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An unquestioned principle of the capitalist system in which we live, breathe and consume is that growth is not only good but a necessary imperative. Grow or die.
Make more so that you can buy more and maybe, if you’re disciplined and wise, put away more. And if you’re in business, sell more so you can grow more so you can sell more and so forth. And if you are in the business of selling solar electric, or photovoltaic, systems to Hawaii residents, as I’ve been doing since 2000, the past several years have seen an explosion in the number of projects sold across the state. What used to be something of a small-scale, boutique contracting business up until a few years ago has become something akin to the California Gold Rush of the mid-1800s, with as many as 200 firms going after their stake in the Hawaii PV gold fields. On Oahu alone in 2012, more than 70 firms obtained PV permits for more than 1,000 residential and commercial projects.
From 2009 to 2010, installed PV capacity in the state more than doubled, and did the same again from 2010 to last year. Quite a few firms saw their revenue go up hundreds of percent from year to year as they struggled to staff up, keep up with demand and ride the growing solar wave. Whether there has been a commensurate increase in profits during this time of exponential growth and ever tighter margins is a different matter, but as long as the sales keep coming and the cash flow keeps flowing, there’s at least been the perception of success and expectation of continued expansion.
The reality is that this kind of growth rate is not sustainable. While I may take a more conservative view on when that peak will be reached compared to others who believe the local PV industry is just starting mass market adoption, it’s not a question of "if" the line on the growth chart will flatten out and start downward but "when." But planning for such leveling and decline is not the way most businesses operate, solar electric or otherwise. If the demand is there, coupled with ambition, then the likely approach will be pedal-to-the-metal selling, staffing up as necessary and worrying about the inevitable contraction later — much later.
While I respect the impressive accomplishments of a number of the players in Hawaii’s PV industry who have seen their stars rise in rapid and dramatic fashion, I know that kind of path has never been the one for me and my modest contracting business. Yes, growth is good. Yes, it feeds the ego to be recognized as one of the state’s 50 fastest-growing small companies four out the past five years, as my company has. But as a business owner, I feel like a definite outlier when it comes to many of the other, much bigger fish in the PV school.
Rather than seek and rejoice in that exponential growth, I have sought a relative steady-state formula of predictable revenue and income, a manageable, durable staffing level and not pursuing projects beyond our resources and comfort zone.
Sustainability has become something of a buzz word these days, meaning different things to different people. From a business-model perspective, one can make the case that durable, more-incremental growth that avoids the hire/lay off/rehire cycle of temporary, explosive growth and subsequent slowdown is more sustainable.
I may wince at times with envy when I hear of this or that company touting its impressive statistics of PV systems sold and megawatts installed. But that is not the path for my company, as I try to balance the needs of the business with my need to not to be consumed by it.
Talk about a difficult balance to find, let alone maintain.
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