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Australian solar installer receives unexpected response from customers after switching exclusively to microinverters

From pv magazine Australia

After six years of installing solar on the roofs of Western Sydney, Jake Warner made a bold decision. He decided to no longer offer string inverters. Instead, his boutique company, Pentrith Solar, would only install solar systems with the less common and more expensive microinverters.

The switch garnered a number of unforeseen responses. Firstly, the company’s conversion rate – the amount of enquiries which turn to actual sales – increased. “We’re actually getting less price objections,” Warner told pv magazine Australia, “the opposite to what I expected.”

Trouble, it seems, has come from an entirely different source. “The biggest thing I’ve found difficult to handle is, we’re still servicing string inverters,” Warner explained. The issue is that when past customers discover the company has stopped offering string inverters, they’re left feeling lumped with a subpar product. “I didn’t really think about it, but I do have to think about how that makes people feel.”

Warner is quick to clarify that he isn’t trying to wage any wars on string inverters. “This is not about rubbishing string inverters. If that’s what you can afford at the time, that’s fine,” he said. “Coal is the opposition here, not other solar companies and not string inverters.”

Why Penrith Solar made the switch

Founded in 2017, Penrith Solar averages about six installs every day. The company doesn’t use subcontractors at all and provides customers follow-up support through its in-house service team. Stemming from that commitment, the company recently undertook an internal audit looking at how often its team was called to service solar systems with microinverters compared to those with string inverters. What he found was stark: his team was eight times less likely to be called to fix microinverters than they were string inverters.

“This is just our own study,” Warner qualified. “In our experience, we found [microinverters] to be eight times more reliable.”

Specifically, Penrith Solar has been using Enphase’s IQ range (including the IQ 7, IQ7+ and IQ7 A), and Warner noted that his findings are particular to those products. He found just four failures among the 13,000 microinverters Penrith Solar has installed, according to its internal audit. “We’ve had a tremendously low amount of failures.”

It wasn’t only that Warner has found microinverters to be substantially more reliable, he also thinks they are easier to manage from a warehouse perspective. Instead of having to stock a range of string inverters to fit different system sizes, Warner now just orders one microinverter for every panel coming into his stockroom.

The third factor that swayed Warner was safety. He says his in-house service team gets called out to DC isolator fires weekly. “It sucks, but we’re almost used to it,” Warner said. “It doesn’t even surprise us anymore.” Some clients don’t even realize there has been a fire, according to him, but when his team looks at the isolator, they’ve found it burned. “It’s pretty bad.”

Customer responses

While Penrith Solar has been installing microinverters on solar systems for a number of years, the decision to use them exclusively is relatively new. Which is to say, while the company’s conversion rate has increased in the last two months, it may be more symptomatic of Australians’ eagerness to install solar following the pandemic.

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Rather than drawing conclusions from the fluctuating rate, Warner is relying on his interactions with customers, who he says have been exceedingly receptive to the microinverters value proposition. Warner has a home-spun theory which he says explains the warm reception, he calls it cost bandwidth.

“When you ask a consumer what they expect to pay for a 6.6 kW system, their response is somewhere from $2,500 to $6,600. They rarely expect to pay more than $1 per watt for a string inverter,” he explained.  “Now when you start talking about microinverters, the client doesn’t expect to get that for $2,500. The client’s mindset starts at about $6,500 and ends somewhere around $10,000 – that’s around where they think is reasonable.”

On the boutique end of the spectrum, a string inverter solar system installed by Penrith Solar used to come in at around $6,900. Its systems fitted with microinverters, on the other hand, start at $7,700. “So with string inverters, [Penrith Solar] are not in that price bandwidth. But with micro-inverters, we’re well and truly within the clients’ expectations,” he added.

It’s led the company to have less price objections, with customers overwhelmingly understanding the added value offered microinverter’s ability to monitor both panels and consumption, as well as their longevity. It’s important to note here that solar companies typically charge around 30% more for systems with microinverters, but Penrith Solar has now managed to get this figure down to about 10% through increased installation efficiency. This means that while its microinverter systems are still more expensive than its string inverters were, the price difference is less than half of many of its competitors.

Delicate juggle

While Warner has found little price pushback, he admits he underestimated the severity of hurt feelings. When we spoke, Warner had just left an inspection for a 90 kW system to be fitted at the business of one of his past residential customers. “The client said to me, ‘how come we’re not using string inverters? We did that on my house, remember?” Warner then had to explain Penrith Solar had stopped offering string inverters, even though he had installed a system on the man’s house with them. “I had to handle his emotions on site, which were – he felt, not betrayed, but wondered if he got the best value for money.”

“I had to explain to him how much the price difference was when he bought his system, and remind him of the saving he’s actually getting right now, as well as informing him that in today’s market, microinverters are the best choice for [his business].”

This delicate juggle between continuing to advocate for the value of string inverters while pitching discontinuing their use has, for Warner, been the hardest part of the transition.

Industry response

Warner said Penrith Solar is the only company he knows of which has decided to exclusively install microinverters, though he could name a number of other solar companies he believes are using them for a majority of installs.

In terms of other companies operating in Western Sydney and the Blue Mountains, Warner said he has already seen them follow suit and gearing towards microinverter systems. “We’ve done the research for them. We know that it [microinverters] fail less.”

“I’m not saying [microinverters are] always going to be the best choice – there may be in the future something else – 2025, who knows – but right now, with the ammunition and knowledge I have today and the in-field experience, [microinverters] are the best on the market,” Warner said.

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Source: pv magazine