Just like any other businesses out there, it’s crucial for solar installers to know all about their potential customers. After all, knowing your potential customers is simply the surefire way to actually succeed in the business. You’ll be able to create amazing buyer personas, and those buyer personas will definitely help you in the long run, particularly in the marketing side of things. So, yes — knowing your potential customers? It’s highly imperative.
But for a lot of solar installers, they don’t know where to begin in looking for potential customers. The world is wide, so how in the world could they zoom in and find the ones they’re looking for? If that’s the case, there’s no need to worry. Because if you’re still unsure of where to start in looking for your potential customers, the best thing you can do is to simply look up research findings of solar customers. Those research findings will do wonders for you in determining where to begin.
Here are a few research findings to help you get started:
Finding #1: There are three market segment pillars for solar in the U.S — residential, utility, and commercial.
In the United States, there are three market segment pillars for solar. These are 1) residential, 2) utility, and 3) commercial. Out of these three, residential is the one that’s growing the most steadily. This is primarily because homeowners are the ones that pay the highest electric rates and also because the solar installation for residential is relatively a lot easier compared to the others. As a result, it has been estimated that 5 to 7 million solar panels were installed on American homes in 2018.
But even though residential is steadily growing, the biggest market segment for solar is actually the utility. In 2018, an astounding number of 20 million solar panels have been installed by utilities. The primary reason as to why the utility market segment is large is because utilities realize that power generation through solar is cheaper a lot cheaper than coal or nuclear generation. Additionally, the combination of solar and batteries is expected to get even cheaper than natural gas in the near future.
The third market segment for solar is the commercial, and though this is also growing, it has a lot of factors that are challenging its growth right now. These factors include a lack of efficient financing, slow decision-making, and relatively high costs. But in a few years, luck may come in favour of commercial solar. It has been suggested that this particular solar segment will grow more quickly in the future and become as big as the residential and utility solar segments.
Interested to learn more? Listen to the podcast here.
Finding #2: Residential solar is not just for rich people anymore.
If you’ve found yourself in a discussion about solar power, chances are you’ve heard the argument that though it is a great source of energy that everyone should get on board with, not everyone can do so because solar power prices are too high. In other words, the only ones who can afford solar power are, well, the rich.
But according to new research conducted by GTM Research and PowerScout, that argument may well be a myth. This study examined the household income differential between solar and non-solar homeowners in California, Massachusetts, New Jersey, and New York, and in these states, there are 65% of all residential installations in the country. And in further examining the data, GTM and PowerScout discovered that 70% of solar households have a median income between $45,000 and $150,000. In other words, middle-income homeowners make up 70% of solar customers.
Interested to learn more? Read more here.
Finding #3: Commercial solar is hard.
It’s mentioned earlier that the growth of commercial solar is not as fast and large as residential and utility. One of the primary reasons for this is that paybacks for commercial solar have historically been longer than CFO’s would like. And the second reason is that the financing structures for commercial solar are intensely complicated.
Even if an office building owner is open to the idea of obtaining a solar installation, there’s still the question of who pays? And after that comes another question of who gets the tax credit? In other words, there are a lot of factors that one has to consider before deciding to obtain a commercial solar installation.
Interested to learn more? Listen to the podcast here.
Finding #4: New financing options for commercial solar are changing the picture.
In an effort to get the swing of commercial solar going, financing options are constantly offered to those who are interested. But there are just some options that are not as ideal as the others. For example, both leases and Power Purchase Agreement (PPA) help in reducing operating costs. But all the same, they are not necessarily good long-term investments. Luckily, there are other financing options out there that are actually a lot more appealing.
To begin with, banks are now getting more involved in providing secured solar loans that offer relatively low-interest rates. Additionally, Property Assessed Clean Energy (PACE) loans also exist, and they are perhaps the most significant innovation. PACE loans are secured by the property itself, and they are paid back as part of annual tax assessments. So, if the property is sold, the loan on the solar improvement will automatically go to the new owner. And if the property is leased to a tenant with a triple net lease in which the tenant pays an allocated part of the property taxes, then a portion of the solar repayment loan can be automatically passed on to the tenant, who, in exchange, gets the benefit of free solar electricity. In other words, PACE loans are truly a game-changer.
Interested to learn more? Listen to the podcast here.
Finding #5: A new class of solar consumers — the solar window shopper — is now hitting the market.
As solar installers, you put a lot of effort and energy into educating your potential customers. But sadly, it’s a reality that no matter how much effort you’re going to put, sometimes, it still won’t translate into a sale. In other words, it’s a reality that just like other businesses, solar “window shoppers” exist. And this should be a reality that needs to be embraced instead of dismissed.
Window-shopping is simply just a crucial phase for a lot of consumers. They don’t really purchase products on a whim all the time. For a majority of their consumer experience, they spend a lot of time — hours, days, even months or years — researching different features of a certain product, prices, and reviews. And they’ll only make the purchase once they’re completely knowledgeable and are now absolutely sure.
The solar installation business is no exemption for this. After all, a solar energy system typically costs around $10,000 to $20,000. With that, of course, it’s understandable that solar consumers would want to window-shop first.
Because of this, the solar industry should make it a priority to make window-shopping easier for consumers, not harder. The industry should make it easy for potential customers to learn about their options and prices without having to speak with a salesperson. The customers shouldn’t have to feel the pressure of having to buy a solar energy system right then and there because the salesperson is more focused on closing the sale instead of just educating the customers first.
Instead, what the solar industry can do is to provide the customers with an easy way to “window-shop” — in other words, to research — solar installation services first. That way, more people would be converted into solar customers. And the industry would grow much faster than ever before.
Finding #6: Solar sales can change if the community solar model catches on.
It’s true that it can cost between $10,000 and $25,000 to install a solar panel system on a home. And plus, there are the other inconveniences such as being a renter or having a roof that’s too small or shady for panels. With these factors, it is safe to say that solar isn’t available to about half of all North American residents and that if you want to have one, then you have to have thousands of bucks to spare.
However, all this could change if the community solar model catches on. Community solar makes renewable energy accessible to more people, and proponents also claim that it has the potential to alleviate energy insecurity. Reports have shown that in each month, one in three Americans struggles with choosing between paying their bills and for other necessities. So, if community solar would be implemented, utility bills can be lowered, and communities would be given control over how they produce and consume energy.
Finding #7: Solar installation costs are falling at an accelerating rate.
According to a study conducted by EnergySage, installation costs are falling at an accelerating rate. Gross system costs dropped 6% last year to an average of $3.36/watt — this is the biggest annual decline seen since the firm began issuing the report. In two Midwestern states surveyed, Ohio and Illinois, the average is even lower, reaching $3.01/watt and $3.27/watt, respectively.
When it comes to what solar consumers are looking for in solar panels, most of them cite “best value” as the highest priority, followed by “highest production” and “most advanced technology.” What does this mean then for installers? Perhaps this: installers should find the sweet spot between cost competitiveness and high quality.
For solar installers, getting to know all about your potential customers is important. But it’s also a daunting task to do. After all, the world is wide and large, so how exactly do you know where to begin? In that case, it’s always a good idea to look up research findings on solar customers. This is simply because these research findings will give you tremendous insights into the trends and behaviours of the customers. And these insights will ultimately help you in your business, particularly in the creation of your buyer personas and in the upcoming marketing steps.
So, presented above are a few of the most popular findings on solar customers. These are findings on their financial problems, their tendency to window-shop and how the industry should deal with it, and the implication of community solar. Undoubtedly, there will still be more findings in the future, and for that, you should be ready. These findings are incredibly valuable, and they truly are worth the read.
In the fight against the climate crisis, Willie Jiang believes that content marketing can push the energy revolution along at a faster pace. Having helped countless brands grow their organic traffic by 10X and became the CMO of SolarFeeds.com, he is sharing his insights with the solar energy industry. Read his story here