From pv magazine USA
Demand for US residential solar is heating up, as energy prices climb and Americans look for ways to save on bills. Power outages and the desire for backup energy storage have been pushing solar adoption as well. Technavio expects the market for US solar to grow by a 10% compound annual growth rate through 2025, reaching $5.99 billion in incremental growth by the end of that year.
However, the US market faces a problem with soft costs – a barrier that other major national markets have largely overcome. Soft costs represent any costs not tied directly to the hardware itself. In the United States, soft costs represent 65% of a project, according to the Department of Energy.
Shawn Rumery, senior director of research at the Solar Energy Industries Association (SEIA), said that residential system costs have come down 25% since 2014, but soft costs have dropped by just 15%. Customer acquisition and overhead costs have risen 31% over the same time period, said Rumery.
Customer acquisition is difficult in the United States as residential solar crosses “the chasm” in the tech adoption curve. As a technology is adopted, expectations and customer profiles shift. Early innovators and early adopters – the first 15% or so to adopt a new technology – are highly motivated to adopt solar.
As you cross from the early innovators to the middle 30% of adopters, you encounter the early majority. This is the customer base that is motivated by pragmatic reasons, like wanting to save money on electric bills and having backup power during outages.
Crossing the chasm is considered the most critical moment in the adoption process. For solar to cross the chasm, it must meet the expectations and needs of pragmatists.
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