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A Market Assessment of Residential Grid-Tied PV Systems in Colorado

A Market Assessment of Residential Grid-Tied PV Systems in Colorado. NREL Technical Report, Sept. 2000 by Barbara C. Farhar, Ph.D. Timothy C. Coburn, Ph.D. Summarized by Pamela Quigley. Study Objective.

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A Market Assessment of Residential Grid-Tied PV Systems in Colorado

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  1. A Market Assessment of Residential Grid-Tied PV Systems in Colorado NREL Technical Report, Sept. 2000 by Barbara C. Farhar, Ph.D. Timothy C. Coburn, Ph.D. Summarized by Pamela Quigley

  2. Study Objective • To develop estimates of the size of the Grid-Tied Photovoltaic (GPV) market among Colorado homeowners • Identify • PV benefits • Barriers to adoption • Information needs & sources • Desired PV attributes • Market Segmentation & Size

  3. Research Approach • Use knowledge gained in prior qualitative study • 120? open ended face-to-face interviews with self-nominated parties conducted between 199x – 199x • Purpose to identify 50 homeowners willing to pay $8,000-12,000 for 2- or 3-kW GPV systems ($4/watt by homeowner) • Subsidized by federal grant • Results published “Public Response to Residential Grid-Tied PV Systems in Colorado: A Qualitative Market Assessment” – Farhar & Buhrmann, 1998

  4. Research Approach • Mailed 6,088 surveys to single-family Colorado homeowners in 1998* • 3001 responses; response rate 60% • Assumed most homeowners knew little about GPV systems • GPV not available in CO at time of survey • Designed to permit categorization of respondents into stages of adoption process *Near as I can tell

  5. Research Approach Characteristics of Innovation Adopters • Innovators: control substantial resources, technically knowledgable, tolerate uncertainty • Early adopters: well integrated in communities, people to whom others look for advice • Early majority: more deliberate • Late majority: skeptical to new ideas, cautious, finally adopts b/c not to would leave in relatively worse position • Laggards: limited resources, less integrated socially

  6. Near Term Market 1. Knowledge 2. Persuasion 3. Decision 5. Confirmation 4. Implementation Exceptional Coloradoans Stages of Innovation Adoption • Heard of innovation, usually through professional or business exposure • Awareness & exposure to more info; will form position towards innovation • Behavioral intention to use innovation or not • If favorable, purchases innovation • Lives w/ + or – consequences; may reject

  7. Dependent Variables • Favorability to GPV • System size / price tradeoffs • Willingness to pay for GPV • Behavioral intention

  8. Independent Variables • Perceived relative advantage of PV • Rated importance of 23 perceived benefits • Perceived fuel source in CO • Perceived feasibility of GPV • Rated importance of 21 product attributes • Preferred payment methods • Preferred source of GPV • Knowledge • Familiarity of GPV; Knowledge to make decision

  9. Independent Variables • Information • Importance of 15 information needs • Importance of 24 information sources • Policy Preferences • Subsidy preference & how to pay • Compatible lifestyle & values • Environmental values • Early adopter characteristics • Also collected demographics

  10. Not important likely or familiar Very important likely or familiar 1 2 3 4 5 6 7 8 9 10 Question Structure • Mean • Strong preference: 8,9,10% • Preference: 7,8,9,10% • Must have: 11

  11. 68% Familiarity & Favorability • How familiar are you with GPV? • Mean: 3.2 • How favorable are you to these systems being available to CO residents? • Mean: 7.5 • Very favorable (9,10): 44% • Favorable (7,8): 24% • Neutral (5,6): 21% • Not familiar, but favorable

  12. XCEL: 98% Coal Fort Collins: 50% hydro Knowledge & Behavior • Do you know enough about GPV to make informed buying decision? • Mean: 3.3 • 8,9,10%: 10% • What is primary fuel for electricity in CO? • Coal: 52% (48% wrong!) • Natural gas: 27% • Hydro: 12% • Oil: 6%

  13. Perceived Benefits – Tier 1 • Financial & long-term top the list w/ mean ratings of 8.0 or more • Focus of marketing efforts F: Financial; L/L: Long term local; L/G: Long term global; S: Self sufficiency; A: Altruism

  14. Perceived Benefits – Tier 2 • Next, but still very important is energy self sufficiency; financial & long term show up too. • Means of 7.5 – 7.8 F: Financial; L/L: Long term local; L/G: Long term global; S: Self sufficiency; A: Altruism

  15. Perceived Benefits –Tiers 3 & 4 • Concern for Colorado • Altruism not as important

  16. Perceived Barriers • Of the 18 barriers investigated, 17 have mean scores 7.7 or higher • People don’t know much about PV; all are important to address • Only 1 ranked as unimportant: • “What friends & neighbors might say” with mean score of 3.7

  17. Perceived Barriers – Tier 1 • Operability, reputation and financial top the list of barriers • Mean scores of 8.8 and higher F: Financial; O: Operability; R: Business Reputation; H: Home; S: Safety; T:Technology

  18. Perceived Barriers – Tier 2 • Impact on home: resale value, insurance, safety, required space F: Financial; O: Operability; R: Business Reputation; H: Home; S: Safety; T:Technology

  19. Information Needs • All 15 information needs investigated ranked as important with mean scores 7.0 and higher • Again, indicates that people are unfamiliar

  20. Information Needs – Tier 1 • Must know before purchasing decision • Mean scores of 9.0 • Not surprisingly, all financial issues F: Financial; O: Operability; G: General; E: Environmental

  21. Information Needs – Tier 2 • Strong purchasing elements • Mean scores 8.3 – 8.7 F: Financial; O: Operability; G: General; E: Environmental

  22. Information Needs – Tier 3 • Technical & environmental • Mean scores of 7.0 – 7.9 F: Financial; O: Operability; G: General; E: Environmental

  23. Information Sources • No single “go to” source • Highest mean score of 6.9 indicates people are either: • Unsure who has reliable info • Not likely to be seeking more info • People want to see it themselves • Utility ranked 2nd! • Government agencies ranked low

  24. Information Sources K: Know personally; B: Business; I: Institution; G: Government

  25. Information Channels • Show me!

  26. Preferred System Features • Investigated 21 features • Identified some ‘must haves’

  27. System Features – Must Haves • A 20-year system life with warranty • Rebates needed to stimulate market • Independence from grid • Quantify electricity generated F: Financial; R: Reliability; S: Self sufficiency; P: Performance; A: Aesthetics

  28. System Features – Tier 1 • Aesthetics & reliability important • Want service agreements F: Financial; R: Reliability; S: Self sufficiency; P: Performance; A: Aesthetics

  29. System Features – Tier 2 & 3 • Mostly financial aspects: • Not as important: F: Financial; R: Reliability; S: Self sufficiency; P: Performance; A: Aesthetics

  30. PV System Sources • 25% indicated they’d ‘very likely’ buy PV from their utility • Indicates that they trust utility

  31. Appearance / Performance Tradeoffs • Fair amount of education needed • Aesthetics are important

  32. Size / Price Tradeoffs • At time of survey, average monthly electric bill is $45 (600 kWh) • Should not interpret as intent to buy

  33. PAQ update: PVWatts used to estimate electricity generated Purchasing Preferences

  34. Financing Preferences

  35. Changes in Favorability • Those initially favorable: 77% remain favorable, 22% become less favorable • Those initially neutral: 29% become more favorable, 20% become more unfavorable • Those initially unfavorable: 57% become more favorable, 44% remain unfavorable

  36. Market Segmentation Analysis • Sensitivity analysis used to identify variables that can be used to measure immediacy of GPV purchase decision thereby estimating the size of near term market – those in the decision making stage

  37. Criterion Cluster Analysis Results • Four Criterion variables • Willingness to look for more GPV information • Willingness to pay for No-added-cost GPV • Preference for system to provide 100% electricity needs • Favorability towards using GPV on own home

  38. Seven Predictor variables Warranty reassurance: feature Self-reliant ownership: feature Environmental benefit: benefit Personal financial benefit: benefit Pacesetter benefit: benefit Neighborhood concern: barrier System failure: barrier Predictor Criterion

  39. Predictor Cluster Analysis Results

  40. Pacesetters & Steady Positives most likely to consider near term purchase Respond to marketing campaigns emphasizing pacesetting, environmental & financial aspects of GPV Tier 4 Tier 1 Tier 2 Tier 3 Crosstabulation

  41. Composition of Market • Tier 1: Early Adopters, 38% • Higher % of skilled workers • Lowest % of college grads • Higher % of Western Slope residents • Low % of political conservatives • Tier 2: Mid-term Adopters, 47% • Mostly affluent • Highly educated • Highest job positioned • High % of Denver/Boulder residents

  42. Composition of Market • Tier 3: Late adopters, 8% • Higher % of women & younger • Highest % of skilled workers • High % of politically conservative • Tier 4: Non-adopters, 7% • High % retirees • High % political conservatives • High % Denver/Boulder residents

  43. Market Size / Cost Tradeoffs Financing provided by utility at 7% interest, amortized over 20 year period

  44. With A-373.6 kW at $18,000 net 1,300 – 1,800 units 4.7 – 6.5 MW

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