The New Economic Battleground
According to the Wall Street Journal is Clean Energy. And yes, that does beg the question of “What is Clean Energy?” It appears that Clean Energy is the antithesis of Dirty Energy, which infers fossil fuels. The ensuing articles in this Special Report in the WSJ focused on investment opportunities in batteries, solar, wind and nuclear energy.
And while many distributors have experimented, and some profited, by selling solar, and some wind, products, most have just dabbled. The challenge has been getting these manufacturers to understand the role of distribution (most sell direct to end-users or through dealers) as well as understanding that this can be a low margin business with product that continuously becomes obsolete due to manufacturing improvements which drive down costs for more energy efficient products.
Last summer, A-D hired a Director of Clean Energy presumably believing that many of its members were learning about energy efficiency from its lighting oriented manufacturers who have spend millions of dollars on developing tools and educating distributors, end-users and contractors on energy efficiency from a lighting perspective. From a profit perspective, there was limited additional value A-D could drive as it already had rebate deals with many leaders in these market segments (except perhaps breadth of LED suppliers.) The ensuing question was “What is ‘Clean Energy’?”
Many assumed it would be solar and wind.
A-D is now delivering value to its affiliates who are in / entering this market. The group just announced relationships with 34 solar, wind and service companies. These companies cover modules, solar PV kits, inverters, racking, solar BOS, co-generation, energy efficiency, master distributors, small wind, financing, engineering and training (feel free to call me for more info). Late last year the group also conducted a training seminar for its distributors.
As distributors seek niches, the ability to quickly partner with “approved”, or “reviewed”, suppliers will hasten the time to market rather than every distributor being on their own.
The question is, “Will solar, and wind, become significant revenue, and profit, generators for electrical distributors or a niche that will take 10+ years to develop such as the datacom market? Is it an economic battleground for the electrical distributor?”