Clean Power Finance (CPF) will join forces with a team of researchers to develop a study to identify and assess the key factors influencing consumer adoption and the diffusion of solar technologies and develop actionable ideas which stakeholders within the solar industry (e.g., installers, lead generating companies, original equipment manufacturers or OEMs) and outside of the industry (marketing firms and financing companies) can implement. Specific objectives of the project include: 1) Identify the factors that influence purchase decisions and the process of such decisions (from the awareness of solar to post-installment); 2) Build a predictive adoption/diffusion model suitable for hypothesis testing and determine the combination of factors that would accelerate consumer consideration and acceptance of solar, including exploring innovative financing structures and customer acquisition approaches; 3) Apply insight garnered from the research to pilot programs with businesses throughout the solar value chain, particularly those targeting end consumers.
The team will leverage CPF's unparalleled proprietary consumer data amassed through its industry-leading solar sales quoting software, CPF Tools. This data will enable the research team to analyze the actual behavior of residential consumers when presented with different options for solar and to investigate the correlation between consumer acceptance and different variables, such as total upfront cost, expected dollar savings from solar, or the size of the system. CPF will assist the researcher conducting the primary research by recruiting relevant stakeholders for primary research, including surveys and interviews, and by securing access to different data sources that will enhance the research. Finally, CPF will lead the implementation of pilot projects with various industry stakeholders; the projects will leverage insight from the study and validate or refine key concepts, ultimately leading to a richer understanding and an acceleration of solar adoption.
The project will have multiple research components that will ultimately lead to implementation of pilot programs that will apply the results from the study.
Phase 1 (5 months): The team will gather and analyze data from CPF's database and determine the correlations among the various variables within a consumer proposal, particularly the expected savings promised to end consumers as it relates to end user adoption. These findings will be cross-referenced with publicly available data from sources like the California Solar Initiative, studies on electricity tariffs, and consumer data from various organizations and businesses.
Phase 2 (10 months): The team will recruit installers and end consumers to conduct qualitative and quantitative research to investigate the range of factors that affect the adoption of solar. The analysis will examine the effect of expected savings, or incentives, in the context of these factors. Conjoint analyses will quantify the trade-offs between the different factors (e.g. how much incremental savings is required when the installation is done by a large installer versus a small installer). The information will be incorporated into a simulation and will be refined with Sprint's past research on the consumer adoption of technology.
Phase 3 (9 months): Having properly examined the effects of incentives in the context of other factors, the team will develop predictive models, test hypotheses, and devise product and marketing strategies. CPF will work with various solar businesses, particularly installers, to develop, test, and refine pilot programs leveraging findings from the study.<br /><br />
The solar industry has very little understanding of what is driving solar adoption and how quickly solar can diffuse throughout the U.S. population. Ignorance of these issues often leads to poor decision-making and forecasting (e.g. cycles of shortages and gluts in panels leading to business failures among manufacturers), inconsistent or unpredictable policies promoting solar (e.g., highly variable rebates or solar renewable energy certificate or SREC policies deterring project finance capital), or underinvestment or active resistance from stakeholders with the potential to facilitate massive adoption among solar (e.g., shortage of financing for solar projects). The inability to understand and predict solar adoption, consequently, leads to tremendous frictional costs, which in turn stems the adoption of solar.
A better understanding of solar adoption can provide a multitude of benefits including: informing relevant stakeholders of business practices for accelerated deployment of solar capacity; the investment of more capital to provide greater accessibility to solar financing; the design of more efficient policies to encourage private investment; innovative approaches to reach out to more customers at a lower cost.
To develop this understanding, someone must be able to access existing data sets and overlay them with new ones. Researchers must design a study, produce relevant findings, and disseminate those findings to industry practitioners who can test and further refine the findings.