How do solar companies manage inventory?

As a solar company, you may have warehouses across the country, each holding a different amount of inventory. Many companies have to manage the complexity of maintaining stock at multiple locations. In the solar industry, the need to keep equipment on individual crew trucks further complicates inventory management.

Why is inventory management so difficult for solar companies?

Inventory management for solar companies can be more complicated than in other industries because of the many influences affecting customers’ purchasing decisions. Demand for solar panels changes dramatically based on external factors. Some are similar to many other sectors.

What are the best techniques for solar inventory management?

The best techniques for solar inventory management are the Reorder point formula, Consignment and Safety Stock. Solar Inventory includes inventory management of solar modules, solar cells, PV materials, solar paste, silicon wafers, frames, backsheets, junction boxes, PV glass, PV Equipment, PV connectors and racking & mounting.

How has the solar industry innovated over time?

The Department of Energy has an excellent resource called the Solar Innovation Timeline where you can see how the solar industry has innovated over time. While this innovation has improved the throughout of solar modules and helped bring the price down, it has also created a risk of obsolescence which very much impacts inventory management.

Can solar inventory be devalued?

Solar inventory can also get devalued because of frequent price drops. Sales cycles are not very predictable because demand is closely linked to consumers’ energy bills, price volatility and incentives provided by governments. Solar Inventory management needs to help improve demand planning and liquidity/cash flow.

Is solar inventory a 'yes-to-be-sold' cost?

Regardless, the safest bet is to limit the amount of inventory you carry that’s not directly for a sale order that you have in your hand. So, one of the key objectives of inventory planning is to help preserve your capital by limiting the amount of “yet-to-be-sold” inventory. When it comes to solar inventory, Storage is a non-negligible cost.