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The Importance of Investing in Black-Owned Businesses and Diversifying Your Supply Chain

Thursday, Feb 17 2022

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SEIA Comms Team

Black entrepreneurs and leaders are finding success in the solar industry, and this Black History Month, SEIA is celebrating their work and highlighting the opportunity we have diversify our supply chain and invest in Black- and minority-owned businesses.

Increasingly, customers want to know that the businesses they support are doing their part to create a more equitable world. Supporting Black- and minority-owned businesses are a key part of this work, and it’s even more important for the solar industry, where Black Americans and entrepreneurs are historically underrepresented but stand to gain the most from once-in-a-generation climate legislation.

Investing in Black- and minority-owned businesses is not a panacea for the industry’s lagging demographics, but it can certainly help. According to the Brookings Institute, if Black-owned businesses reached parity with non-Black businesses, they would bring in more than $670 billion in revenues and add approximately 1.6 million jobs. This is even more important considering that Black-owned businesses are more likely to hire Black people and that there’s a persistent wealth gap that’s holding back Black Americans.

For companies that want to demonstrate that equity is a part of their core values and get a leg up on competition, a metrics-based supplier diversity program is a great first step.

SEIA has created numerous supplier diversity resources for the industry, and have continually heard from members that they had difficulty identifying diverse suppliers in the solar and storage industry. In addition to this information asymmetry, most supplier diversity databases have fees associated with them which can be cost prohibitive to small businesses, which comprise about 95% of the solar industry.

These persistent challenges were holding back the industry and the data bears that out: In 2020, EnergySage found that 81% of installer survey respondents didn’t track supplier diversity, leaving ample room for improvement.

To help the industry overcome these challenges, SEIA developed the Diverse Suppliers Database. This free and easy-to-use database helps companies identify, connect with, and work with diverse-owned businesses serving the solar and storage industry. From consultants to financiers, installers to manufacturers, PPE suppliers and lawyers, the database has more than 300 diverse-owned businesses that are supporting the solar and storage industries.

In order to be considered a diverse-owned business, at least 51% of the business must be owned or controlled by: Minorities (Black/African American, Indigenous/Alaska Native, Latino/Hispanic, Asian, Native Hawaiian/Pacific Islander, Other); disabled persons; service-disabled veterans; veterans; LGBTQ+ community members; and/or women. In addition, the database also recognizes Small Businesses, Small Disadvantaged Businesses, and Historically Underutilized Businesses.

To ensure equitable outcomes for the businesses listed in the database and to boost participation, SEIA partnered with Black Owners of Solar Services (BOSS), one of the largest groups of Black professionals working in the solar industry, on methodology and recruitment.

SEIA is also helping solar companies create and implement their own supplier diversity programs through its Diversity, Equity, Inclusion and Justice Certification Program. This first-of-its-kind program provides resources and support for companies that analyze and implement workplace solutions that improve diversity. As companies participate and excel in the program, they are striving for Bronze, Silver, Gold, or Platinum certification.

One of the program modules focuses on supplier diversity and can help companies establish their own programs so they can better track who they’re working with and benchmark their progress. The module provides guidance on how to begin collecting supplier diversity data, utilizing accounting systems to track metrics, establishing supplier diversity goals, and information on state-level supplier diversity regulatory reporting requirements for solar companies. Additional resources are provided to users including template supplier intake forms, a recorded webinar on supplier diversity, and links to SEIA’s supplier diversity database. For companies that already have programs in place, SEIA’s Certified Diversity Professionals can evaluate their existing programs and either validate current methods or offer suggestions for creating a more robust supplier diversity program.

Because the certification program emphasizes tangible and measurable activities, eventually SEIA will be able to track, aggregate, and share annual progress on numerous DEIJ-specific metrics, including supplier diversity. As a result, SEIA aims to report on the number of companies with supplier diversity programs, the average number of diverse suppliers SEIA members work with, and the spending percentage companies are dedicating to diverse suppliers.

Both the database and certification program represent an important opportunity for solar and storage companies to take ownership of their diversity work and show their customers that equity is a core part of their corporate values. Once companies make this commitment, we must share our progress if we want to collectively understand just how far we need to go to as an industry to live out these values.

There’s no reason Black- and minority-owned businesses can’t take center stage in the solar and storage industry, and it’s on us to create an environment where this is possible.

We hope you will join us in celebrating the Black leaders already making a difference in the solar and storage industry and encourage you to participate in SEIA’s efforts to help lay the groundwork for even more diverse-owned businesses and leaders to join us.

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