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Marketing from the Ground Up: An Introspection from Solar Executives

Kevin Rosenbaum, Delta Market Research, Inc
June 11, 2012  |  5 Comments

The international energy crisis is a frustrating conundrum. When I took a course on climate change during my senior year at Penn State, Professor Brown said something that simultaneously gave me feelings of hope and despair: "We currently possess all the technology needed to overcome climate change, the challenge to overcome lies in the political sphere."

Solar seems like a brand new technology still working out the bugs in beta testing, yet photovoltaic (PV) cells have been around for over half of a century.  Ninety percent of Americans are not negative toward solar energy, yet we aren’t seeing much, if any, increase in the current one percent private ownership.  There is a big gap in where solar energy should be and where it currently is, and much of that gap is caused by failed or non-existent marketing strategies.

Delta Market Research, Inc. found an alarming lack of cohesion and comprehension within the solar industry in a recent study.  Owners, CEOs, CMOs, CFOs, and COOs of solar energy installers, PV manufacturers, solar energy consultants, solar associations and distributors of solar energy systems were surveyed.  A third thinks solar energy is a product, another third thinks it is a commodity, and the rest thinks it’s a service.  Seventy percent claim that their primary target is the homeowner.  How many homeowners in mainstream America have a roof full of PV cells?

There are many factors at play here, and you may think that there must be something else standing in the way, like affordability or unreliability or just simple inconvenience.  Before we get into an ever-receding pocket of excuses, let’s look at the solar situation in Germany. 

Germany is one of the world’s leaders in PV installations.  Because of their feed-in tariffs, solar energy accounted for three percent of total electricity produced in 2010, a figure market analysts predict will increase to twenty-five percent by 2050.  When builders create new homes they offer solar; when homes are sold, buyers are given the option to install solar panels.  It’s not only suggested by the government, but valued by the populous in general — renewable energy is something most Germans care enough about to do something.

The American solar industry seems to have two targets, the technocrats and the “green crusaders.”  The green people talk only to each other and are not mainstream.  Mainstream America does not even want to belong to this group — they will only be green if it is convenient. 

The disconnect lies in the failure to understand why the mainstream isn’t on board.  Where is the leadership in the solar industry?  Respondents did not come close to a consensus because there is no leader, and there is no understanding because there is no end-user data available for mainstream America. 

Delta Market Research Inc. has set its sights on unearthing why things aren’t as they could be for the solar industry.  Targets need to be profiled based on price thresholding and then selected.  Who would benefit enough from solar to purchase, and which targets would spend what?  What exactly drives sales?  Which distribution system works best? 

Twelve percent of respondents have gone out of business in the short time since we conducted our study.  The solar industry’s marketing strategy is on saving people kilowatt-hours.  Does your average American know off hand how many kilowatt-hours they use each month?  Do you?  Does Hershey measure their success by how many pounds of chocolate they produce?  No, they measure it in how many candy bars they sell.  They focus on the only thing that matters: sales.  The solar industry needs to do the same thing, and they cannot do it without end user data. 

Image: Solar panels on roof via Shutterstock

5 Comments

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ANONYMOUS
June 12, 2012
I appreciate most of the comments here, but I start with believing Kevin hit this issue on the head. We need a Truth campaign - no nonsense, here are case studies to match your scenario to. Incentives and REPS have brought huge advancements - opportunities are there for some entities in most any scenario - high-use/high wealth homeowners; large energy users in rural settings; etc.. We need unbiased, state by state, business/residential formulas for how RE makes sense. Leave those on the edge to decide based on helping RE move forward now or wait. We have a capitalist economy, not a totally capitalist society. We have and need government to bring forward-thinking into play, incentivize actions that will yield longer-term results we need.
ANONYMOUS
June 12, 2012
Hear, hear Phil. Who is the leader of the automotive industry? Who is the leader of the real estate industry? Who is the leader of the banking industry? The problem with a "leader" is they can be notoriously wrong, with devastating consequences. The problem with marketing of PV and the kWh it generates is...it doesn't "do" anything. Putting solar on the roof doesn't cook your food in 3 minutes, keep it cold, get you from one place to another, keep you entertained, or allow you to communicate across the world. Ok, it actually does help do all of those things, but you don't see it working. I know that my food is cold because the moving electrons run a compressor to keep the food cold. But the average person doesn't say the electricity keeps my food cold, they say my refrigerator keeps my food cold. When kWh prices start to go up like gas prices have, then people will start to notice. The average American, particularly in this economy, thinks first with their wallet. For right or wrong, we are in a capitalist society. Until the Solar is a "must have" (like a car, gas, or a refrigerator), it will be relegated to the fringe. The question to that needs a solution is how to we accelerate solar to that level. It will happen, but will it be in time?
Tim Braun
Tim Braun
June 12, 2012
Historically there has been too many barriers to private solar ownership to reach the critical tipping point of mainstream adoption. The bright spot, though, seems to be in the distributed energy model, and specifically in community solar gardens. Little time commitment, very small cost of entry, and simple accessibility make this model perhaps the most promising. Companies like Colorado-based Clean Energy Collective are showing strong investor interest and consistent consumer sales. Perhaps unique now, but I wouldn't expect it to be for long.
Phil Manke
Phil Manke
June 12, 2012
Interesting piece, and probably accurate enuff... As far as it went. But.... What does any industry know about what is needed, except for what benefits their own bottom line! You say their are no leaders in the RE field, but their are many pioneers in it. Are they not the leaders?...... however the corporate controlled media chooses to ignore their reasoning? The money is always on what makes money today. They could hardly care less about reason or doing what common sense would decide in the long run. They appear more concerned about forcing their status quo upon an unconcerned and blinded public, led by the best liars the corporate/government dominion can muster. .......Their are many who install solar amenities because it makes good sense, for us, for the world, for the long term net economy, but probably not for the sleeping minions of corporate profit extraction whose entrenched structures are found wanting, struggling, decieving to maintain a hold on their desparate plans to take from others in a world view of lack and failure, which is what they really refuse to admit. Such is the world we have made. All we need do is take a few steps away from the machine and allow a new vision to form with guidance from an inner knowing that may not be willing to compete with TV and mail barages that this world made. In other words, the real world may not be what or where we believed it must surely be. We made a false world in mind, but the real one is still in there also.
Steve Yang, P.E.
Steve Yang, P.E.
June 12, 2012
It is well known that no company made money in the solar industry in the past few years. In fact many were forced to cease operation. Yet, the new installed capacity grew more than double per year. So there is a dichotomy, or schizophrenia, in many players' thinking about coming or going. Besides, people are still confused about the cause of global warming, due to the highly politicized nature of the topic. Our president has not set a good example by pushing whole-heartily for a solar WhiteHouse. The sorry story about Solyndra' collapse added to the confusion and soured the investor community's taste about solar industry. Add to that the mixed feelings among industry groups on import tariff on Chinese modules.

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Kevin Rosenbaum

Kevin Rosenbaum

After graduating from Penn State University, I explored positions that would expand my writing and sales talents before arriving at Delta Market Research, where I have now directed my attention at our new series of studies on the state...
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