Entrepreneurs have been attracted to the growing solar industry like moths to a flame, and while success has been hit-or-miss for many of them, LA Solar Group Corp. is one of the lucky ones. The four-year-old Van Nuys solar installation business topped the Business Journal’s Fastest Growing Private Companies list with an impressive three-year rise in revenue of 1,233 percent. In 2015, revenue totaled $12 million. LA Solar is the brainchild of Ara Petrosyan, a 30-year-old electrical engineer who after working for other solar installers, decided to branch out, said Robert Sarai, the company’s business development manager. Solar companies overall have been successful, Sarai said, because installing solar panels adds value to real estate, and California residents have consistently welcomed alternative energy. “Part of our growth really is in terms of where we are in our business,” he said. “Solar was becoming a major decision-making trend for real estate property owners to incur in their businesses and in their personal lives. We came from the perspective of engineering and knowledge and expertise. Most others got into it for the money.” In-house operations Petrosyan started LA Solar with one customer. Now the startup does 150 to 200 mostly residential installations a month, with an average project cost between $18,000 and $20,000. The business has already expanded with offices in Corona, Sacramento and Bakersfield and recently opened a location in San Jose. In the next several months, LA Solar plans to open sites in Arizona and Texas, with Colorado and Florida on the horizon. Sarai attributes the growth to the company’s close attention to all a project’s details through dedicated, in-house staff. With about 65 employees, the company has its own project designers, quality control inspectors and customer service representatives trained on every stage of a solar project so they can answer a client’s questions without passing them onto others. “We started as a referral-based business,” Sarai said. “When you do such work, that customer shares the experience with a sphere of influence.” Also, the company has dedicated permitting managers who submit project plans to city departments in-person rather than online. That way the city staff who checks the plans, hands out permits and inspects projects get to know LA Solar employees, designs and installations, which helps speed up the process, Sarai said. “Lots of solar companies go through the run-around with the city,” he said. “It can take them three months to get permits. We get our permits fast – the average time is a couple of days to three to four weeks, depending on the city and county. The faster we get it done, the happier the customer is going to be.” Customer service is a critical factor in the solar installation business because competition is so fierce. Installers like LA Solar are competing with other installers, electricians and general contractors who mount solar systems as part of home remodeling jobs. To stand out, a newer company needs to do really high quality work, said Brad Heavner, policy director for the California Solar Energy Industries Association in Sacramento. “It’s really about building a book of business and getting referrals,” he said. “If you’re a good contractor you can figure out how to do solar right. The thing is getting a foothold in a competitive market.” Solar boom Heavner’s trade group tracks solar projects but doesn’t formally monitor the number or growth of solar installers. Still, Heavner said, just so far this year, about 1,000 companies or individuals in the state installed solar systems. “That to me says there’s intense competition,” he said. “You have to be good at what you do to really grow.” Petrosyan, LA Solar’s founder, wanted LA Solar to do just that. He required his installers get licensed with California as not just solar panel installers but also as electricians and as roofers so they can construct and remove roofs. That means the company doesn’t have to contract out parts of an installation. “The significance of not having to subcontract is less cost and less issues,” Sarai said. “When it’s all done in-house, there is more of a peace of mind for the customer, and greater customer service.” Roofing licenses are particularly important for residential work because 90 percent of home-based solar systems end up on the roof, Sarai said, as most properties don’t have extra land to dedicate to a large solar array. As licensed roofers, LA Solar’s installers can assess whether a roof can withstand a solar system based on the roof’s age, condition and roofing materials, such as tile, metal and different types of shingles. Each material requires distinct handling and some may not be the best base for a solar system, so the company may need to modify parts of or an entire roof, Sarai said. Heavner agreed that most installers have one of those licenses and some have two, but most don’t have all three. Solar installers have clearly ridden the tide of solar’s exploding market. The U.S. solar market is estimated to grow 119 percent this year, according to the national Solar Energy Industries Association and GTM Research. In 2015, solar installations were up 16 percent over the prior year. Residential projects have increased more than 50 percent every year for the past several years. Solar’s popularity has been helped along by federal and state tax incentives and the falling price of solar panels. Nationally, system pricing dropped 17 percent in 2015, the national trade group said. According to the state’s trade group, the price per watt of solar has fallen 66 percent to about $4 in 2015 from roughly $11.75 in 2000. In California, the industry grew this year but at a slower pace than in prior years, Heavner said. “A lot had to do with the fact that solar finally achieved economies of scale that brought prices way down,” Heavner said. However, there’s still plenty of room for growth, he added, as only 3 percent of the state’s utility customers have had solar systems installed. “Every time you have 12 million customers and a product that can save customers money, you have a lot of opportunity,” he said. Going forward, LA Solar has set its sights on expanding its number of commercial projects, which now account for only about 20 percent of its business. Sarai said the company is forming partnerships with commercial builders, contractors, developers and architects because the state is requiring more green building practices. “What we’re committed to is sustainability,” he said.
Harvesting Sunshine
