Solar Equipment Brokers Bring Cost-Saving Benefits to Buyers

Solar equipment brokers are increasingly more important as changing market conditions, including tariffs and fleeting governmental incentives, challenge the industry. I’m not a broker myself. However, I’ve had the privilege of interviewing brokers throughout my 8-year tenure at EnergyBin.

If the cost of doing business increases due to unforeseen market conditions, then one immediate direction a solar company can make is to determine whether any single expense line can be reduced. Brokers are motivated to help developers, EPCs, and installers secure lower hardware and freight costs.

In today’s economic landscape, not having a relationship with a broker means missing opportunities to save money. I’m not suggesting that you dismiss your established relationships with manufacturers and distributors. In fact, some distributors have broadened their business models to include brokering services. Instead, I’m recommending that you expand your supplier network to include reputable brokers.

This article highlights the opportunities gained when working with a broker and provides tips for selecting a reputable broker. These insights are taken from my interviews with wholesale solar equipment brokers, who are EnergyBin members in good standing.

What wholesale buyers gain from brokers

There are many benefits that wholesale buyers get from working with brokers. In brief, a broker acts as an intermediary between a buyer and a supplier. A broker handles negotiations and any corresponding services of a transaction on a commission basis, such as freight and logistics.

Many types of solar brokers exist, and they tend to offer a wide array of services based on their core competencies, such as site assessments, array design, permitting, financial options, tax incentives and rebate filings, vetting installers, and collecting full system quotes.

Here are five main benefits that brokers who specialize in PV hardware deliver to buyers.

1. Brokers expand the buyer’s scope for sourcing products.

When it comes to sourcing equipment, brokers have a vast network of suppliers, from manufacturers to distributors to resellers, to obtain quotes from on the buyer’s behalf. They’re not confined by exclusive contracts, which makes them flexible in volatile markets.

Because of this, brokers assume the role of buyer’s advocate. The relationship becomes more of an advisory position than sales transaction, where the buyer has multiple options at a variety of price points to choose from.

2. Brokers help negotiate buying terms.

This benefit is huge for those solar builders who’re operating in rapid development plans with large project portfolios and extended contracts. Time is of the essence to keep project plans moving forward. Secured prices are important to keep budgets in check. Brokers can help buyers maximize these efforts.

In an interview with Alchemy Solar Distribution, an example was given of a buyer in need of 1-2 megawatts of modules delivered over a 12-18 month timeframe. A broker can help find a partnering manufacturer to honor such terms. Partnering with a broker in this capacity saves the buyer time and increases efficiency.

3. Brokers are experts in market intelligence.

In an ever-changing market, it can be challenging to keep up with fluctuating market conditions, including technology releases, shifting supply chains, tariffs, regulations, and other geopolitical factors. Brokers like Kinect Solar excel in up-to-date industry and market information to provide support and advice to solar buyers.

Brokers like Aten Solar help buyers access the highest quality modules while simultaneously connecting suppliers with new global markets at minimal investments to ease supply chain constraints and ensure buyers get what they need at the price they budgeted for and when they need it.

4. Brokers help remarket excess inventory.

Additionally, brokers help contractors and developers resell excess leftovers from their projects, which can be a few pallets on up to a few megawatts. This service pays off when projects get cancelled or downsized. Other reasons for excess include changes in regional code standards and bulk purchase leftovers. Holding costs can weigh heavily on operational budgets, which increases pressure to offload aging inventory.

Brokers may offer hardware audits as a service, where they assess a buyer’s inventory, provide a bid quote, pack the goods, and organize shipping. Brokers take care of remarketing the goods leaving contractors and developers to focus on new project builds.

5. Brokers assist with lifecycle management solutions.

Some brokers offer decommission services and buy-back programs. These opportunities provide flexibility to PV asset owners and managers who have solar arrays scheduled to come offline.

In an interview with FabTech Solar Solutions, it was stated that 85-90% of decommissioned panels aren’t at their end-of-life. Because recycling comes with a cost, FabTech works to assess resale value to help offset the cost of removal.

Brokers who have business models that expand into other services, such as Solar Recycling Company, provide comprehensive assessments to advise asset owners and managers on their hardware. The goal is to determine what hardware has resale value, what needs repair or refurbishment, what should be recycled, and the cost analysis for each available option. Detailed records of the audit process, including the condition, test results, and outcome of each component are provided.

Regardless of what capacity solar brokers are operating in, partnering with brokers who keep tabs on the best equipment deals, master efficient supply chain processes, and specialize in lifecycle solutions results in saving time and money.

What wholesale buyers should consider when selecting a broker

The benefits of partnering with a wholesale solar equipment broker are notable. However, as is the case in any relationship, it’s important to conduct due diligence on a brokerage firm before trusting them with your business.

Here are three tips to employ while vetting a broker.

1. Review the broker’s track record.

A reputable broker exemplifies integrity by doing what’s right to meet customer expectations. Look for testimonials and case studies on the broker’s website. Take it a step further and call those companies who provided the testimonials and case studies. Or ask for references from the broker. Any firm that has a healthy track record will be happy to provide business references.

Furthermore, reach out to your industry peers. If no one knows the company you’re inquiring about, that could be a red flag.

2. Reference third-party sources for additional information.

Third-party sources like the following may provide information on a company that boosts their credibility.

Solar Trade Associations and Chambers of Commerce – Many organizations have open-access directories to verify a company’s member status.
Better Business Bureau – This resource publishes comments on any reported customer issues that have gone unresolved.
Secretary of State – For the state the company is headquartered in, look up the business filing to ensure the company is in good standing.
EnergyBin – Our account managers are available to provide information on any company we have a relationship with.

Note that EnergyBin members go through a vetting process before they are invited to join our community. Additionally, our account managers host regular one-on-one meetings with members to obtain business updates.

Contact EnergyBin to request trade references for solar companies who belong to our B2B Resale community.

3. Dismiss any broker who requires pre-payments.

Perhaps the greatest red flag that designates a broker as disreputable is whether they require a pre-payment for product before they have control of it. Gain clarity about a pre-payment policy by flat-out asking this question when you interview a broker.

Additional policies to question a broker about include payment terms, returns, replacement for goods damaged or lost during transit, restocking fees, and whether they require a security interest. If you’re in the market for used solar equipment, ask the broker if they have a money-back guarantee and a service warranty on goods they’ve refurbished.

Think outside of the box

To consider working with a solar equipment broker is to think outside of the box. In today’s economic landscape where market conditions change quickly and sometimes without warning, every solar company must look for alternative solutions to stay competitive and profitable.

Reputable brokers help solar companies to gain a competitive edge by saving them time and money with respect to hardware management. The benefits apply to the entire hardware lifespan – from sourcing to end-of-life.

By expanding your partner network to include reputable brokers, you’ll build resiliency into your business model to withstand challenging market conditions today and in the future.