How to Turn Solar

‘Considerers’ Into Solar

Adopters

A survey from NREL and the solar industry takes a deep look at the

layered solar customer decision process.

by James Tong, Alison Mickey

June 20, 2016

Selling solar is a two-step process: get the customer to consider solar

(lead generation), and then get the customer to buy (sales conversion).

As most industry professionals know all too well, a lot of people take the

first step but never make it to the second. A U.S. Department of Energy

program called Solar Energy Evolution and Diffusion Studies (SEEDS)

seeks to understand why people make the “switch,” and how to bridge the

gap between thinking about and actually going solar.

The National Renewable Energy Laboratory, Spruce Finance and others

undertook a SEEDS project that looked at the differences between

“considerers” (those who have spoken with installers about solar but

haven’t invested) and “adopters” (those who actually made the switch to

solar): Are the groups demographically different? Do they approach the

buying process differently? And most importantly, what does it take to get

considerers to become adopters?

The study

We surveyed a total of 3,592 people (1,662 adopters, 589

considerers, and 1,341 homeowners from the general population who

hadn’t spoken to any solar installers) in California, Arizona, New York and

New Jersey. We excluded people who wouldn’t normally qualify for

rooftop solar, such as renters. We then dove deeper into the adopter

population to determine what influenced their satisfaction and willingness

to recommend solar to other considerers (we’ll cover this in a second

article). This study also leveraged findings from previous research on

solar adoption, as well as literature on consumer marketing anddiffusion

of innovations.

Finding No. 1: Customers’ concerns about solar

will depend on their familiarity and their stage

in the sales process

Our data suggests that getting customers to consider solar is

opportunistic (e.g., installer approaches customers) or event-driven (e.g.,

sticker shock on bills or moving to a new house). Economics was the

biggest overall driver of interest in and adoption of solar. But others

factors are at play, which suggest that sales conversion is a layered

process that depends on customers’ fami liarity with solar. Those less

familiar with solar tend to have more basic concerns about the suitability

of solar for their house, the dependability of photovoltaics, and the

accuracy of information about solar (Fig. 1).

Figure 1: Two-Step Process of Getting a Prospective Solar Customer

to Become an Adopter

Those who are considering solar are more likely to know of others with

solar and perceive personal benefits; unsurprisingly, they have second-

order concerns, such as finding trustworthy or competent installers.

Installers will need to address these concerns sequentially, as the

customers become more engaged with solar. For instance, it probably

makes little sense to discuss solar financing options with a customer who

doesn’t know whether her roof is even suitable for solar. A separate

study suggests that it’s better to focus on the one benefit that best meets

the customer’s needs rather than provide a list of benefits, some of which

may not be particularly relevant to the customer.

Finding No. 2: More competition can be a good

thing

For most installers (and most businesses) more competition is a bad

thing; it drives down prices and siphons away potential sales. However,

competition can be helpful when a product is new and poorly understood

by the general population -- as is largely the case with rooftop solar. More

companies installing rooftop solar will increase customer exposure to

solar, which in turn increases the likelihood of considering solar as an

option (Fig. 2). For instance, in California, which arguably has the most

competitive rooftop solar market, survey respondents reported high

familiarity with solar, perceptions of strong social support, and high levels

of assurance of rooftop solar’s suitability for their homes. In other words,

more competition will likely lower barriers to step one of the solar

adoption process. It may, however, increase barriers to step two

(converting leads into sales). That being said, solar companies are far

more likely to lose considerers to uncertainty and doubt than to other

competitors.

Figure 2: Consideration and Adoption of Rooftop PV Is Strongly

Correlated With Customer’s Exposure to Solar

Finding No. 3: There’s a lot more potential than

you think

There are nearly 10 times as many considerers as there are adopters. But

only 11 percent of considerers have stopped shopping for solar

altogether. The rest are either still considering it or have decided they

want solar but have yet to sign. That means 84 percent of considerers are

potential customers. This is significant: on average, out of 100

considerers, a solar company can expect to get between one and three

adopters. If installers can capture even a portion of the remaining 84

percent of potential considerers, they could significantly increase sales.

Finding No. 4: Considerers and adopters are

very similar

We found that considerers and adopters are demographically similar.

They have comparable education levels, financial circumstances and

political stances.

Figure 3: Select Characteristics of Solar Considerers and Adopters

In fact, liberals and conservatives seem equally likely to consider and

adopt solar, though they do so with different motivations. For example, 85

percent of liberal considerers stated reducing their environmental impact

was a very or extremely important motivation for them when considering

solar -- only 56 percent of conservatives reported the same level of

importance. In contrast, 83 percent of conservative considerers said that

protecting their families from rising electricity prices was an important

motivation, as compared to 76 percent of liberals. One thing was clear --

saving money on energy bills is a bipartisan issue (92 percent of

conservatives, 87 percent of liberals).

In general, people’s motives and concerns in thinking about solar are

similar, with finances and savings at the top of the list. Economic motives

and concerns appear to span all demographics and political beliefs.

Figure 4: Motives for Going Solar

While considering solar panels, how important were each of the following

factors for you?

Figure 5: Concerns About Going Solar

While considering solar, how concerned were you about the following?

Finding No. 5: The big difference? Financial

resources

Unsurprisingly, considerers face more difficulties in the solar sales

process than adopters, including getting everyone in the household to

agree, finding a competent installer, and permitting and zoning

restrictions.

Figure 6: Difficulties in Trying to Go Solar

While considering solar, how much difficulty did you have with the

following?

But the biggest difference was that considerers were more sensitive to

monetary issues. Considerers reported more modest income, while

adopters reported far less difficulty coming up with the money to go solar.

Considerers were about 39 percent more likely than adopters to report

ROI as a very important factor in their decision, and about 28 percent

more likely to report improving home value as a very important factor. In

all, coming up with the money to go solar was the most common difficulty

that stopped consideration (49 percent of considerers), followed by

finding a trustworthy and competent installer (32 percent) and home

suitability (30 percent). (Responses do not sum to 100 percent since

respondents marked all difficulties that stopped them.)

Figure 7: Income Distribution of Solar Considerers and Adopters

Economic factors, including the desire for better financial outcomes and

the ability to afford rooftop solar, seem to be the biggest difference

between those merely considering solar and those who have made the

switch. We don’t know whether considerers faced more job insecurity, had

more existing debt, or had lower credit scores that disqualified them from

solar financing (these were not questions included in our study), but we

did find that considerers are more concerned about debt, with 57 percent

reporting that they are “somewhat to extremely concerned” about taking

on debt or signing a lease, versus 31 percent of adopters with the same

apprehensions.

Finding No. 6: Rooftop solar follows typical

patterns for diffusion of innovation

The findings are consistent with prevailing theories on how new

technologies spread. Prior research has shown that earliest adopters of

innovations are more comfortable with unproven technologies and often

see themselves as trendsetters. Later adopters are driven by a stronger

sense of practicality; they would prefer to wait and see whether a

technology works as promised and provides lasting benefits before

investing in it. Though both considerers and adopters reported non-

economic motivations (which is to be expected, since solar is still at the

beginning of its adoption curve), considerers reported more practical --

that is, monetary -- challenges and considerations in making the switch.

As rooftop solar spreads, the industry will increasingly encounter

customers who will want more certainty about the benefits of solar relative

to perceived total costs, which include the risks of things going wrong.

Nine things the industry can do to convert

considerers into adopters

1. Avoid the 7 common sales and marketing mistakes.

2. Don't give up on old leads. Just because they didn't go solar

doesn't mean they're not interested. It's more likely that the time is

not right (for instance, they can’t afford it this year), or they wanted

to shop around some more. With the cost of solar going down every

year, prices will eventually reach many considerers' comfort level.

And as considerers see more people going solar, that social

validation can help convince them to make the switch. Periodically

check in with early considerers (not too frequently, or they might

feel hounded) to see if they’re ready to adopt.

3. Keep track of your leads by using a customer relationship

management (CRM) application or database. Most installers

interviewed, including larger companies, did not systematically track

old leads, or couldn’t readily retrieve information on them. A CRM

application can help you prioritize old leads and set automatic

reminders for periodic follow-up calls.

4. Understand your customer’s needs. Take time to find out early in

the sales process whether the considerer prefers to have control

over the system or to leave the maintenance and monitoring up to

you. If you recommend a product that meets the considerer’s

preferences, you’re more likely to close the sale than if you try to

sell a loan to someone who might prefer a PPA (or vice versa).

5. Get independent verification. You can’t try before you buy with

solar, which often makes people nervous. Existing misperceptions

about the cost and savings of solar, compounded by confusing,

contradictory, scary, or too-good-be-true claims make it difficult for

considerers to identify understandable and credible sources of

information. Thus, potential customers rely on verification of

installers and contractors by credible independent sources. These

can include: NABCEP certification; online reviews on sites like

Google, Yelp and Facebook; references from past customers (see

No. 9); or adoption of solar business codes like that of the national

Solar Energy Industries Association (SEIA). Getting accredited,

signing on to a business code, and monitoring and addressing your

online reviews can go a long way to establishing your credibility.

6. Evolve your sales tactics. It’s no longer always about the

immediate close: as solar becomes an increasingly mass-market

product and service, future solar customers will expect to be able to

shop around and have time to consider their options. Quick or hard

sells may have worked on adopters in the past, but future

considerers will likely need more time to think or require more

validation that what you are promising is legitimate. Providing

educational information and advice and becoming a trusted

resource while they shop around may be better than a “buy now,

before it's too late!” tactic.

7. Find new points of differentiation among your competition . As

the residential solar market matures, it will become more

commoditized. Future solar adopters will be more price-sensitive

and less forgiving than early ones. Standing out in a crowded field

will be more difficult (that’s already the case in saturated markets

like California). You can protect yourself against cutthroat

competition by differentiating your business in other ways than just

price. For instance, you might: build your reputation in specialized

markets (e.g., installations in certain locales or for certain types of

customers or homes or roofs); obtain independent validation (see

No. 5); grow a base of satisfied customers (see No. 9); or provide

value-added services or additional technologies (e.g. storage,

HVAC, smart thermostats, etc).

8. Grow your business for the long term. A race for a bigger piece

of the residential solar market can be very costly. Overly aggressive

growth plans can incur fixed business costs (e.g., larger

warehouses, more installation trucks, greater administrative

overhead, etc.) too rapidly, which then forces you to rush sales or

pay more for customer acquisition. Moreover, later solar adopters

will be more likely to shop around and more resistant to high-

pressure sales tactics; a rushed sale will likely lead to higher

dissatisfaction, fewer referrals, and perhaps more negative reviews

-- all of which can materially impact your business. At less than 1

percent penetration in almost every state, the residential solar

market offers plenty of opportunities. You may be better off,

especially if you’re small and have less working capital, focusing on

growing profitably, rather than growing fast.

9. Make sure your existing customers are happy. Referrals are still

by far the most cost-effective way to acquire customers and may

remain so as customers become even more resistant to traditional

sales and marketing approaches. To get referrals, you need

satisfied customers, who will also be more likely to provide positive

reviews online and serve as references. (Conversely, a dissatisfied

customer can prevent you from making new sales.) Don’t just forget

about old customers -- it may be worth checking in with them on

occasion to confirm things are working and that they’re happy. You

can use that opportunity to ask for referrals or online reviews. The

solar industry in general needs to do its part to ensure adopters are

happy by promoting consumer protection standards and educational

materials -- and holding bad actors accountable.

The good news is that solar customers seem to be overwhelmingly

satisfied with their experience and with solar. In Part Two, we will

examine what drives that satisfaction.

***

The authors are James Tong (CEO, Advanced Grid Consulting) and

Alison Mickey (Sr. Dir. Corporate Comms, Spruce).

Project contributors included: Lawrence Berkeley National Lab, National

Renewable Energy Lab, Portland State University, Social and

Environmental Research Institute, Spruce Finance, University of Arizona,

and University of Michigan.