Solar power, once a dream of utopian futurists, is quickly becoming a live possibility for many Americans thanks to dramatic drops in solar panel prices, which fell 60 percent in the past three years. But solar’s share of the U.S. energy supply remains minuscule: as of 2012, it commanded just over one tenth of one percent of the market. Coal, by comparison, claimed 37 percent. What gives?
According to Marc A. Guy, chief executive and co-founder of Boston startup Faze1, the greatest challenge solar companies now face is the high cost of customer acquisition.
“There’s not a lot of transparency in the marketplace,” Guy said. Whereas other merchants can base their sales strategy on a wealth of information about their target market, “solar is a one-time purchase, so you only have one data point.”
Solar is also not for everyone: In order to qualify for adoption, a household must meet a number of criteria that range from weather patterns to the rules of the local power grid to the size and orientation of the roof. Guy says that “in Massachusetts, 75 percent of homes are not suitable for solar, based on them being too shaded or there not being not enough roof space.”
Furthermore, even in places that meet all the physical criteria, solar power can only take root if utility costs are high enough to allow competition.
Faze1’s product, SunVIEW, which launched at the beginning of this month, is a Web-based intelligence platform that helps solar power companies pinpoint their best prospects with a combination of user data, remote sensor data and predictive analytics. It draws on a wide range of information such as local utility rates, owner-occupancy, and credit scores, and presents insights in a Zillow-style, bird’s-eye-view user interface.
The money that solar companies save on customer acquisition may prove a crucial factor in the mounting price war between renewable energy and traditional utilities.
In addition to providing renewable energy, solar power also represents “a very big disruptor to the utility business model,” Guy said. “Now you have energy being produced at the point of use, which is a very different model from what (utilities) are used to.”
And this new model, known as “distributed generation,” has begun to ruffle feathers: The New York Times reported in July that utility companies, especially in the large solar markets of Arizona and California, already see solar energy as “an existential threat to their business,” and have begun to push hard against the tax incentives that the fledgling solar power industry still relies on for economic viability.
“You don’t know you’re a threat until the enemy starts shooting at you,” Guy said.