Bringing Solar to the Mainstream Through Customer Education

Recent high-profile mass advertising campaign from Mr. Al Gore and Mr. T. Boone Pickens has raised mainstream awareness on both climate change and America's future energy supply. There is tremendous opportunity for the solar industry to continue to educate the general public and potential customers about solar.

Most manufacturers and installers' marketing messages focus primarily on economic returns. As an industry, we need to start educating customers about preserving our natural resources and doing our part to reduce our environmental impact. This is of course easier said then done. Most downstream players are under a lot of pressure from investors and shareholders to maximize their profits — causing many companies to abandon their customer education on environmental stewardship and focus primarily on economics return.

Other industries have found the opposite. According to recent studies by Grocery Manufacturers Association and PricewaterhouseCoopers, companies that report on sustainability generally have higher returns on assets, higher gross margins and returns on sales and stronger cash flow and rising shareholder returns.

Companies that reported on sustainability did better than those that didn't on indicators like higher gross margins and returns on sales because they were lean in their operations and saved on input costs, including saving on energy costs, adds the report. Since energy prices are rising and carbon pricing policies are in vogue, such companies are predicted to continue to benefit from sustainable practices. Profitability of such companies can be also attributed to consumers putting a premium on products produced in an environmentally friendly manner. Higher margins and returns on sales also challenge the assumption that a sustainable company's additional expenses like higher administrative costs aren't worth the returns.

Even companies outside of the renewable energy industry have seen great benefits from their commitment to sustainability. According to Chris Laszlo's book, The Sustainable Company: How to Create Lasting Value through Environmental Performance, the new price for corporate survival is the integration of economic, environmental, social and high ethical objectives into long-term business strategy.

In Laszlo's book he uses the example of The Co-operative Bank of Britain, which boasted a profit of US $155.7 million on a US $660 million operating income in 2002 and has increased its profit growth every year for the past eight years. The bank, which dates back to 1872, has a longstanding history and reputation of ethical, social and environmental performance. It received the UK Social Reporting Award and the UK Environmental Reporting Award in 2000 for its extensive survey of customers about ethics expectations. According to a recent report, the bank's strong social and environmental record has directly contributed to 20% percent of company profits.

Noting that sustainability is a business imperative today because it keeps investors and other stakeholders informed about regulatory and market pressures that a company faces, the report adds that various stakeholders also develop confidence in a company that reduces input costs, which is good for its financial sustainability.

The solar industry can apply lessons learned from these industries and collectively develop a marketing standard in educating their customers. As it gains mainstream acceptance, the industry will need to establish standards in order to maintain its integrity.