Apricot Solar Market

Summary

The 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

00:00

📈 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.

05:02

💡 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.

10:02

🔍 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.

Keywords

💡Solar Market Adoption

Solar market adoption refers to the process by which solar energy products and services become widely accepted and used by consumers. In the video, this concept is illustrated through a slide showing the adoption rates of various products over time, emphasizing the faster adoption rate of technology-based products like solar panels compared to non-technology-based products such as washing machines.

💡VCR

VCR, or Video Cassette Recorder, is used in the script as an example of a technology-based product that was adopted relatively quickly. The VCR is mentioned to highlight the difference in adoption rates between tech and non-tech products, showing that it took much less time for VCRs to reach mass adoption compared to washing machines.

💡Washing Machine

The washing machine serves as an example of a non-technology-based product in the script. It is used to contrast the slower adoption rate of non-tech products with that of technology-based products, pointing out that it took almost 80 years for washing machines to achieve the same level of adoption that VCRs did in a much shorter time.

💡Technology-based Products

Technology-based products are items that incorporate advanced technological features. The script discusses how these products typically have a faster adoption rate due to factors such as the rapid spread of word-of-mouth and the inherent usefulness of the technology, as exemplified by the VCR and solar panels.

💡Early Adopter

An early adopter is a consumer who is among the first to purchase and use innovative products. In the context of the video, understanding the marketing strategies for early adopters is crucial because they are more likely to try new technology like solar panels, which can help drive further adoption.

💡Lagger

A lagger, as mentioned in the script, refers to a consumer who is slow to adopt new products or technologies. The video explains that marketing to laggards is different from marketing to early adopters because laggards may need more convincing or incentives to make a purchase.

💡Solar Energy

Solar energy is the main theme of the video, focusing on how it is harnessed and used in homes and businesses. The script explains the process of converting sunlight into usable electricity through solar panels, inverters, and batteries, emphasizing the benefits of solar energy in terms of cost savings and environmental impact.

💡Inverter

An inverter is a device that converts direct current (DC) from solar panels into alternating current (AC), which is the form of electricity used in homes. The script uses the inverter as a key component in the explanation of how solar energy is made usable for household appliances.

💡Utility

Utility refers to the service that provides electricity to consumers. The video discusses the importance of understanding utilities, as they are the traditional source of energy that solar power competes with. It also touches on the concept of public versus private utilities and how they are regulated at the state level.

💡SB 100 Bill

The SB 100 Bill is a California legislation aimed at promoting renewable energy and reducing greenhouse gas emissions. The script mentions it as an example of state-level regulation that influences the adoption of solar energy and serves as a model for other states considering similar measures.

💡Cost Savings

Cost savings is a primary motivation for consumers to switch to solar energy, as highlighted in the script. The video discusses how solar energy can lead to significant financial savings over time, which is a key selling point for solar sales representatives.

💡PPA (Power Purchase Agreement)

A Power Purchase Agreement (PPA) is a financial arrangement where a third party develops, owns, and maintains the solar system while the customer agrees to purchase the generated electricity at a fixed rate. The script explains PPAs as an option for customers who may not be able to afford an outright purchase of a solar system.

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