7 Ways to Reduce Labor and Soft Costs During Solar Projects
- October 26, 2021
- Best Practices
- Solar Energy
Prior to COVID-19, the United States was already seeing a ramp-up of clean energy, with production growing especially fast in states like Kansas, Minnesota, Nebraska, and Iowa.
In 2020—even amid the pandemic—the U.S. solar industry had a banner year, adding 19.2 gigawatts of new capacity (43% growth since 2019) and breaking a record along the way.
While this rise in commercial solar energy production is ramping up commercial solar projects, increasing competition is creating smaller margins for installers. The price of materials has stabilized, and total cost-per-watt installation has dropped. To maintain satisfied customers (and your profitability), you need to finish solar jobs faster and improve project efficiency.
This means you have to scrutinize soft costs to stay competitive. Boosting resource efficiency whenever and wherever possible can keep installation costs in check.
Like many other industries, skilled workers are hard to find to help you meet the growing demand for solar projects. Despite this inevitable labor gap, you can still gain a competitive edge. How? By taking an installation approach that maximizes your existing revenue-generating talent while minimizing disruptions to operations. You may need to reconsider your approaches to some core business processes to make it happen, but the payoff is worth it.
Here are seven ways you can effectively cut labor costs, find opportunities to improve operational efficiency, and save time on solar energy installation projects.
1. Adjust Purchasing and Warehousing Strategies
Some contractors choose to buy products and materials directly from manufacturers or online resellers. This may provide some upfront savings—but there may be hidden costs involved as well. (As an example: Don’t forget to factor in freight. How will your products arrive? How much will it cost to get them to you? What happens if they’re damaged along the way?)
Buying directly from a manufacturer can also result in higher long-term costs. For instance: It’s an approach that typically requires you to commit to standard package quantities, which means you’ll also have to manage and store overages and excess stock. If you’re buying materials in bulk to increase your margins, that may mean you need a storage facility three or four times larger than if you purchased them on a per-project basis through a distributor.
Your staff will also have to manage multiple shipments. You may need to source materials from multiple suppliers to complete a single job, which can require a significant shift in resources to handle supplier relations and order management. This takes away from the resources you could direct toward important revenue-generating roles.
2. Rethink Receiving
Every contractor has spent time waiting for products to be delivered to a jobsite—especially in today’s environment.
Even if you have an efficient purchasing process in place, employees will have to stop, figure out what went wrong, and remedy the situation when materials don’t show up onsite as planned. This takes time away from other important tasks that generate revenue.
To avoid this problem, consider partnering with a full-service distributor that can monitor your orders and eliminate the administrative burden of sourcing materials directly. You’ll save money on office labor and be able to put financial resources to better use by hiring installers and other specialists.
When materials arrive, someone needs to be available to receive them—and the amount of money you allocate for this person(s) depends on how your business is structured. If you buy materials directly from a manufacturer or online reseller, then you’ll need to invest in more warehouse resources (more people) to handle these shipments.
Making this one simple change can help reduce labor costs through every stage of the project, including receiving: Work with a distributor that can break down modules and kit materials to reduce your time onsite and decrease the amount of time workers spend locating material, unpacking products, piecing items together, and disposing of waste.
Consider this as well: If warehouse employees aren’t properly trained to handle solar materials, then you may experience a high rate of breakage. Every broken solar panel takes money out of your pocket and time off the clock. Instead of spending time and money on warehouse training, purchase materials from an experienced distributor that knows how to handle these unique products. Many distributors even have equipment designed to properly maneuver large shipments of solar panels to reduce broken parts.
3. Reduce Equipment and Transportation Requirements
Another way to minimize labor costs is to reduce the number of truck rolls it takes to get everything out to your jobsite. The more semi-trucks, flatbeds, trailers, and other heavy equipment you bring onto the site, the more likely that the site will begin to erode. Degradation of site conditions can not only delay or stop labor, but also make it difficult to get heavy equipment off the site for the next job.
Transportation logistics is a learned trade that requires thoughtful delivery scheduling to avoid logjams that cause costly delays. Plan out exactly when and how everything will be delivered to the site so materials don’t arrive too early—or too late.
Consider working with a distributor that has project management experience. They can provide valuable services like staging and delivery capabilities, such as flatbed trailers and piggybacks.
4. Prep the Site in Advance
If proper site prep isn’t complete before your crew arrives, then you’ll waste money: It’s as simple as that. To maximize labor, it’s important to make sure your team can start working as soon as they arrive.
On greenfield installations, talk to the customer about planting cover crops the season before the installation. This helps cut down on overly muddy worksites that can delay projects. Also be sure that the site is properly graded and surveyed well in advance of installation.
If you’re installing a roof-mount system, then take potential ballast (such as pea gravel) into account in advance—or you may end up paying highly skilled solar installers to rake rocks. Be sure scaffolding is already in place so installers don’t have to set it up. That way, the crew can get straight to work.
As you prepare for installation, you also need to consider security. Theft of tools or materials can impact your budget and delay the timeline. Be sure that fencing, cameras, locks, and other security measures are in place prior to installation.
5. Better Manage Commissioning and Remote Troubleshooting
When it’s time to commission a new solar energy system and complete the project, the last thing you want is a delay. But if you’re installing new technology that your crew has little experience with, then you could easily run into an issue if the system malfunctions or throws a code they don’t know how to handle. Without the right support, you may be left struggling to reach the manufacturer on your own or spending valuable time troubleshooting to determine the root of a problem you don’t necessarily understand. All these delays cost time and money (and can be very frustrating).
Many modern solar systems can be commissioned remotely; inverters, controls, and reporting systems can be programmed in advance. This not only saves time onsite, but also reduces the number of truck rolls required to bring specialists out to commission the system. Consider partnering with a distributor that has expertise in this area and knows how to help you avoid costly delays.
6. Make Time for Offsite Prefabrication
The more work you do before the crew gets to the site, the less you’ll have to pay for expensive labor in the field. Consider allocating more resources to prefabrication to reduce time onsite.
Prefabrication activities can include pre-cutting wires to meet specs, ordering pre-assembled racking materials, buying kitted homeruns and wire harnesses, and making sure labels are organized so they can be packaged based on where they’re being deployed. Prefabricated materials may come with a higher price point initially, but they reduce labor costs and lead to faster installation. The end result could equal a significant net gain for the bottom line.
7. Factor in Waste Stream Management
In addition to prepping the installation site, you should also have plans for waste stream management. Banding, pallets, cardboard, and other waste often create massive amounts of material to deal with on a jobsite. Without a proper plan in place, you could end up paying a premium to have it removed, and your employees will waste time dealing with the material in their way instead of focusing on installation.
Don’t forget to factor waste stream management costs into project proposals and have a plan in place from the very beginning. This will translate to savings at the end of the project.
Partnerships that create success
Efficient labor resource allocation is about maximizing every dollar to make sure you always spend money on revenue-generating activities—and the best way to cut down on labor costs can be to work with a partner that makes your job faster and easier. Find a distributor that offers not only the right products, but also expertise and support to run a lean crew and still get the job done right.
Van Meter acts as an extension of your team, providing expert service and support for every phase of your project. Our experienced solar energy professionals have worked as contractors and electricians in the field—they’ve been in your shoes. Our energy professionals are here to help you overcome any challenge you face so you can get the most out of your labor spend.
We can help you:
- Design, manage, and support solar projects
- Source the right products
- Handle project logistics
- Reduce inventory
- Increase capital and cash flow
From project kickoff to completion—and beyond—we stand by to manage your solar projects, answer questions, make educated recommendations, address roadblocks, and connect you with manufacturers when needed.
To learn more about how Van Meter can help you save money and achieve success on every solar energy installation project, visit our website or contact us to get answers to your questions.

ARTICLE BY:
ETHAN WOLLBRINK
EMPLOYEE-OWNER, NATIONAL SOLAR SALES MANAGER