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Not so long ago, putting solar panels on a home was largely the domain of hobbyists or activists - not the kind of purchase most consumers would truly consider. This trend has changed remarkably in recent years.

As energy costs continue to rise, prices for PV modules continue to fall and installation processes become faster and easier, solar is quickly becoming a practical matter of economics for many homeowners. Solar panels are being integrated more thoughtfully and elegantly than ever before, and more new homes are equipped with them.

Just as hybrid cars have turned the corner from an exotic fringe market to head-to-head competition with traditional automobile models, the solar lifestyle has taken on a different image in consumers’ minds, and solar products of all kinds are gaining cachet as a smart choice.

The solar sector today has a historic opportunity to move squarely into the mainstream and establish a sizeable and enduring presence in the consumer market. There is still work to do before we declare victory, though. It is not enough to improve the technology and economics of solar; it is just as important to increase the sophistication of the way we address our customers, from marketing and branding to the ways we make our products available to buyers.

Quite simply, it is not about the panels anymore; it is about the people whose homes we power, the money they save and the opportunity to improve their quality of life with one significant, yet simple, change.

 

Module tipping point

In large part, the mainstreaming of solar is simply a matter of math. Energy rates rise an average of 6% each year, making consumers increasingly - and painfully - aware of the bills they pay each month. Meanwhile, over the past four years, improvements in manufacturing and increasing competition have led to plummeting costs for PV modules.

With panel prices steadily declining from $4.00/W to the current rate of $0.79/W, consumers can now tap into their own solar resources for significantly less than ever before. Grid parity is now well within reach and actually attainable today in some areas. A PV installation is starting to make the same kind of sense as switching to a diesel or hybrid vehicle in the face of soaring gas prices.

Meanwhile, buyers no longer need to wait long for installation. As name brands and upstart providers battle for consumer rooftops, they are taking advantage of improved manufacturing yields and better designed products to get panels in place faster than ever.

Of course, the news is not necessarily good for every solar panel manufacturer, with some driven out of the market by price competition and dwindling margins. But for those who can weather this transitional period, there is a real opportunity to achieve greater stability through a broader sales base. For downstream providers, rising business volume brings increased buying power to fuel continued price reductions, further increasing the consumer appeal of PV modules.

With prices continuing to drop, people start to think differently about the role solar can play in their energy mix. We have already seen a similar dynamic at play in the hard drive business; as performance and capacity soared, storage costs fell, and hard drives quickly branched out from computers to take root in devices from game consoles and DVRs to car stereos.

As solar becomes simpler and more affordable, it no longer takes a major engineering project for installation to be worth it. Even a modest 2 kW to 3 kW system can be sufficient to offset the top tier of a consumer’s energy bill. At the high end, larger consumer and commercial projects can offer economic advantages too significant to overlook. As people put more modules in more types of places, the growth of the market is amplified further.

 

 

New messages

To recall another analogy from the past: The satellite TV industry did not take off until huge backyard dishes were replaced with compact receivers that could be installed easily on a wall or rooftop. Just as important, though, was the shift in marketing emphasis from gadgets and components to the programming they made available.

Today, our industry is poised to make a similar transition. Remember, most people do not want solar panels; they want lower energy costs.

To date, the consumer presentation for PV modules and installation has tended to reflect our hobbyist roots, with endless details on materials, grid mechanics, watts and the inner workings of inverters. Manufacturers wanted to show off their technical innovation and their mastery of the science of solar.

But the types of buyers who respond to messages like these have already been paying close attention to the market. They are the low-hanging fruit of our sales efforts. To reach mainstream consumers, we must deliver mainstream marketing based on benefits-driven messaging and branding.

It is time to put our components and specifications on the back of the brochure and lead with what they really mean to the people who buy our products: lower monthly utility bills, a long-term hedge against rising energy costs and a more self-sufficient way to power our modern lifestyles.

Glamour shots of solar cells are already being replaced with smiling faces and stylish homes on industry websites, with financial calculators that spell out the consumer’s return on investment more clearly than any technical discussion could. The message is simpler but far more effective: Going solar is simple, it can save you a lot of money, and you do not need to live any differently.

Secondary messages can add inspirational overtones to the core economic message. Think about core American values, such as innovation, independence, self-sufficiency and a pioneer spirit - all of which apply well to solar adopters. Going solar no longer has to be a political statement, as it seemed to be when President Jimmy Carter put panels on the White House (which President Ronald Reagan later removed). Now, solar is a common-sense decision that reflects widely shared national virtues.

 

Modern shopping

As we refine our marketing messages, we also need to make sure we are ready to do business with a new generation of customers. In a time when e-commerce and mobile shopping have made even large purchases simple and convenient, the customer experience offered by our industry remains all too intimidating.

For many consumers, contemplating a solar installation brings to mind baffling conversations with condescending engineers and sales offices more inviting to a contractor than the average homeowner. If people can shop for, outfit and order the car of their dreams from their mobile devices, shouldn’t they be able to at least begin configuring their solar project online?

The drive for a better customer experience will be aided by ongoing consolidation among installation providers, as the combined market share of the largest resellers has risen from 33% to 66% over the past three years. Not only are larger providers better able to compete on price, they can also build the more sophisticated marketing organizations and call centers needed to connect with and support mass-market customers.

In time, we will see the rise of a handful of solar-themed energy superstores, where people can get everything from expert advice and service for a large-scale PV module installation to chargers for their electric cars and LED lighting for their homes. To date, consumers have shown little preference among module producers or other solar brands, but for the company best able to demystify our industry for the broad consumer market, there is an opportunity to be the Apple of solar.

The growth of more powerful national brands will not change the fundamentally local nature of solar installation. As with any construction-­related business, locally owned and operated offices will always play a key role in bringing solar products to the market.

Utility rates, microclimates, government regulations and consumer preferences all vary significantly state by state. Consumers will continue to need expert advice and assistance, from dealing with local permitting offices and utilities to securing the most talented labor.

The most successful businesses will be those that combine large-scale efficiency and marketing sophistication with community-based resources.

Although sales of solar more than double each year, as an industry, solar still has less than 1% penetration of the U.S. energy market. There are tremendous opportunities at hand for players in every part of the space, as long as we can continue to make our products relevant and accessible for consumers.

Along the way, we will need to stay focused on innovation - from module manufacturers to inverter suppliers to solar integrators - to expand the benefits we deliver. Advocacy in public policy is equally critical, in areas such as keeping net metering in place, preventing counterproductive new regulations and addressing the existing subsidies of other forms of energy which can place solar at a disadvantage.

Taken as a whole, though, it is clear that the current state of the global energy market, the advancing technology of solar production and the evolving mindset of today’s consumers are all fully on our side. R

 

Joe Bono is the president and CEO of Solar Universe, a franchise solar installation company based in Livermore, Calif. The company can be contacted via solaru@sutherlandgold.com.