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The sun shines on solar

Consciousness, efficiency and the surge in the solar economy

Decreasing energy production costs, increased public environmental responsibility and changing government policies are prompting more and more consumers to consider renewable energy sources. Solar energy, in particular, is gaining traction around the world. A new IBM Institute for Business value survey of more than 41,000 consumers reveals that, for energy and utility companies, increasing public affinity for solar power will potentially undermine established business models. How utilities respond to this changing environment will go a long way toward determining their future roles and extent of their success. Will they continue to focus mainly on power generation and delivery, or will they become orchestrators for a broader, richer, more highly coordinated power distribution ecosystem?

Renewable energy sources – particularly residential solar – are rapidly changing the energy marketplace. Numerous factors, led by environmental consciousness and reduced energy production costs, are contributing to the enthusiastic attention consumers are now placing on solar energy solutions.

Populations around the globe understand the need to sustainably manage the planet’s limited resources and fragile environment. In fact, protecting the environment tops public concerns in many nations. In the United Kingdom, for example, 84 percent of the population supports the use of solar energy to improve the environment. Research reveals, that an average solar power system can, over the course of years, save the amount of fossil fuel needed to drive around the world over 15 times.3 To encourage solar power adoption and protect the environment, many governments have established incentives for consumers to install solar energy capabilities.

The benefits of solar energy are considerable. However, they come at a price for power companies – potentially a heavy one. As solar costs have rapidly declined, households are becoming not only consumers of power, but producers as well, making them “competitors” of a sort. These producer/consumers, or “prosumers” are becoming increasingly common and influential. How utilities interact with them – or, even, how they are allowed by regulators to interact with them – will be a significant factor in the roles utilities will play in the future. At the very least, a paradigm shift will be necessary as utilities must contemplate a role that focuses on more than just traditional power generation and delivery.

To get a view of how consumers view residential solar power, the IBM Institute for Business Value surveyed more than 41,000 people in six countries (the United States, United Kingdom, Germany, Italy, Spain and Japan) that have substantial solar markets. The purpose of this study is to understand consumer drivers and biases related to solar energy. Based on analysis of responses, we discuss the implications for energy and utility companies from the changing market dynamics and provide a set of recommendations and next steps.


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Meet the authors

Jeffrey Davis

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, IBM Institute for Business Value,


Stephen Callahan

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, Vice President, Global Strategy,


James Strapp

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, Global Industry Leader for Energy & Utilities,

Originally published 01 February 2017