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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

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
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


Research approach
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


Research approach1
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


Research approach2
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


Stages of innovation adoption

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


Dependent variables
Dependent Variables

  • Favorability to GPV

  • System size / price tradeoffs

  • Willingness to pay for GPV

  • Behavioral intention


Independent variables
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


Independent variables1
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


Question structure

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


Familiarity favorability

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


Knowledge behavior

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%


Perceived benefits tier 1
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


Perceived benefits tier 2
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


Perceived benefits tiers 3 4
Perceived Benefits –Tiers 3 & 4

  • Concern for Colorado

  • Altruism not as important


Perceived barriers
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


Perceived barriers tier 1
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


Perceived barriers tier 2
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


Information needs
Information Needs

  • All 15 information needs investigated ranked as important with mean scores 7.0 and higher

  • Again, indicates that people are unfamiliar


Information needs tier 1
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


Information needs tier 2
Information Needs – Tier 2

  • Strong purchasing elements

  • Mean scores 8.3 – 8.7

F: Financial; O: Operability; G: General; E: Environmental


Information needs tier 3
Information Needs – Tier 3

  • Technical & environmental

  • Mean scores of 7.0 – 7.9

F: Financial; O: Operability; G: General; E: Environmental


Information sources
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


Information sources1
Information Sources

K: Know personally; B: Business; I: Institution; G: Government



Preferred system features
Preferred System Features

  • Investigated 21 features

  • Identified some ‘must haves’


System features must haves
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


System features tier 1
System Features – Tier 1

  • Aesthetics & reliability important

  • Want service agreements

F: Financial; R: Reliability; S: Self sufficiency; P: Performance; A: Aesthetics


System features tier 2 3
System Features – Tier 2 & 3

  • Mostly financial aspects:

  • Not as important:

F: Financial; R: Reliability; S: Self sufficiency; P: Performance; A: Aesthetics


Pv system sources
PV System Sources

  • 25% indicated they’d ‘very likely’ buy PV from their utility

  • Indicates that they trust utility


Appearance performance tradeoffs
Appearance / Performance Tradeoffs

  • Fair amount of education needed

  • Aesthetics are important


Size price tradeoffs
Size / Price Tradeoffs

  • At time of survey, average monthly electric bill is $45 (600 kWh)

  • Should not interpret as intent to buy


Purchasing preferences

PAQ update: PVWatts

used to estimate

electricity generated

Purchasing Preferences



Changes in favorability
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


Market segmentation analysis
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


Criterion cluster analysis results
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


Predictor criterion

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



Crosstabulation

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


Composition of market
Composition of Market term purchase

  • 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


Composition of market1
Composition of Market term purchase

  • 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


Market size cost tradeoffs
Market Size / Cost Tradeoffs term purchase

Financing provided by utility at 7% interest, amortized over 20 year period


With a 37 3 6 kw at 18 000 net
With A-37 term purchase3.6 kW at $18,000 net

1,300 – 1,800 units

4.7 – 6.5 MW


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