The Solar Underground: The Lifecycle of a Trend
By Paula Mints
There are few original ideas for new technologies, products and/or services. Most of what is termed new is a mutation of an idea, which itself is a mutation of an idea all the way back to the original discovery or light bulb moment. Basically, there is not much that is new, or, put another way, that deserves to be called new. For example, every time a company releases a new smart phone design it is releasing an update of an update on top of an update with the original being a marriage between a computer and telephone (these days the quaint landline).
In the solar industry, modules with more cells (72+) are not new, shingles and tiles are not new, smart modules are not new. All are form factor advancements (or not) based on ideas that are decades old and that trace back to the discovery of the photovoltaic effect by physicist Alexander Edmond Becquerel in 1839.
Technologies/products/services rise from the community of ideas all starting somewhere and building on each other. Everything else is marketing.
Even Everett M. Rogers’ Diffusion of Innovations model, on which many a marketing plan is based, has its roots in the research of Iowa State University sociologists Bryce Ryan and Neal Gross who in 1943 studied the adoption of hybrid seed corn by Iowa farmers. Marketing managers everywhere owe a debt of thanks to Dr. Ryan and Dr. Gross and everyone owes a debt of thanks to Adam Smith, who owes a debt of thanks to many others.
The adoption curve offers a base for understanding how individuals within a market may — and only may — behave. The marketplace is a complex arena filled with competing interests and motivations and overrun with noise — announcements, articles that are really marketing instruments and other attempts to grab and influence consumer attention end up confusing the landscape. Think of it as a daycare center with 20 four-year-old children vying for attention and then multiply this by 1,000.
In terms of the solar industry, many people do not own their own roof so cannot be an innovator, early adopter, early or late majority or a laggard until a business model or societal change comes along to allow them to participate. The community solar business model allows people who do not own their own roof and who are early adopters in their hearts to, well, adopt.
New Sells Even When It Is Not New
The solar industry is not really inundated by new ideas and it is overrun with announcements about things that are not particularly new and by hyped trends that are more trope than trend.
Solar is also a highly innovative industry where ideas ebb and flow, and science and engineering articulates, improves, and designs and where the community of ideas thrives.
For example, PERC (passivated emitter rear contact) PV cell technology is not a new idea. PERC was developed two decades ago and is now crawling through its adoption cycle whatever that cycle may be. In terms of PERC, end users and other module buyers are not on its adoption curve — cell and module manufacturers are on the PERC adoption curve and this adoption curve relates more directly to the work of Ryan and Gross at Iowa State University than it does to Rogers’ Diffusion of Innovation model though, they are related. This is because the Diffusion of Innovation model is most relevant to consumers (end users) and the work of Ryan and Gross is most relevant to producers.
Back to Adoption
Consumers of electricity do not fall easily into the Diffusion of Innovation model. This is because solar is a need and consumers (in most cases) rent their electricity from a utility.
Consumers of solar generated electricity also do not fall easily into the Diffusion of Innovation model. Reasons for this are: for the residential model, the end user needs an appropriate roof or adjacent land, needs to own the roof or adjacent land, and there must be no other roadblocks to adoption. For example, a communal roof (condo complexes) is a barrier to adoption.
Affordability is a barrier to adoption. The residential solar lease ameliorated (to an extent) the affordability barrier but did so only if the homeowner qualified for the lease. The residential solar lease is also, in general, more expensive long term than system ownership.
The point is that while a person might want to be an innovator or early adopter of a solar PV system, it may not be possible for them to adopt. That is, someone can be an innovator and an early adopter in his/her heart and at the same time be unable to act on their early-adopter nature.
Into the Fray a Trend Lifecycle Model
Models provide useful guides for entering highly complex markets, and rigid adherence to any model will often prove frustrating. That is … models behave only as well as the inputs to them and users need to be willing to adjust.
Trends — any trend — begin with an idea, either an original idea or a mutation of another idea. Original ideas are, as previously noted, extremely rare, are unique and should be nurtured and treasured if only for all the mutant ideas the original will spawn.
The following is a Trend Lifecycle Model, useful for anyone looking to enter the complex, confounding, thrilling, sometimes agonizing solar industry:
- Idea, original or a mutation of another idea
- Someone, somewhere has a notion and takes the time to think the idea through and develop a commercial concept
- Pioneering the market
- An attempt to find interest (money, sales) is bravely (and this is truly brave) made as the new company ventures into an area that is either completely different or just different enough.
- Social Media climbing
- The idea catches social media interest primarily through smart marketing and often through the unfortunate use of announcements. It is worth noting here that some announcements are just to create awareness and are not really announcing anything.
- Word of mouth frenzy
- Twitter, Instagram, et al catch on and the idea officially begins to trend. This often happens whether or not the idea (now a trend) is actually viable — if nothing else at least some excitement trends
- Copycats enter
- Rapidly or not so rapidly depending on whether the trend is hardware or software and where it is in its development timeline and how easy it is to copy — copycats enter. At this point Twitter, Instagram, all online magazines and conferences are inundated.
- Blanketing the market
- The market noise level is deafening
- At this point much depends on product differentiation and who reaches the market first
- Conferences catch on to the trend and shift content to it
- Market attention deficit
- Too many products/services of the same type are launching announcements also of the same type and hype accelerates
- The market is highly confused and its attention wanders
- Market boredom sets in
- Twitter, Instagram, et all see a decline of interest in the trend
- Revenue potholes
- Price becomes the tipping point and depending on the product, competitors begin undercutting each other
- Margins fall and yet all entrants claim success
- Trend fadeout
- The market yawns and turns elsewhere
- Twitter, Instagram, et al, abandon the trend — more or less, essentially Twitter, Instagram, et al bookmark the trend and will return to it to either announce its return to viability or ask why it was ever a thing at all
- Survival of the best funded or most well-thought out or the future direction or most stubborn or all of the above
- Products/technologies/services that serve a need and/or push progress forward survive as long as the company has the money to do so
Concerning number 10, the solar PV industry is not necessarily the best funded but its funding never seems to completely dry up; it is a long-lived highly technical industry filled with innovations and innovators all building on each other’s work. It is the future direction, and it is filled with extremely stubborn participants. Solar is not a trend and it will survive. (Courtesy of renewableEnergyWorld.com)
Paula Mints Founder/Chief Market Research Analyst