As we near the 40th anniversary of Earth Day, what better time to take the pulse of the American people on solar energy?
For decades solar has been marketed to the American people as a product that is "good for the environment." And indeed, it is good for the environment. The problem is, as a marketing and sales technique, simply being good for the environment won't get you a lot of customers.
Fortunately, like Earth Day, the solar industry is growing up! We're learning just how vital strong consumer research, solid messaging and aggressive marketing campaigns are to creating a vibrant solar market.
New consumer market research by my organization, SmartPower, shows that reducing one's long-term energy costs is often more compelling to consumers than the obvious environmental benefits. In the midst of the worst economic crisis since the Great Depression, this really shouldn't surprise anyone -- least of all President Obama, who clearly understands our country's energy's challenges. (His pledge of $3.4 billion in Recovery Act funds to modernize America's electric grid seems to be just a first step toward modernizing our energy infrastructure.) But these good policies must be driven by a solid understanding of how to market solar energy to the American consumer.
So, in true David Letterman style, here's our "Top Ten" list of solar findings:
10. Buying solar is seen as buying into a lifestyle -- and it's not an urban one.
Successful consumer brand products fit easily into your lifestyle -- no matter what your lifestyle is. Coca-Cola is "the real thing" whether you're single, married, young or old. Not so with solar power. Too often consumers feel that when they buy solar power they must also buy into -- or change -- their lifestyle. The thinking goes: "If I buy solar power, I must also have to buy organic . . . and start wearing hemp . . . " In short, it conjures up every caricature of the environmental movement.
Furthermore, when asked to sketch their image of a "solar world," survey respondents were more likely to draw a small house or cabin with solar panels in a woodsy, rural area, not a towering glass skyscraper covered in solar cells. And when asked to describe this drawing with words, variations on "quiet simplicity" were the norm. These quiet images reflect a concern that consumers do not see solar as up to the task of powering their energy-filled lives. "Sure," they reason, "it could work way out in the middle of nowhere -- but not where I live; not where I work."
9. Where you live has a lot to do with your reasons for adopting solar.
Perhaps not surprisingly, there are regional differences in customer motivation. While 61 percent of Oregon residents surveyed said they were most motivated by environmental concerns -- global warming, reducing fossil fuels, good stewardship of the planet -- only 25 percent were most motivated by financial concerns. Conversely, only 23 percent of Arizona residents surveyed said the environment was their biggest motivator. 52 percent said they were most concerned with lowering monthly energy costs and reducing their energy costs over time.
8. Consumers are confused about solar power.
What happens on cloudy days? How do I measure how I'm doing once my solar panels are installed? How does billing work? What is net metering? These are among the many questions inspired by the prospect of committing to solar, although many survey respondents considered themselves "early adopters" who are comfortable with technology. Estimating monthly cost savings and understanding the applicable tax incentives are significant challenges for consumers, and many questions remain about the installation process -- how to find an installer, for example, or how to select the right product for their needs (solar water heaters versus solar PV, or photovoltaic, panels).
7. There's a lack of trusted experts and brands in the solar industry.
Where's the Nike or Xerox of solar? Consumers need a guide -- not just a recognizable household name, but also a respected resource who can answer their many questions. Most prospective solar buyers don't know where to start the process and have few guideposts for evaluating installers. And in the absence of a trusted brand -- or even a trusted friend -- the consumer's first action is to do nothing.
6. Upfront costs are a significant barrier.
Surprisingly, most people who have already bought solar laid out cash for their installations. Obviously, that's not a possibility for most of us -- and thus, the slow adoption rate of residential solar power. The good news: financing options do exist - 30 percent of those surveyed used home equity or loans from installers -- and some installers now lease out solar panels. It remains unclear how much consumers know about these options, however.
5. Buying solar can be a long decision-making process.
Let's not kid ourselves. No one wakes up on a given morning and decides to buy solar. Rather, a third of solar PV customers said it took a year or more of thinking about installing before they actually did it. Indeed, this is an improvement over three years ago, when 38 percent said the decision-making process took more than two years. The bottom line: It takes American consumers a long time to finally go ahead and purchase solar power. The industry needs to be patient and persistent!
4. Installers are key players in this process.
Solar customers like their installers: 86 percent said they would definitely or probably recommend their installer to someone else. And customers depend on installers for vital information: 62 percent of respondents in Arizona said they had heard about the utility company's solar rebate from their installer. Only 24 percent said they had heard about the rebate through the power company, either by visiting its website or receiving a letter in the mail.
3. The Internet is a solar customer's best friend.
Our solar customer is a web-savvy consumer, comfortable with using the Internet to find information. 68 percent of respondents used the Internet to learn about solar and installation issues. For solar PV customers, it was 78 percent. Furthermore, Americans are now living "in community," both in their neighborhoods and on the Web. The online community is a real and valuable avenue to consumers.
2. In messaging, common sense trumps environmentalism.
This is a big one. Of five positioning statements tested with 12 focus groups, no one picked "Solar is good for the environment." The clear favorites were "Solar makes energy sense" and "Solar is a good investment," these being the messages that spoke most to consumers. In today's society, consumers already understand the environmental benefits of solar power. We need to give them other messages that are more compelling.
And the number 1 surprising fact about solar energy today:
1. Most solar customers are older and financially stable.
Yep! The biggest purchasers of solar power today are rapidly becoming AARP members! It stands to reason -- the kids are grown up, and what better legacy to leave than clean air, a healthy community and a strong solar market? AARP aside, 85 percent of solar PV customers are over 45 years old and 46 percent have household income that exceeds $100,000. And 38 percent of solar water heater customers have household income that exceeds $100,000. These demographics help sharpen target marketing efforts and give clarity to who makes up the solar customer base.
And there you have it: the Top Ten tools to breaking down barriers to solar power. Now, we have work to do. As you celebrate Earth Day this year, keep in mind that solar energy constitutes only 0.1 percent of today's American energy market. 0.1 percent! We can -- and must -- do better. Let's start building a robust solar market today.
Happy Earth Day, everyone!
Brian F. Keane is the President of SmartPower, a non-profit marketing organization dedicated to promoting clean, renewable energy and energy efficiency. Learn more at www.smartpower.org.
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