Friday, February 19, 2010

Is Solar in the Dead Zone?

A simple graph of customer gain (x-axis) vs. customer pain (y-axis) highlights a dangerous place for technology-based products like solar/PV.

This simple four-by-four grid compares value derived from a product, to the pain of acquisition and ownership. The Dead Zone is defined as the area where a product provides value that is good but not great, which can be adopted with discomfort but not excruciating pain. This combination usually convinces the customer to delay purchase because the gain isn't really high enough to justify the amount of pain required.

Technology-based products generally thrive in areas of medium to very high "customer gain" and low-to-medium "customer pain." (see areas shaded in green) And a product or technology is said to be "in the mainstream" when it provides high or very high gain while imposing only modest discomfort.

Sustainable markets exist around the edges of this graph. Very high gains can overcome almost any amount of pain, and in the absence of pain, even modest gains look good. But what happens to an offer (such as solar) that falls in the middle?

A company or an entire industry can escape the dead zone by moving down and/or to the right, away from the center of the graph. And it's interesting that almost universally, the solar industry has decided that increasing gain via lowering cost per watt is the best way to move solar out of the dead zone.

However reducing pain would actually be a faster, long-term solution. In nearly all cases, customer pain is minimized by intangible factors supplied by the vendor rather than tangible or technical attributes of the product itself.

Examples of reducing solar-customer pain might include: selling preconfigured systems/packages through major retailers, eliminating the interconnection application process for small systems, introducing standards for equipment ratings, or making solar-product warrantees transferable.

Focusing on product intangibles would be a much more effective way of lowering pain, reducing the perception of risk and leading solar out of the dead zone.


Related Articles:
Solar Market Leadership

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