Ashish Anand, a Chandigarh-based businessman reached out to us four months back. With an independent house in the city, he was keen to explore the idea of a solar rooftop for his house. As always, we put him in touch with relevant state sources, and for good measure, a couple of vendors who install solar rooftops too.
Two weeks ago, we decided to check with Ashish on his experience. The response was a revelation. Ashish had postponed his decision, not because of the Covid-19 outbreak, but because of the process. What stuck out was his observation that he just didn’t feel comfortable about the process, the refusal to be pinned down to specific promises, and limited choice available when it came to equipment. His line, ‘ it’s just too much of take it or leave it for me to be comfortable with’ stuck with us.
It is no secret that solar rooftop in India has lagged massively vis a vis the target of 40GW by 2022. Depending on source, total installations are in the range of 4.5 to 5 GW today, way below where they should be to get to 40 GW. But the problems seem to go well beyond the well reported issues of discom apathy, extended paperwork, lack of enough financing options, quality of vendors in some states and the rest.
Perhaps, it was always staring us in the face, but in a struggling category, didn’t get the attention it deserved. Marketing has clearly been a let down for residential rooftop solar.Virtually every element of marketing, from communication of benefits , to brand building, to building trust and loyalty, has been largely ignored so far in the residential rooftop segment.
Reflecting its role as a service ingrained as a utility rooftop solar has fallen into the trap of commoditisation. Thousands of sellers, selling only after protracted negotiations, with a limited offering of options.
Sreekant Khandekar , Founder Director at afaqs!, the leader in Advertising and Marketing Insights has this to say.
“Installing a solar rooftop system is not only a matter of expense but also one of perceived nuisance. So, the last thing a house-owner would want is to deal with an unknown commodity supplier.
Consumer-facing categories involving cost and inconvenience are more likely to grow if the seller is a well-known brand whom the buyer trusts. Also, a buyer would be more comfortable if he knew someone would look after the panels in future if the need arises. The fact that panels are installed in an inaccessible place is another reason for wanting long-term support. Basically, he will want a number where he can call if he has an issue.”
Anirban Chaudhuri, an advertising industry veteran teaching at the Great Lakes institute of management, concurs. “Currently In my view, this is a case for relooking at the way the category is currently marketed. SRT (solar rooftop) promises to deliver tangible benefits for the residential owners in terms of savings in electricity bills and scope for additional earning through net metering. But even for an aware rooftop owner, the entire installation is managed by predominantly unorganized contractors. There could be larger contractors but their approach to selling SRT is no different than selling commodities. The consumer too does not have much understanding of evaluating the offerings beyond the promise of service available locally.”
Textbook elements of a good marketing plan, that is the seven P’s, of product, price, promotion, place, packaging, positioning and people are missing or inadequately represented in most marketing efforts for rooftop solar today. We look at why that is, what is being done about it, and finally, what should be done . Let’s start with the big one in India, price.
The Price Conundrum. To Tell Or Not Upfront?
If you have spent time going through the websites of most solar rooftop operators who have actually got a web presence of some sorts, you will struggle to find this all important element on their site. While Tata Solar will happily inform you about savings of “Rs 50,000 per annum”, but how that figure was arrived at will remain a mystery. And the same story is repeated across the spectrum, all over the country. A refusal to share actual price per KW. In each case, you need to prepare for a full selling pitch to get the price.
Speaking to multiple vendors got us a variety of answers, from the need to assess sites first, to variations depending on the kind of equipment used, and finally of course, the assertion that as a high involvement decision, sellers are apprehensive of losing prospects who donot truly understand the price workings of a solar system. The notable exception is of course the installers registered with state agencies to offer and install solar rooftop systems. They are usually happy to share state operating rates, and most will even work at those rates if you insist. Though not without a quite word absolving themselves from any ‘quality issues’, as state discovered prices are based on the lowest bids.
Of course , the pricing issues have their origins in the high government involvement. With state owned discoms the most important players in approving and even ‘buying’ the power generated, the impact of their methods is all too visible. So you have each state declaring its own ‘discovered’ price, something that has lately started diverging at an alarming rate. Rates per KW of solar today vary between Rs 37,000 to Rs 55,000 across states in India. An almost 50 percent difference that can be very difficult to explain to consumer in say, Karnataka. Consumers also ‘discover’ the conditions for state subsidy, like domestic content requirements (DCR), where again, they are typically discouraged from shopping around too much with limited choices available.
Subsidies, the bedrock on which solar movements have grown elsewhere in the world, especially Europe (especially Germany), the US, Australia and even China in the past few years, have failed to deliver in India. February 2019. The phase 2 of the grid connected rooftop solar programme was started in February 2019 with a total central financial support of Rs 11,814 crore through DISCOMs. As of December 2019, an amount of Rs.6.67 crore has been released under this. Still need convincing? Officially, total installed rooftop solar capacity (subsidy driven) in India now stands at 1922 MW, and over Rs 1,874 crore has been released as CFA, Power Minister RK Singh had informed the Parliament in March this year. With most of these disbursals happening since 2012.
Sreekant also believes it is not subsidies, but familiarity and comfort with the brands that will matter. “I am not sure what premium a branded marketer could charge but I have no doubt that if a couple of big names entered the market, it would excite thousands of home buyers to consider solar rooftop panels.”. It’s a condition that has been met , with big names like Tata Power, Adani Green, Amplus (Through its HomeScape Solar offering) moving in. Although one could argue that at a consumer level, only the Tata brand has consumer level recognition.
Existing players also agree somewhat. Small smart installers have gone for a video led strategy, putting out Youtube videos showcasing their work, and generating queries from there. The fact that it works for them, points to a market that exists there.
Ritu Lal, Amplus Solar, also views branding and marketing as an important aspect, especially for residential solar. “A branding and marketing strategy will certainly help in tapping the residential rooftop segment. The market today is completely fragmented and as the SPAAS (SolarPower As a Service, where Amplus usually bears the capital cot of equipment) model is not really viable here, the quality issue becomes even more important for the rooftop owner.
The most common concern that we find among the customers is the ability to trust a partner, especially since homeowners do not understand all details or technicalities of solar.”
The very fact that larger players are lumbering in points to the reality of rooftop solar in India. The requirement for a rooftop or free area in itself defines the market in some ways. With interest rates at record lows, rooftop solar is finally an option that could pass muster purely as an investment option for those with the space. Add to that a far higher level of environmental awareness, and a small but growing segment of users keen to signal it, and you would imagine the marketing could be much more sophisticated than what we see right now.
Even distribution presence is invisible, for this consumer. With barely any ‘display’ stores, consumers have even less to judge the credibility and strength of their suppliers. And this, on a product that is typically sold with an assurance of lasting for 25 years, with actual warranties of 5 to 10 years for rooftop solar too.
Anirban Chaudhruri adds that “If we look at the percentage growth figures over the last few years, in the recent past one will be impressed by the growth of Solar Rooftops (SRT) in India. But then percentages at times look impressive because of the low base. The potential versus actual installation of SRT shows a large gap. And of the SRT growth, a large part of the installation are commercial in nature and not truely consumer led. So to grow the market, one has to invest in brand building Invest in consumer literacy about solar energy and SRT and offer clarity in terms of making the right choice by spelling out the criteria that one should look at while considering a rooftop installation. Also the servicescape keeps differing from vendor to vendor. Entry of established power distribution players makes one hope that the category will gradually get the due marketing investments to move beyond its current commoditised status.”
“The growth of residential SRT can surely be accentuated by a phygital model where the top and middle of the funnel are digitally driven while the bottom of the funnel is delivered through a service oriented physical infrastructure. The younger consumer, globally is becoming more environmentally conscientious and SRT promises the added benefit of a tangible ROI, almost here and now. A structured marketing leveraging on the behaviour change communications learning is the need of the hour for SRT.”
Reaching Solar Customers
When it comes to advertising, clearly the industry players have neither the money, or the inclination, to spend big on advertising. Which is just as well, as digital seems to offer a viable enough solution. Many players today have the beginnings of a digital strategy, going with that mostly for lead generation and conversions. Amol Anand, Co-founder at Loom Solar, a firm focussed on the bottom of the pyramid market for sun 1 KW systems, has had surpsising success with the tactic. “ We generate a majority of our leads through digital, and later, word of mouth”. The firm has a clear ambition to become the ‘Indiamart’ of the category with its own ecom site .
Anirban is also gung ho on digital for solar rooftop selling. “I would certainly go with the importance of leveraging this medium. Irrespective of the motivation behind a consumer’s intent to explore installing SRT, the most likely start of the journey is through an information search. So, if the brand management piece is in order for the players who want to develop this market, optimizing the digital journey of a prospect is going to be highly rewarding. Even today, a simple search query brings up a list of hyperlocal vendors for SRT but as a prospect, one is not aware of most of them. Here is where the brand building part comes to play.
Secondly, the digital medium can play a big role in facilitating information and making it easy for any prospect to consider and later connect with multiple stakeholders in the SRT value chain, including the discom authorities.”
Amplus too has taken care to have a website up and running for HomeScape Solar, with information on the offering, though no pricing.
Firms like REC Group, which has a module offering, even though dealing mostly with large developers, have also become more aware of the possibilities in rooftop solar, and are increasingly pushing to build awareness of their top offerings using the digital medium.
It is not an easy shift though, as the industry has traditionally used print a lot, and at the smallest level of vendors empaneled with state agencies, most will not have a website or a functional one at least.
At the heart of the marketing debate might be the issue of just what a solar rooftop delivers. For the thousands of installers or even EPC firms, residential solar is a usually a product. Especially in case of subsidy powered deals, vendors have been known to walk away for good after the installation is completed and handover happens. The high mortality rate of firms in the business explains the situation perfectly. Sridhar Thiagarajan, a Chennai resident with a house in Bengaluru too, had gone for a solar water heater, way back in 2014. “I went with a known brand player, Tata BP Solar, as that gave me assurance. However, when I faced an issue recently and tried to look them up, I realise the firm is no longer around. That put me off plans for a larger solar system for good” (Tata BP Solar is actually Tata Power Renewables Now). Having said that, Sridhar would still look for a trusted brand firm to consider rooftop solar, as he simply doesn’t trust smaller players. However, Gaurav Mathur, Sales head, SAARC, Trina Solar, cautions against jumping to conclusions about small players. “No, in fact we should appreciate the smaller and first time entrepreneurs, they are reaching to the ground level to educate the consumer on the benefits roof top solar. They are dealing with all discom for the NOC, in some states it is a long process and time consuming
In my opinion, you cannot do away with small system integrators even when you establish a brand, they would in fact will help to increase the reach of the brand” Trina Solar has its own retail rooftop offering, called Trina Home.
Ritu Lal, Senior VP & Head – Institutional Relations at Amplus Solar which has launched a Residential solar division- HomeScape Solar recently, agrees that the customer needs to be understood, and treated better. “Today, customers are aware that they have enough options. Customers don’t just focus on price, but on value for money. They do their research and are willing to pay a premium for brands like HomeScape that they can trust for quality and reliability. Customers also choose HomeScape for the added services that we provide, including data monitoring App, financing aid and net-metering.
HomeScape Solar aims to provide differentiated and aesthetic rooftop solar solutions to homeowners. In addition to saving on energy costs, reducing their carbon footprint and beautifying their homes, customers also benefit from our long-term product warranty, process transparency and end to end project delivery.”
Thus, issues like after sales service, quality of warranty, turnaround time for repairs, will need to assume centrestage to differentiate and get consumer traction.
Amplus itself is counting on reaching really discerning customers, with its premium product ‘Atrium’ . It is an elevated steel reinforced structure with a luxe wooden exterior finish. The price for Atrium, along with the added services starts at Rs. 2 Lacs for every 2 KW but is entirely dependent on the size and customisations that the customers go for. More importantly, it has gone the whole hog with selling exclusivity with the product, with installations by ‘invitation’ on the site.
Trina Solar’s TrinaHome product tries the same approach. Mathur adds, We kept the service in our brand scope, however the brand marketing shall be through our distributors, dealers.
What Can be Done by the Government?
At the very outset, there is a crying need for the government to do the most basic job right. Which is to provide the right information. It can do a lot to clear the fog around the costs, subsidies, suppliers and multiple policies in play across the country. Ideally through a single, quality website where all the information is available, by state.
Plans to create a national single window clearance for rooftop solar applications upto 10KW will also be welcome.
A big issue is solar subsidies. Or the need for them, rather than a simplified and transparent approval system. Players like Loom Solar, who service primarily the sub 1KW market for 1-3 panels with a strong presence in rural areas, have demonstrated that for the customer, the use case is the key. “ We see the spread of smart meters as having a far bigger impact than any subsidy. Prepaid smart meters will do more to make people consider solar in rural areas than any subsidy, adds Anand. He is referring to the risk of power being cut off far quicker once smart meters spread out, instead of the long period between failure to pay bills and actual action now. That will drive adoption in his chosen segment, believes Anand, as people try to ensure their basic power needs are in their control.
Mathur of Trina Solar also believes the model needs to move away from subsidies. “On one side the price of solar PV system going down, on the other side the technology improvement is regularly going on, instead of subsidies, some kind of tax benefits for few years would help many independent middle class households to consider this option seriously.”