. so we have many, many, many other branches across the country, between teams, text messages, meetings at conferences, our internal calls, we're able to share that information very, very effectively. And so when we come upon new information, we're able to distill it into what everybody needs to know, get that information out quickly, and then disseminate it to the installers very, very quickly. And I think 2025, just helped us do all of that better because we had to, there was no way around it. And so it just, you know, forced everybody to be, you know, the best, the best versions of ourselves in order to get through that year. And, you know, honestly, internally, we're, we're just going to continue at it this year and just try to do it easier. That's my motto internally for my team is, hey, we're doing it the easy way this year. Herve Billiet (30:03) This year is easier. Good. Well, Humza, thank you very, very much for sharing your experience and your knowledge in the industry. You've seen it all. So thank you very much for sharing that. Humza Arshad (30:12) Fantastic. Herve Billiet (30:13) Thanks, Humza.