Solar Energy Is an Unstoppable Trend—If It Can Get These Changes Right
Solar energy is ready to step into the spotlight. With the cost of systems falling and the price of electricity continuing to rise, more and more Americans are deciding to go solar. According to the Solar Energy Industry Association (SEIA), a new solar energy system was installed every 2.5 minutes in the U.S. in 2014.
Yet, in order to embrace solar and renewable distributed energy, we have to rethink assumptions we’ve been making about our energy for the last century. That may mean a new job description for utilities, and a new approach to how people buy solar energy systems.
Over the last decade, distributed renewable energy has expanded exponentially. With its easy adoptability and promise of predictable long-term energy costs, solar has led this explosion. This is a result of the potent combination of the falling price of solar and the ever-increasing cost of electricity. According to SEIA, residential solar costs have dropped by 45 percent since 2010. Analyses by Deutsche Bank predict the cost of solar modules will fall another 40 percent by 2017. In contrast, data from the U.S. Energy Information Administration shows that electricity prices across the U.S. have risen between 2 percent and 5 percent annually since 2010.
And even as prices drop, improvements in technology are also allowing panels to become more efficient every day, so they can compete directly with fossil fuels. Solar is ready to take over the mantle of America’s energy source from fossil fuels. This is an unstoppable trend.
We Don’t Really Understand How Expensive Our Energy Is
The hidden health and environmental costs of our reliance on fossil fuels is gargantuan. A recent report from the International Monetary Fund estimates that if we were paying the true cost of using fossil fuels we would have to add $5 trillion to our energy bill. Solar energy, on the other hand, is clean and non-polluting. Sunshine is readily available (for at least most of the day), and it does not require delicate diplomacy or military action to ensure continued access to it.
Utilities Must Prepare for a Different Future
Of course, the transition to solar will have some bumps. In a world of distributed energy production, the role and business model of utility companies may have to evolve. Utilities have to prepare for a future in which their main job may be taking care of the grid, while customers themselves produce the energy. How utilities are paid, what they are paid for and their basic relationship to their customers may all have to change as well.
Solar Also Needs to Evolve
The solar industry itself must also undergo radical change. The solar industry uses outdated methods to sell solar energy systems to customers. Insistent salespeople, local door-to-door campaigns and opaque information have been the order of the day. There is very little open, transparent information about solar for consumers. The Rocky Mountain Institute estimates that these marketing strategies and other soft costs associated with selling solar account for more than 50 percent of total installed residential costs.
As solar becomes a mass-market product, consumers are demanding transparency, simplicity and clarity in the information presented to them about going solar. They are demanding to be given the full information in order to make the decision for themselves. They are demanding to shop for solar the way they shop for everything else in their lives. To meet these demands, the industry will need to rethink the way solar reaches customers in the first place.
That’s why I founded EnergySage. We take all the information you need about going solar, put it in one place, and explain it clearly and thoroughly. EnergySage provides an online marketplace where shoppers can upload details about their homes and multiple pre-screened solar installers can submit quotes directly to them. We then take all the information and standardize it, letting customers compare solar quotes in an “apples-to-apples” format. We find that when customers have all the information, they feel comfortable making the investment in solar. Shoppers who use EnergySage adopt solar at a rate two to three times higher than those who tried to put all the information together themselves. People want to go solar, but they need to feel they can trust the information being provided to them. EnergySage provides that sense of security by simply empowering the customer with information. The ideas here are not new, they are simply the best way to sell things. Applying them to the solar industry will help solar become ubiquitous.
The way Americans get their energy is changing rapidly and solar is leading that change. But, if we’re going to be able to fulfill our role in the new energy economy, we in the solar industry have to become a more open and transparent industry.