Solar “Investors” are 70% of Homeowners Considering Going Solar – They Prioritize Long-Term Performance and Warranties By Brands That Help Them Learn About Solar
LG’s Solar business, commissioned the definitive study of homeowners attitudes about going solar after the start of the pandemic. It was conducted by Harris Poll, an independent consumer research firm, to define what homeowners want to get from the experience of going solar – both from the installers and from panel manufacturers. Harris surveyed more than 2,000 homeowners who were either actively considering going solar or had gone solar within the last two years. They also surveyed installers to see how well their views on what homeowners want matched what homeowners actually want.
The survey results provide important consumer insights about investing in solar, brands and warranties that installers should carefully consider.
Residential solar customers don’t want the cheapest system in a $20K investment – they want the best one
A large majority of homeowners considering going solar see it as a long-term investment, not a short-term cost. This is a critical difference because for these solar “investors,” up-front cost actually ranks fourth on the consideration list.
These consumers told Harris they care more about how much of their energy bill will be offset than about installation expense. In fact, 70% of consumers are willing to pay a premium receive a better long-term payback – versus a 30% minority who want to pay less up front to sacrifice long-term savings. Three quarters said they are willing to pay a premium to buy technology that they perceive to be better quality.
Panel brand matters to customers – and that can help build an installer’s brand
As one homeowner told Harris in a focus group session: “….it’s going to be a big investment, something we’re investing in our future. So yeah, that kind of thing is important. I don’t care so much about a warranty on a cheap piece of electronics at Wal-mart.”
Findings from the poll say: “Known brands have the presence to make customers feel secure – these brands have something to lose, which makes them less likely to put out a sub-par product. Homeowners feel much more confident that a known brand will still be in business in the future and will be able to uphold guarantees.”
Harris used “Discreet Choice Modeling” to test this idea to determine if consumers will pay around 15% more for a proposal that was branded vs. unbranded proposals that were identical in all technical attributes. That same exercise provided showed a willingness to pay roughly 10% premium over a generic, “solar brand” with the same attributes. The Harris data says if you are selling panels made by a company that is well known, you can command a 10% to 15% higher premium.
It’s important to explore homeowner perception of solar brands to see if your customer is in the 70% of those who want to pay more for peace of mind, regardless of which brand of panels you prefer to sell.
Consumers will pay more for stronger warranties
When Harris asked consumers who had already purchased solar to rank factors influencing their decision, warranty structure was far below “quality,” “efficiency,” “installer recommendation” and “price.” However, this seemed contradictory to 97% of homeowners saying that “wanting to know the company would be around in 20 years” was “very important” to them. Here we have pre-solar customers saying warranty is very important, but post-solar consumers finding it didn’t matter as much.
Harris looked at different warranty structures – some that included a labor reimbursement versus ones without. They also tested those covering the degradation rates without providing the context of what the value of the different levels of power-competing panels generated.
The warranty style that held the highest value for consumers was the low-degradation, “Triple 25.” This warranty structure with a 25 year limited product warranty and .33% degradation curve wrapped with a labor reimbursment was almost twice as valuable as a “standard” 10-year product, 25-year performance at .7 percent degradation rate warranty. Consumers indicated they’d pay as much as 25% more for a warranty covering product, labor and performance. This is in contrast with how installers rate warranty structures – they say they think it’s relatively low in importance for consumers.
In the eyes of homeowners who are solar “investors,” the warranty structure and its associated value are really important. Companies offering a strong warranty have a significant asset – but only if the they explain the warranty’s specifics and its value to the customer in plain, compelling language.
Consumers face competing quotes from companies all pitching different products, various financing options, and differing technology types. In a strange way, the similarities actually make the process of going solar intimidating to consumers.
Before the pandemic, the way the industry had been selling solar had some weaknesses:
- Installers typically sold on price, not long-term value.
- Installers under-explained warranties and system performance, as well as their importance.
- Many installers shied away from using their manufacturers’ brand as complementary to their brand.
In this socially distant selling environment, those weaknesses can’t be overcome with effective, in-person conversations. All the action is happening by phone, videoconference, internet searching or social media.
The good news is that consumers have given us new insights into their preferences. To succeed in the new environment, the conversation needs to switch from a “cost” to an “investment” paradigm. And, installers can improve margins by meeting homeowners where they are at. Early-stage customer education has to include leveraging brand equity from those manufacturers who can provide it, and explain the full value of a system’s lifetime performance.
Homeowners considering going solar have spoken. It’s up to us to hear and act on what they are saying.
Brian Lynch leads solar business development for LG Business Solutions USA, the B2B division of LG Electronics USA.