Gas, oil, and natural gas have been the main source of energy that support the growth of civilization for many centuries. However, as global supplies decline and the environment becomes more polluted, it’s clear that energy generated from fossil fuels is unsustainable in the long term. Renewable energy provides the alternative energy source; however, consumers are questioning its ability to scale and adapt.
New technology and innovation in recent years has helped, with a fifth of the world’s electricity being produced by renewable energy. Solar, wind, and hydropower support most of the capacity for alternative energy, with solar power being the leading energy source. As studies show great potential for growth in the renewable energy sector, it’s paramount for energy providers to understand their customers and their shopping behaviors in order to capitalize on this rising opportunity.
Benefits of Solar Power
- Solar power’s output is consistently clean and efficient, creating a positive impact on the physical environment, which is driving an increased number of homeowners and consumers to buy into this sustainable energy source.
- The efficiency of Solar power significantly reduces electricity bills for the consumer, resulting in savings that pay off the cost of system adoption in an average of 5 years.
- Governments have also undertaken a cost-benefit analysis exercise for renewable energy sources -- 29 states and Washington D.C. currently have mandatory renewable energy standards; these standards incentivize the increased adoption of energy sources such as solar power in homes and businesses. Incentives such as the federal solar tax credit (ITC) further decrease the initial cost output by as much as -30%.
What is the driving force behind buying solar power?
- Consumer loyalty for companies and products that have positive impacts on the environment is increasing.
- Solar power has increased significantly in the last 10 years, powering just over 2% of American homes by the end of 2017, a 42x increase from 2008 driven by increasingly environmentally-minded consumers, pricing decreases, and tax incentives.
- 67% of consumers are concerned about the environmental impact of energy consumption and make an effort to reduce their carbon footprints, according to a Deloitte Consumer Study; 63% of residential energy consumers say that keeping their energy bills affordable is the most important energy issue for their household, up 5% from 2018.
Who is the Solar Power Consumer?
- The consumer for renewable energy ranges between homeowners, businesses, and developers, whose priorities are to make a positive impact on the environment & reduce their energy costs.
- According to Google trends, the query “solar panels for tiny home” as well as tiny homes as a topic are breakout themes in the solar panel and solar power discussion.
- Individual consumers aren’t the only ones who are looking toward renewable energy; companies from various industries including Walmart, General Motors, Google and Johnson & Johnson are forming trade associations to buy renewable energy, and removing barriers in order to shift away from carbon-based energy.
- Information is often fragmented and inaccurate when it comes to contracts as well as purchasing options, bringing consumers anxiety and confusion, according to “Consumer choice towards Renewable Energy” from the University of Twente in the Netherlands.
Where they live & When do they buy?
- California continues to lead the charge in solar energy; however, future growth is expected across the country as prices continue to fall and legislation continues to incentivize the switch.
- Geographic interest varies; Solar panels as a topic is prevalent in Vermont, Hawaii, Arizona and Nevada whereas home solar panels interest has shifted more towards the South and Midwest, with Kentucky and Wisconsin generating the most search demand.
- Not surprisingly, the search demand for the term ‘buy solar panels’ consistently reached its peak in March, throughout the Spring & Summer months, with interest returning to pre-peak season levels in November, in time for Winter.
The increase in sustainability-minded consumerism has made clean energy a more competitive market, driving prices (materials, installations, etc.) down and making the initial cost layout for homeowners and consumers lower than in years past. However, messaging around new green energy technologies is confusing for residential consumers: in the 2019 Deloitte Resources Study, many consumers responded that they do not understand how to access or implement green options or that these options are too expensive. Opportunity exists for green energy providers to clarify how a consumer can cheaply and easily access and implement solar alternatives.
For organizations looking to make green energy appeal to a wider consumer base, messaging and targeting is key. 80% of consumers “indicated that they care about the use of renewable energy”, however “awareness of renewable energy purchase options remains relatively low”. Consumers are looking to decrease their carbon footprint but want to do so in a cost-effective manner. Providing education around how to access renewable energy options as well as clarifying how much consumers can expect to save in return is essential for energy providers.