The California solar homeowners I work with are acting pretty “weird” compared to the rest of America. This summer when the rest of America will be keeping their thermostats set at higher than desired levels to avoid the dreaded high monthly electric bill the solar customers I know will be running their homes at a pleasant 72 degrees with no fear of receiving a huge electric utility bill. In fact, many of them love solar electricity so much they are pulling out their gas appliances and re-engineering their homes to be total electric. These homeowners are really out of step with their fellow Americans in terms of leasing electric cars that they fuel “for free” from their solar systems. Is this the real future for Earth Day or just more California weirdness?
Public policy issues when solar is price competitive in all states
Deutsche Bank predicts that solar electricity will achieve grid price parity in all fifty states by 2016. My experience with leading solar companies is that their business goal is nothing less than squeezing every nickel possible out of the cost of solar to enable prices that are lower than the retail prices of electric utilities across America. Achieving this goal will be a sea changing (and weird) moment in history that will generate grass roots political pressure for questioning utility rules and rate designs that can inhibit installing solar at homes and businesses.
This type of public policy questioning took place in California over the last decade. The resulting change in public policy has enabled California homeowners and businesses to easily and economically net meter their solar power against their utility bill. California’s public policy also allows third party financing of solar systems. This public policy has sparked highly competitive lease and power purchase offers to homeowners with zero down for the installations of a system plus a guarantee that the homeowner’s monthly solar bill will be lower than their historical monthly electric utility bill.
California homeowners that buy their solar system, rather than finance through a lease or power purchase agreement, can use the Federal Investment Tax Credit to cut their incomes taxes (utilities are afforded these same tax credits). The tax credit plus the cost savings of the solar system combine to achieve solar prices of ten cents or less price per kWh levelized over twenty years. Financial research suggests that a homeowner investing in a solar system will earn more on their solar system than if they invested their money in the S&P500!
How cheaper solar power are making people act weird
What I have found fascinating is how California’s solar homeowners are reacting to being freed from the fear of receiving a high monthly electric bill and anticipated utility rate increases. Beyond their restored joy of being able to run their air conditioners when it is hot outside without fear of a budget crushing electric utility bill they often use their monthly electricity savings to pay the monthly lease on an electric car. (Free car!) They plug their EV into their home’s net metering solar system to recharge the car for the next day’s use. (Free and clean fuel!) The economics of homeowner solar power is a major reason why half of all electric cars sold in America are sold in California.
Solar marketing is weird and coming to America!
The Shelton Group has done pioneering work on how to successfully market a sustainable product. They found that you CANNOT convince a consumer to implement a sustainable behavioral change by doing these two things:
- You can’t educate them into it
- You can’t trick them into it.
What will impact consumer behavior is a “wake them up” message or signal that stuns them into realizing that their unsustainable behavior is actually weird or not normal. Nothing gets a consumer’s attention more than a truly breakthrough price! It is solar’s breakthrough pricing that has been the “wake them up” motivation for California homeowners and businesses to go solar.
Driven by solar’s lower prices the marketing of solar in California is now definitely getting weird. TV advertisements by many California solar companies look and sound like a Tea Party convention with speakers rallying a crowd of people to gain financial freedom from high utility rates. Solar companies are also using peer marketing strategies. One solar company’s TV ads shows neighborhood kids playing at the solar powered home because the air conditioning is running on a hot day. The latent marketing message is the pride gained by the solar powered mom that her children are now more popular. Get ready America! When solar prices in your state drops below your electric utility’s retail prices you will be getting this “weird” solar marketing too.
A cost less, mean more sustainable economy
Since 2007 my research has pointed to a green economic revolution where economic growth will be driven by products that costs less plus mean more in terms of human and environmental health. Rooftop solar’s ability to deliver both lower prices plus zero onsite emissions is just one example of this emerging sustainable economy. Another example is how healthy food sales are growing at three times the sales rate of conventional foods as consumers increasingly search for “mean more” food solutions and as the price for organic foods narrow the price gap with conventional foods. Sustainable economics is also sweeping through Corporate America as companies from Apple to Walmart adopt sustainable best practices (including installation of solar power) as a core business path for reducing costs and winning millennial generation customers.
Sustainable economy is driving job growth
This sustainable economy has the potential of generating local jobs without stimulation from the Federal Reserve’s unsustainable monetary policies of almost zero interest rates. Today their are approximately 175,000 solar jobs in America. These jobs are spread across the U.S. pumping more than $15 billion annually into the American economy.
The solar industry is adding jobs at a time of massive fossil fuel industry layoffs. The solar industry now employees almost twice as many employees as the coal mining industry. Since 2014 the solar industry has added twice as many jobs than the oil and natural gas pipeline industry.
Importantly, solar jobs are local jobs. A worker can get a job working in the solar industry near where they live rather than having to uproot their life to work in the Bakken oil fields of North Dakota or a deep-sea oil platform in the Gulf of Mexico.
Weird is the path to sustainable economic growth
The bottom line for America’s economy is that sustainability has grown into a global multi-trillion dollar annual business opportunity. Sustainability is a growth industry that holds the potential of restoring American jobs, the economy and the environment. As demonstrated by the solar industry, a sustainable economy will deliver lower consumer prices, fewer emissions and increased numbers of local jobs. The American path to sustained economic growth is to get weird like the growing numbers of homeowners going solar.
About the author
Bill Roth. First Green Business Coach for Entrepreneur.com. Founder of Earth 2017, a website that posts proven best practices for making money going green. President of NCCT, a consulting company that coaches CEOs and business owners on pricing and marketing best practices proven to win the millennial generation, and their moms, as customers. Follow Bill on Twitter.