The first of the tri-monthly degression cuts to the feed-in tariff (FiT) is almost upon us. From Wednesday, all <4kW systems installed will receive 16p/kWh – a 63 percent drop in subsidy level since December 2011. Under the new framework, FiT rates will continue to tumble at regular intervals. To the casual observer, solar is getting less and less attractive.
But, this is pointedly not true.
Solar is getting cheaper and as a result more affordable; changes to the tariff reflect this.
The UK solar industry is driven by (and has been successful with) advertising its product based on the financial returns. Nothing speaks louder to consumers than cold hard facts i.e. installing a solar PV system is a fantastic investment.
Potential customers have been bombarded with estimated annual FiT incomes, electricity bill savings predictions and sky-high return on investment promises. All advertising copy from the industry is bound to include the financial details; after all it is arguably the largest motivator to purchase.
Since the tri-monthly degression model was announced though, industry is having trouble trying to end the cursed boom and bust cycle the industry has operated under.
Installations peak before a FiT deadline and dip directly afterwards. This is the inherent nature of selling systems as solely financial investments; consumers will act rationally to secure the highest level of subsidy available.
So, is the boom and bust cycle a necessary bi-product of the solar trade or is there another way?
Rational vs. Emotional
Almost all advertising can be crudely divided into either rational or emotional. Rational advertising seeks to convey the factual benefits of a product – think of a PC World advert listing the specifications of a new computer: 4GB RAM, 500GB hard drive, Intel Core processor etc.
The solar industry turns almost exclusively to rational advertising: save hundreds of pounds on your energy bill plus tax-free returns of 19 percent etc.
Emotional advertising has long been the stalwart of the advertising industry and I think it’s about time the UK solar industry started to articulate the emotional benefits of such a wonderful product.
Now think of the larger, more successful industries. In the PC market it’s hard to look past Apple for its incredible success and for its ability to ‘think different’. Apple doesn’t advertise its products based on specifications, it elicits an emotional response. Instead of marketing a new front-facing camera as a new feature, Apple shows a grandparent calling his granddaughter or a long-distance couple finally being able to see each other for a face-to-face conversation.
“Consumers buy on emotion and justify the purchase with rational reasons.”
Almost all studies which looked at behaviour change after solar installation show that a solar array can have a profound effect on the way someone relates to, consumes, conserves and, ultimately, thinks about energy. Not many industries can claim to be selling such an emotionally-engaging product.
Solar companies need to start building on this by developing emotional connections to their products, tied to the well-trodden rational benefits of installing solar.
For example, the nature of the feed-in tariff means that the industry is selling long-term investments, covering 20 years. Some people find such a large timescale and commitment off-putting and so are dissuaded from buying a system.
What about a young couple who have just had their first baby? Not only is a solar array going to protect the family from rising energy bills in the future, it is also helping to protect the environment for 20 years – their child’s future.
Or imagine you get posted an unexpectedly high energy bill, across the road your neighbour gets the same bill too, but your neighbour has solar fitted and he also received his quarterly FiT income statement. Smiling he files away the letters.
Imagine visually showing the production of electricity – a grubby, loud mechanical process, which pumps carbon into the atmosphere and requires the electricity to be transported miles to your property. Contrast that with a serene ray of sunshine making its way down to a roof-mounted module, silently feeding electricity directly into a house.
The ability to elicit an emotional response to solar should not be solely narrowed down to media advertising either. All aspects of a potential customer’s interaction with the company should be considered, right down to the hold music.
Industry must adapt to the new degression model and find a way to engage with consumers that is not directly focused on feed-in tariff levels, otherwise the boom and bust cycle will continue to dominate the market.
All things considered, solar should be easier to sell now that it is cheaper to install. The reason it isn’t easier to sell is because industry is overly focused on the feed-in tariff, it’s time for a change.