Homeowners are valuing high-quality products when investing in solar, writes Vikram Aggarwal
Somesolarinstallers have voiced concerns about a “race to the bottom” since we started inviting them to sell through our Solar Marketplace in 2013. Their reasoning sounds something like this: If consumers have easy access to multiple competing bids with transparent pricing, installers will be forced to undercut their competitors’ prices in order to win more business. To deliver these low prices, installers will then be forced to offer cheap, low-quality equipment in order to close sales, leading to an unwinnable race to the bottom for the solar industry.
Over the five years we’ve been in business, we have actually found the exact opposite occurring: High-quality equipment sells best on EnergySage, and the majority of consumers do not select the lowest-priced offer available to them. The much-anticipated race never got started. For installers, this should be good news: You don’t have to sacrifice quality for price.
SunPower, LG and Panasonic are the most popular brands on EnergySage
In our latest Solar Marketplace Intel Report, we provide complete visibility — for the first time ever — into exactly what type of equipment wins the most customers on EnergySage. The quotes that are most likely to be selected all include high-quality products from reputable manufacturers.
The chart above shows the top 10 panels, by brand and series, most likely to be selected by a consumer on EnergySage in 2017. We’ve also included quality scores from our panel rating system, an objective classification system for assessing solar panel quality we developed with assistance from the National Renewable Energy Laboratory (NREL). These quality scores, along with corresponding prices, are made available to all shoppers using our site.
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uality sells. The top two most popular panels, as well as four of the top five, all have a Premium+ rating — the highest quality score possible on our platform, and a recognition that is only awarded to 5 percent of all panels in our database. This ranking is even more powerful when you take into account that there were hundreds of different solar panel models quoted to consumers on our platform last year.
NREL extensively studied the value of transparency that competitive bidding platforms provide, and it uncovered a similar finding:
“Some installers interviewed for this study stated that overemphasis on low prices may drive installers to compete by offering lower-quality equipment on quote platforms. However, we find that only about one in three quote aggregation customers select the lowest-priced quote and that customers are more likely to select quotes with premium (high-efficiency) panels. The data indicate that at least some customers evaluate offers based on multiple dimensions, including product quality, and that high-quality products can compete on quote aggregation platforms.”
Think of going solar like booking a flight across the U.S.
Consumers will always care about price, but there are plenty of situations where cheapest isn’t best.
Think back to the last time you booked a long-distance flight. You probably used an online comparison-shopping website like Kayak or Expedia to review your travel options, and then narrowed down your choices to a few flights that met your basic criteria. At that point, you’re confronted with a choice: You can take the 5:30 a.m. flight with a two-hour layover, or pay an extra $150 for an 8:00 a.m. direct flight.
Which do you choose? If your only concern is finding the lowest-cost option, you might opt for the early flight with the two-hour layover. But for many shoppers, the later departure time and convenience of a direct flight is well worth a slightly more expensive ticket.
Consumers are approaching solar the same way, particularly for those who want to own their system. The thousands of consumers we interact with on a daily basis are much more motivated by equipment quality and overall value than the lowest price — and we have the data to prove it.
Over the past year, EnergySage took a lesson from leading e-commerce websites and began to attach descriptive “badges” onto quotes from solar installers. They offer an additional layer of information that educate shoppers about the various attributes of one quote versus another.
Not surprisingly, the “Highest Quality Equipment” badge was the most likely to appear on winning quotes in 2017 — 61 percent of all selected offers received it.
After the Highest Quality Equipment badge, the second most likely to appear in winning quotes was “Best Value” — a badge that’s based on the combination of panel quality, inverter quality and price. Only a third of selected quotes included the “Lowest $/W” badge.
This level of transparency is equally beneficial to installers. All companies quoting on EnergySage are given full access to their marketplace performance data. Each installer can see what’s being quoted and selected within their service area in real-time, allowing them to make adjustments and better position themselves to close sales.
What this means for the industry: Consumers will pay for quality
Increased consumer demand for high quality equipment aligns with the broader market shift toward system ownership. As more homeowners consider buying a solar panel system outright, they’re employing similar shopping behaviors to when they’ve made other large purchases. This means that they rely on traditional indicators of product quality, such as valuing the brand’s reputation, evaluating warranty offerings, and using independent review websites.
With today’s residential solar consumers shopping around more than ever, installers shouldn’t be afraid to quote high-quality products. Yes, consumers want to be sure they’re getting a good deal for the right equipment, but in most cases that doesn’t result in them selecting the cheapest option. Consumers are prioritizing long-term value over cost minimization, creating an opportunity for installers to compete without fear over a race to the bottom.
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Vikram Aggarwal is the CEO and founder of EnergySage, a leading online comparison-shopping marketplace for rooftop solar, community solar and solar financing.
Source: greentechmedia
