Emerging Markets for Electrical Contractors in 2020
Solar Energy Industry
Solar energy industry trends have been showing steady growth for years, but now the solar industry is adapting to the challenges of the Covid-19 crisis. This is the first economic recession the solar industry has had to face since becoming a mainstream product. Many major solar energy companies are offering substantial incentives, and you could leverage these incentives as a selling point to your clients.
In addition to the incentives being offered by solar companies, there’s also the Federal Solar Investment Tax Credit (ITC). The tax credit is 26% through 2020 for solar energy projects, and is currently scheduled to decrease to 22% in 2021. The tax credit and company incentives together make an enticing opportunity for electrical contractors and their clients, but they’re also both time limited to take advantage of. This may add the pressure of time, but there are tools and systems electrical contractors can use to save time and labor on even the most sprawling solar energy projects.
Government Investment in Public Works
Government spending will increase as a way to revitalize the economy, and historically a lot of that spending lands in construction. These construction projects usually involve projects like road repair and construction, main electrical grid updates, street lighting, and public works updates such as parks.
There is also an attractive opportunity for electrical contracts for institutional buildings, such as schools, government agency buildings, and, of course, hospitals. These types of projects currently account for 19.3% of revenue in the electrical contracting industry, and that number is only going to grow with increased government spending.
While smart cities may sound like the types of projects that would be put on hold during a crisis, there are a lot of practical benefits to them that will become even more important in the wake of Covid-19. Many smart city initiatives are attempts to answer serious problems, such as rapidly increasing city populations with minimal public resources and staffing to compensate for them. Crises like Covid-19 only make these problems more immediate.
Some of the government spending outlined above is going to go to smart city projects. This is a good time to highlight the government contracts you’ve worked on, all of your IoT implementation experience, and any public infrastructure work.
You can also try reaching out to universities in the cities where you want to work. A lot of smart city projects are run through universities, and they either hire contractors themselves with grant money, or can put you in direct contact with decision makers.
Most electrical contracts come from new construction projects, but there has been a decline in nonresidential and residential construction in 2020 due to Covid-19.
This creates an opportunity to focus on specialized maintenance, repair, and updating services, or “facilities services”. More companies have been investing in upgrading their existing electrical systems, and these investments are not expected to be hit as hard as new construction initiatives.
Lighting systems are an example of a facilities service that’s still in demand. You should consider emphasizing your experience in upgrading lighting systems to LED and energy-efficient systems, as well as updating lighting systems to smart lighting systems. Familiarize yourself with smart lightbulbs and IoT lighting system devices that are current market leaders so you’re ready to start making educated recommendations to your clients. If you’re including solar energy in the job you can take advantage of the government support mentioned above.
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