A number of recent articles including Dr. Boreinstein's study from UC Berkeley and a feature in the Economist questioning the cost effectiveness of solar, have sparked some serious debate amongst solar enthusiasts and have served to propagate false impressions about solar in the public arena.
Due to the complexity of the product and misconceptions surrounding solar energy, the solar industry could greatly benefit from a collective advertising and branding campaign in order to achieve consistent messaging and dispel widespread myths about solar.
There is a common misconception that solar is not cost effective because most people compare the cost of distributed solar to wholesale electricity prices. This is an inaccurate comparison since homeowners are actually paying retail electricity prices and not wholesale electricity prices. One can argue that solar is cost effective now if we compare apples to apples.
The cost of RETAIL electricity in California can run upwards of $.30 to $0.41 cents per kWh for a household with high electricity consumption (a home with an air conditioner, swimming pool, refrigerator, TV, and a few electronic toys). A typical 3kW residential system costs $25,000 without incentives, and will produce 4,500 kWh per year virtually maintenance-free for 25 years. That works out to be 25 cents per kWh for solar — on a residential or commercial customer's rooftop. With the state rebate and federal tax credit the cost for solar is 18 cents per kWh.
Despite solar being an obvious smart financial and environmental decision for many home and business owners, daily articles from misinformed journalists claim that solar does not make financial sense. In order to create the drastic shift in the public's mind a pervasive and cooperative advertising effort on the behalf of all solar players is perhaps necessary.
In fact, the solar industry could learn a thing or two from the beef, milk, and cell phone industries, who all managed to successfully brand their products into mainstream acceptance via collective advertising and branding campaigns.
A commodity is a good with very little differentiation. Beef, milk, cell phones and PV are all examples of commodities. When it comes to marketing a commodity, an individual company's marketing expenditures tend to have a poor return. However, by financing a branding campaign by spreading the cost across the entire industry, every actor in the marketplace pays for and benefits from the increased effectiveness. This strategy minimizes some players' free-riding on other players' marketing efforts.
The 1985 Beef Act, passed by Congress, was designed to promote the beef industry. The Texas Beef Council spearheaded a branding campaign that included the now-famous slogan, "Beef: It's What's For Dinner" and financed it with a $1 fee per head of beef cattle. This campaign's goal was to address the slump during the 1980's within the beef industry.
The branding campaign utilized by the beef industry had more than the catchy "Beef: It's What's For Dinner," tagline. It also effectively utilized music within the branding campaign. Aaron Copland, an American composer, had originally written "Hoe Down" for the ballet Rodeo in 1942. Now, many people associate the distinctive melody with "Beef: It's What's For Dinner." The ads for beef displayed everyday Americans enjoying beef and focused on ease of preparation and the nutritional benefits. The ads typically displayed a family preparing or sitting down to a meal and featured recipes with estimated prep and cooking times that were typically quite short. Through these ads, the beef industry was able to greatly increase its sales and profits by dispelling the unhealthy and difficult-to-prepare reputation that beef had acquired in the early 80s.
The milk industry has also undergone several branding and re-branding campaigns as it sought to carve its own brand identity. In the past, milk ads used the tag line, "It Does a Body Good," to emphasize the health benefits of milk.
The next generation of milk ads started with the "got milk?" campaign. The first "got milk?" ad was a television spot in which a fellow with a shrine to the Alexander Hamilton - Aaron Burr duel hears a radio promotion asking, "Who killed Alexander Hamilton?" He phones into the contest, gets through, and tries to answer "Aaron Burr," but his mouth is full of sticky peanut butter. Because he is out of milk and cannot wash down the peanut butter, his answer is completely intelligible. As he screams in frustration from losing out on the large monetary prize, the words: "got milk?" flash on the screen.
Milk print ads briefly went to the "where's your mustache?" tagline, but that was dropped in favor of the more memorable "got milk?" tagline. These ads combined the memorable phrase with milk mustached celebrities, athletes, and other notables.
The branding of milk emphasizes the health benefits that result from milk consumption. Among the many benefits milk provides are the multiple essential nutrients to promote strong bones and shiny, healthy hair. Awareness of the "got milk?" branding campaign rates over 90% nationally, making it a highly successful brand.
It is not just the milk and beef industries that have been transformed through branding campaigns. The high tech industry has also successfully used this approach with cell phones. It wasn't until 1984 that cellular phones were first mass marketed to the general public. It was a technical marvel by which people could reach into their pockets and simply make a call to someone — anywhere in the world. This new wireless gadget was bulky, expensive to operate (compared to nowadays) and back then seemed like just another toy on the wish list of those who had money. The aggressive branding campaigns from the cellular companies successfully branded the expensive cell phones into must-haves for mass consumers.
All three industries have effectively used branding to increase awareness of their product as well as the industry as a whole. Instead of putting so much emphasis into nickel and diming the cost effectiveness of solar, perhaps the solar industry would be best served by utilizing a collective branding effort in order to bring solar to the mainstream.