Apricot Solar Market
Summary
TLDRThe script discusses the adoption rates of technology-based products versus non-technology based ones, highlighting how faster adoption occurs with tech products like VCRs compared to non-tech like washing machines. It then delves into the basics of solar energy, explaining how sunlight is converted into usable energy for homes. The speaker emphasizes the importance of understanding utilities, pointing out the difference between public and private utilities and the significance of state regulations in solar adoption. The script also touches on customer motivations for choosing solar, primarily savings, and how sales reps can effectively communicate these benefits, especially in areas with strong sunlight and favorable incentives. Lastly, it outlines various options customers have for going solar, such as purchase, lease, and Power Purchase Agreements (PPAs), and the importance of matching these options to the customer's financial situation and goals.
Takeaways
- 📈 The adoption rate of technology-based products is faster than non-technology based products due to quicker word-of-mouth and a 'hockey stick' growth curve.
- 📅 It took around 80 years for the cloth washer to achieve the same adoption rate as the VCR, which took less than 20 years, illustrating the difference in adoption speed.
- 💡 Solar energy works by converting sunlight into electricity through solar panels, inverters, and then into usable energy for homes, with the option of battery storage.
- 🏠 The customer's understanding of how solar energy powers their home appliances is crucial for the adoption of solar technology.
- 📊 Utilities are state-regulated, not federally, with California's SB 100 bill serving as an example of state-level leadership in renewable energy adoption.
- 💼 The primary motivation for customers to choose solar is financial savings, which can be significant depending on the state's solar incentives and sunlight availability.
- 🔍 Customers often cannot read their utility bills, which makes it difficult for them to understand potential savings from solar energy.
- 📈 The rate at which utilities charge for electricity can increase significantly over time, as exemplified by PG&E's proposed 44% rate hike from 2022 to 2026.
- 💼 Sales reps who understand utilities can effectively communicate the long-term savings of solar energy to customers, helping them make informed decisions.
- 🏢 Different solar options such as purchase, lease, and Power Purchase Agreements (PPAs) are available, catering to various customer financial situations and goals.
- 📝 A PPA is an agreement where the solar company invests in the equipment and installation, sharing savings with the customer, and is a viable option for those unable to purchase solar panels outright.
Q & A
What is the significance of the adoption rate in the context of the solar market?
-The adoption rate is crucial as it indicates how quickly a product or technology is embraced by the public. In the solar market, understanding the adoption rate helps in strategizing marketing efforts towards different segments of the market, such as early adopters versus laggards.
How does the adoption rate of technology-based products compare to non-technology based products?
-Technology-based products generally have a faster adoption rate compared to non-technology based products. This is due to factors like the rapid spread of word of mouth and the inherent usefulness of technology in modern life, as illustrated by the examples of VCRs and washing machines in the script.
What is the role of early adopters and early majority in the adoption of new technologies?
-Early adopters and the early majority play a critical role in bridging the information gap about new technologies. They educate themselves or are educated by others, which helps them make informed decisions and contribute to the acceleration of the adoption curve.
Why is it more profitable to sell solar energy systems now rather than in the future?
-Selling solar energy systems now is more profitable because the adoption rate is lower, and there is a greater opportunity for growth. As adoption becomes more widespread, the market may become saturated, reducing the potential for profit.
Can you explain the basic process of how solar energy is converted for home use?
-Solar energy is captured by panels on the roof, which convert the sun's rays into direct current (DC). This DC current is then transformed into alternating current (AC) by an inverter, making it usable for home appliances. Optionally, excess energy can be stored in a battery for later use.
What is the significance of the SB 100 bill in the context of solar energy adoption?
-The SB 100 bill is a California state bill aimed at making the state a global leader in combating climate change. It sets renewable energy targets and is a reference point for other states in the US when considering how to promote and integrate renewable energy, including solar power, into their markets.
Why do customers choose to go solar, and how does this relate to savings?
-Customers choose to go solar primarily for the financial savings. Solar energy can provide significant cost reductions on utility bills, especially in areas with high electricity costs and strong sunlight.
What is the difference between public versus private utilities and how does it affect solar sales?
-Public utilities are state-regulated and often offer better incentives for solar adoption. Private utilities may not provide the same level of support. Solar sales are more effective in areas with strong public utility support and incentives.
Can you explain how the tiered system and time of use (TOU) pricing work in utilities?
-The tiered system charges customers at increasing rates as their energy usage exceeds certain thresholds. Time of use pricing charges customers based on the time when they consume electricity, with higher rates during peak hours. Understanding these systems can help solar sales representatives demonstrate potential savings to customers.
What is a Power Purchase Agreement (PPA) and how does it benefit both the customer and the solar company?
-A PPA is an agreement where the solar company invests in and installs the solar panels on a customer's roof. The customer benefits by receiving a discount on their utility bill, while the company earns revenue over the 25-year lifespan of the agreement, taking 8 to 12 years to break even.
Why is it said that customers who go solar are unlikely to revert back to traditional utilities?
-Once customers go solar, they experience the financial benefits and environmental advantages, making it unlikely for them to revert to traditional utilities. The satisfaction with solar energy and the increasing costs of traditional utilities make solar a long-term, beneficial choice.
Outlines
📈 Adoption Rates of Technology vs. Non-Technology Products
This paragraph discusses the adoption rates of various products, highlighting the difference between technology-based and non-technology based products. The speaker uses a visual aid to compare the adoption rates, showing that technology products like the VCR, internet, cell phones, and radio have a faster adoption curve, often resembling a 'hockey stick' shape. The VCR, introduced post-1975, reached mass adoption by 1992, whereas the clothes washer, introduced in 1925, took nearly 80 years to achieve the same level of adoption. The faster adoption of technology is attributed to the rapid spread of word of mouth and the perceived usefulness of these products. The speaker also touches on the importance of understanding the adoption rate in marketing strategies, emphasizing the difference between targeting early adopters and laggards.
💡 Solar Energy Adoption and Utility Dynamics
The second paragraph delves into the reasons behind solar energy adoption, focusing on cost savings as the primary motivator. The speaker discusses the importance of targeting states with strong solar incentives and high solar potential, using California's SB 100 bill as an example of state-level renewable energy initiatives. The explanation of how solar energy works for a household is provided, detailing the process from sunlight being captured by panels, converted to direct current (DC), then to alternating current (AC) via an inverter, and finally used in the home. The paragraph also covers the distinction between public and private utilities and the state regulation of utilities, with a specific look at the California Public Utility Commission's (CPUC) role in rate hikes and the impact on solar adoption. The speaker uses the example of PG&E to illustrate how utilities operate, including the shift from tiered pricing to time-of-use (TOU) pricing, and how solar sales representatives can leverage this knowledge to demonstrate potential savings to customers.
🔍 Exploring Solar Energy Options and the PPA Model
In the final paragraph, the speaker explores the different options customers have when considering solar energy, emphasizing that not all companies offer the same options. The paragraph discusses three main options: purchase, lease, and Power Purchase Agreement (PPA). The PPA is highlighted as a particularly effective option for customers who may not be in a financial position to purchase solar panels outright. The PPA model involves the solar company paying for the equipment, installation, and warranty, with both the company and the customer sharing in the savings. The customer receives a discount on their utility bill, while the company earns revenue over the 25-year lifespan of the agreement. The speaker explains that while it takes 8 to 12 years for a company to break even on a PPA, the long-term recurring monthly revenue makes it a valuable option. The paragraph concludes by emphasizing the importance of understanding these options to maximize sales in the solar industry.
Mindmap
Keywords
💡Solar Market Adoption
💡VCR
💡Washing Machine
💡Technology-based Products
💡Early Adopter
💡Lagger
💡Solar Energy
💡Inverter
💡Utility
💡SB 100 Bill
💡Cost Savings
💡PPA (Power Purchase Agreement)
Highlights
Understanding the adoption rate of technology-based products versus non-technology based products is crucial for the solar market.
VCR adoption took until around 1992, while the cloth washer took almost 80 years to achieve the same level of adoption.
Technology-based products have a faster adoption rate due to quicker word-of-mouth spread and a 'hockey stick' growth curve.
Educating early adopters and early majority is key to bridging the information gap and facilitating transactions.
Selling solar panels now can be more profitable than in the future due to the current low adoption rate.
Solar energy conversion involves sunlight energy, solar panels, direct current (DC), inverters, and alternating current (AC) for home use.
Battery backup systems store excess solar energy for later use when the home is not generating power.
Utilities are state-regulated with different structures for public versus private utilities.
California's SB 100 bill is a significant measure in combating climate change and influences renewable energy strategies across the US.
Solar customers are primarily motivated by long-term savings and the effectiveness of solar incentives.
Utility bills are measured in kilowatt-hours (kWh), which is essential for understanding potential solar savings.
PG&E's rate hikes from 2022 to 2026 illustrate the increasing costs of traditional utilities, making solar a more attractive option.
Tiered pricing and time-of-use (TOU) rates can significantly affect the cost of electricity, impacting the appeal of solar.
Solar sales reps can leverage utility bill analysis to demonstrate potential savings and the value of solar.
Once customers adopt solar, they rarely revert to traditional utilities due to the benefits and cost savings.
Different solar options, such as purchase, lease, and Power Purchase Agreements (PPA), cater to various customer needs and financial situations.
A PPA allows solar companies to invest in equipment and installation, sharing savings with customers through discounted utility bills.
PPAs are beneficial for solar companies as they provide reoccurring monthly revenue over a 25-year period.
Transcripts
[Music]
when thinking about the solar
Market it's important to understand how
adoption takes place what we can see
here on this slide on the two axes one
shows percentage of adoption in 20%
increments the other shows years in
15year increments we have three
different colors black blue and orange
these are very common products that most
people are familiar with what I like to
point out is the adoption rate of
Technology based products versus the
adoption rate of non-technology based
products so if everybody on here can
find where the VCR is it's a dotted
Brown Line on the right hand side the
VCR came out somewhere after 1975 maybe
1978 is and you can see how long it took
for the VCR
to have mass adoption over
80% happened by
1992 maybe even
sooner now if we look at closeth washer
which is right in the center of the
screen it's a brown solid line like a
washing machine the first washing
machine was introduced in
1925 is and to get the same adoption of
the VCR it took four times as long it
took almost 80
years and that's because the
VCR is more useful in a house today than
cloth washer right that's why the
adoption was faster of course not the
reason why is because Technology based
products the adoption rate is always
faster Word of Mouth spreads faster and
you can see that with the internet the
cell phone um and radio like anything
that's Technology based is going to have
a much more sharp like hockey stick
looking curve so if someone wants to
maximize their
opportunity understanding that the
adoption rate is low we understand that
marketing to an early adopter in an
early majority is different than a
lagger why because a
lagger is just dragging their feet they
know it's good everybody else has it
they know the information they just
haven't pulled the trigger an early
adopter an early majority has done some
work or has been educated by someone so
that they can bridge that information
Gap
and make a transaction happen this is
why when people sold cell phones in the
1980s they made a lot more money than
people selling cell phones today selling
solar will will make people a lot more
money today than it will 20 years from
now all right let's jump into solar
101 when I think about understanding how
solar works the customer needs to
understand how the sun's energy enables
them to turn on their micr microwave
oven so the way I would explain it is as
follows the sun casts its Rays its
energy down onto the roof those panels
receive the energy and they take that
energy and they funnel it down to the
house when they're funneling that energy
to the house it's in a form of direct
current which is not usable for a
home so it goes through an inverter and
the in inverter turns it to alternating
current and then that goes into the
power box and it can be used in the home
so sun's energy to to panels DC to
inverter to AC to usable energy and if I
have a battery I would just have another
set of wires going there that would go
to my battery backup in my house I would
use the energy that is is being
collected while I'm not um using power
like I'm a way at work the energy would
be stored in that battery backup and
then when I'm at home and I turn on my
power I'm pulling from the battery back
up before I pull from the
[Music]
grid so to understand the
utilities there's a couple things that
are important one is is that there are
public versus private utilities and the
other is to understand that this is
State regulated at the state level not
the federal
level and so a good starting point is
the SB 100 bill that was California's
play to be the global leader in
combating climate change and so um there
are countries that look at this bill but
you better believe that every state in
the US looks at the S sp00 bill when
thinking about how they're going to
bring this renewable to to the
[Music]
market at the end of the
day the main reason why somebody chooses
to get solar is because of the savings
and so just because apricot has the
ability to sell into 30 different
states doesn't mean that the top reps
are openly spending their resources
equally in all 30 States if I'm a if I'm
selling solar I'm going to go where it's
the easiest to show
savings where the sun is the hottest the
brightest um and also the incentives are
the best so I'm going to go to a public
for-profit utility versus a private
nonprofit free utility and I'm also
going to go into California before I go
to North
Dakota pg& is a great example for for
everybody to understand and learn how
utilities work first of all the metrics
of measurement is kilowatt per hour
otherwise known as
kwh the reason why this is important is
is that most customers cannot even read
their own utility bill and so how could
they know if they could save money or
not how could they be confident in
making a solar
transaction so PG is a private
for-profit utility and what's happened
is is they have had Less customer base
over the years because people are going
solar they've had fires and they've also
had lawsuits and they're also looking to
do upgrades so instead of this
Executives taking a cut in their bonuses
what they do is they propose rate hikes
and they've been doing this through the
cpuc the California Public Utility
Commission and so from they announced
from 2022 to 2026 there's going to be 44
% rate hike you can see here in quadrant
2 tier 1
2011 was 11 cents a kilowatt now in
quadrant 3 on the bottom left hand side
I can't find anything close to 11 cents
a kilowatt um I'm looking at something
that's 300% higher at least and so
companies utilities typically start off
with a tiered system which is in
quadrant 2 the more I use the more I pay
I'm given a certain amount of power when
I go over that I go to tier two pricing
so and so forth quadrant 3 is what's
called time of use
tou and so toou means that the customer
is going to pay based on the time of use
so if I want to do my
laundry between 4 and 900 p.m. they're
going to clip me for 45 cents a kilowatt
hour if I'm over my Baseline they're
going to get another 8 cents out of
me so this just keeps on going and most
customers look at at their bill because
they can't read it they get frustrated
they bark at it with their significant
other they pay it and they move on they
don't don't think of the option of L I
can't just like not pay my
utility so when a sales rep goes in
they're able to present savings and off
and solutions with utility so in
Quadrant 4 we can see it's pretty
logical the larger the utility bill
typically the more savings that can be
provided if a customer has a $250
utility bill a sales rep can come at
them and say hey
you know from the savings that you're
going to have in solar over the next 25
years that could be enough money to help
pay for your son's education at Santa
Clara
University and I'm going to take
something tangible because most
customers aren't thinking about saving
$60,000 over the next 25 years and sales
reps that understand utilities can help
explain this to a customer and help them
get off the status stat quo and when
someone chooses to go solar they're
never going back so if we look at at the
um on the right hand side point 2 how
many customers after they go solar five
or 10 years down the road are going to
call up their salesperson and say you
know what the
solar really not not liking the savings
money side of things I see the utilities
got these crazy high rates that are
continuously going up I'd like to go
back to doing
that or how many customers go you know
what I've had solar on my roof for 10
years you know what I want to do I want
to have that taken off because I'm about
to move and this way I can sell my house
for cheaper right it's just
counterintuitive and so that education
Gap is powerful but it's also a land
grab which we'll talk about here
shortly when thinking about the ways
customers can go solar I think about it
like this more options equals more sales
and not every company has every
option
so with regards to a purchase I'm going
to go backwards here number three we
have three different companies we work
with depending on the customer's
financial situation and their goals a
purchase might be the best option maybe
it's not maybe a lease is a more
suitable option or maybe neither of
those options work and a PPA is the most
effective option A PPA stands for a
power of purchase agreement not every
solar provider in fact most solar
companies do not have
this so how does it
work if a
customer has looked at solar multiple
times and hasn't pulled the trigger or
um maybe they're just not in the
financial position to do a
purchase sales reps will lead with the
PPA hey Mrs customer noticed that your
roof doesn't have any panels on it's
kind of naked up there have you ever
thought about going solar oh yeah we
looked at it five times and it just
didn't pencil out no problem what were
the numbers when you ran them on the PPA
just out of
curiosity most customers respond I I
don't even know what you're talking
about and so gives the sales rep the
opportunity to explain the PPA
so Mrs customer the way the PPA works is
if you and your rooftop
qualify the company is willing to go
into business with you and they will
actually pay for the equipment they will
pay for the installation they will pay
for the
warranty and both the company and the
customer get to share in the savings the
customer gets to share by getting a
discount somewhere between 20 and 50% on
their utility bill and the company gets
a little love as as well the reason why
most companies or you may have never
heard of this before is because it does
take the company somewhere between 8 and
12 years to break
even on this job but the reason why
they're willing to do it is because they
have the customers's roof for 25 years
so that's looked at as RMR or
reoccurring monthly revenue and that is
very powerful for us so that's what a
PPA is and those are the
options
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