Blogs, Solar

Brand Preference in the PV Marketplace: The Most Promoted PV Module and Inverter Brands in the U.S. and Canada

Author: Justin Malecki, PhD /// Analyst at ClearSky Advisors

Imagine for a moment that you are shopping for a computer when you are approached by a salesperson for a particular brand of computer you haven’t bought before.  Deciding which computer to buy is a complex decision to make, much more so than making decisions about simpler consumer products such as soft drinks or toothpaste. For most people, much of the technology in a computer is too sophisticated to properly understand or assess, a fact that may keep you from making a decision.  Complicating matters is the inherent lack of trust you place in the salesperson and the marketing material she presents. 

In light of these factors, you may decide to seek the advice of a trusted friend or colleague to make your decision.  A recommendation from such a trusted person would enable you to instantaneously overcome the knowledge and trust deficit that occurred with the salesperson.  The value placed in your colleague’s reputation serves to greatly minimize the perceived risk in your mind that naturally occurs due to your lack of knowledge with such a highly technological product.

For this reason, gauging the likelihood for users to recommend particular brands to a friend or colleague is widely considered to be a much more effective measurement of brand preference than other indications such as customer satisfaction or “brand recall”, especially for products that involve a complex decision-making process.

Deciding which brand of PV module and inverter to use for a given project involves a decision-making process no less complex than that of buying a computer.  By measuring the likelihood that installers, integrators, and developers, herein collectively termed “buyers”, will recommend a module or inverter to a colleague, we are able to develop a powerful metric that impacts brand preference in the PV market.

Furthermore, the degree to which users are willing to recommend a particular brand is a direct measure of the potential for word-of-mouth marketing, a form of marketing that is very difficult for individual manufacturers to influence or control.

For this reason, ClearSky Advisors has quantified the likelihood to recommend the most used brands of modules and inverters in both the American and Canadian PV marketplaces using the metric of Net Promoter Score.

Net Promoter Score as a measure of recommendation

Net Promoter Score (NPS) is an index introduced by Frederick Reichheld in a 2003 article in the Harvard Business Review to measure the level of recommendation for particular brands.  Calculating the NPS for a given module or inverter brand begins with asking buyers “How likely would you be to recommend this brand?”.

ClearSky Advisors accepts answers on a 5-point scale, ranging from “Very Likely” to “Very Unlikely”.  Buyers are then classified as follows:

Promoter – answered “Very Likely”

Passive – answered “Somewhat Likely”

Detractor – answered “Neutral”, “Somewhat Unlikely”, or “Very Unlikely”

The NPS for a given brand is then calculated as:

NPS = (Percentage of users that are promoters) – (Percentage of users that are detractors)

The result is a scale ranging from -100% (all users are detractors) up to 100% (all users are promoters).  Generally speaking, scores greater than 50% are considered very good while scores less than 0% are considered low.  See Figure 1.

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                 Figure 1: Net Promoter Score scale


Top module and inverter brands from ClearSky Advisors’ U.S. and Canadian Buyer Studies

ClearSky Advisors has calculated the Net Promoter Scores for the most used brands in Canada and the U.S. as part of their regular Buyer Surveys in those two regions.  Each study describes the results of in-depth surveys of 76 and 74 installers, integrators, developers, and distributors in the US and Canada respectively.  While the U.S. survey gathered information from buyers working across the U.S., the Canadian survey focused solely in Ontario where the vast majority of Canadian PV installations have occurred.

In Table 1 we have collected the highest-ranking module and inverter brands in the U.S. and Canada along with their respective NPS scores.  These top ranking numbers are compared with the average NPS within each market and region, calculated by combining the likelihood to recommend each of the brands that were reported into a single average net promoter score.

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Table 1: Most promoted module and inverter brands

We see that, on both sides of the border, SMA is the inverter brand most likely to be recommended with NPS scores of 77% in the US and 64% in Canada.  Both of these scores are considered very high.  Further, SMA has consistently obtained the highest NPS score in every ClearSky Advisors Canadian Buyer Study dating back to January 2011.  Such strong numbers indicate that SMA enjoys a very high brand preference in both the US and Canada.

When it comes to modules, SunPower has the highest NPS in the US with 69% whereas Sharp emerged on top in Canada with 36%.  SunPower’s NPS is quite high, similar to the high scores seen in the inverter market, whereas Sharp’s NPS of 36% is considered average or neutral.   

It is interesting to note that both SunPower and SMA have well-organized and dedicated training programs specifically devoted to their own products.  In fact, completion of SunPower’s training program is required of everyone who wishes to use SunPower modules.  Such focused and widespread training may play a significant role in the high degree to which these brands are likely to be recommended.


Further insights beyond Net Promoter Score

Although the current net promoter scores of module and inverter brands is an important and powerful metric of brand preference in itself, additional insight can be gained by correlating the NPS with other information gathered from survey respondents. 

Take, for example, users of Enphase inverters in the US.  Enphase achieved a very high NPS of 73% in the U.S., second only to SMA.  This indicates that Enphase has a significant number of buyers among those surveyed who are very likely to recommend that brand and it is interesting to take a closer look specifically at what these Enphase promoters consider most important when shopping for inverters.

In Figure 2, we have compared the most important inverter buying criteria of Enphase promoters to those of all other survey respondents.  The “Normalized Importance Score” plotted on the vertical axis is an index indicating how important the criteria is to those surveyed.  Of particular interest is the fact that Enphase promoters consider the price per Watt of inverters to be far less important than others surveyed.  On the other hand, Enphase promoters value the warranty coverage of an inverter much more highly than others, considering the inverter warranty second only to reliability in importance. 

Having customers that are likely to recommend your brand is highly valuable and it is of great importance that equipment manufacturers understand this class of brand promoter, both for their own brands as well as for others.

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Figure 2: Notable inverter criteria for Enphase promoters


The benefits of communicating module and inverter brand preference

Given the challenges that currently exist in the PV equipment marketplace, it is becoming increasingly important for module and inverter manufacturers to distinguish their brand from those of their competitors.  The degree to which buyers are likely to recommend their brands to a colleague or friend, as quantified in the net promoter score, is a powerful measure of preference for individual brands in the marketplace.  By correlating the net promoter score with other buying preferences and behaviors, one can determine the relative positioning of each brand in the marketplace and, in so doing, determine the most advantageous position for one’s own brand within that environment. 

Although very powerful, a brand’s net promoter score is but one measure of brand preference.  Other metrics that are used in ClearSky Advisors’ Buyer Studies include brand exclusivity, share of wallet (i.e. the average fraction of sales devoted to a particular brand among its users), and market share.

Of course, manufacturing companies are not the only ones to benefit from this knowledge.  By communicating such information between buyers and sellers of PV equipment, the PV industry as a whole stands to gain by accelerating the modes of communication between those who make the products and those who use them. 

The result: a more efficient marketplace with a satisfied customer base.