CNBC recognizes SJSU solar research

On Monday, CNBC reported on the challenges of solar adoption in a posting entitled “Does the Solar Industry Have a PR Problem?” The jumping-off point for the story by Matt Hunter was a study done by SJSU students from the Sbona Honors Program.

The five marketing honors students — Faith Ebrahimim, Irene Foelschow, Morgan Hancock, Jennifer Sarvian, Tam Tran — completed their study of Silicon Valley (non) adoption in December, and reported their results at a March webinar hosted by SolarTech. This was one of 5 SHP projects sponsored by SolarTech over the past three semesters; I was the faculty advisor or a consulting faculty member for all five.

Here are some excerpts of the CNBC report, which was based on the final project report:

So, what's not to like about solar technology and why hasn't it been adopted by the masses? Is there something wrong with the technology, or does solar just suffer from bad PR?

A recent survey (by solar industry advocate SolarTech and San Jose State University) suggests the latter. A perfect target demographic for solar power — well-off residents of California’s Silicon Valley — have a rather sour perspective on the industry.

According to the survey, only 39 percent of those surveyed saw solar energy as ‘reliable’, and only another 11 percent see it as affordable.

"A lot of advertising dollars are not reaching consumers' ears,” says David McFeely, a director at SolarTech.

Jim Nelson, CEO of solar manufacturer Solar3D, says that, true to the perception, solar technology is not quite ready for prime time.

The problem, says Nelson, is that solar is generally still not price competitive with fossil fuels for energy generation, says Nelson. Paradoxically, government efforts to subsidize the purchase of solar panels actually slow down the adoption of innovation that should ultimately make renewable energy more affordable.

The article also quotes David McFeely of SolarTech as saying local permitting delays and costs are a factor in slowing adoption — the subject of two other SHP student projects, including one just finished last month. (More later).

In the College of Business, we’re used to getting mentioned in the local Mercury-News, but national visibility — particularly for a student effort — is much more rare. Congrats to the students for the recognition of their hard work and value-added.

What employees do solar installers want?

SJSU has finished the first in its series of solar employer surveys. Recently, Prof. Meg Virick presented an hour summary of the insights gained into what employers want, in a one-hour webinar hosted by SolarTech that attracted 42 listeners.

In February and March, we surveyed 52 solar installers, and heard back from 32 of them. Of the respondents, 12.5% also manufacture their own products their own manufacturing. While 100% sell PV, 25% do solar hot water and some also did concentrated solar power, solar cooling or cool roofs.

Overall Trends

From the HR managers, 2011 is shaping up to be a much better year than 2010. Last year, 22% of the companies downsized and 28% increased. This year, 56% expect to increase with a median staffing increase of around 13%.

We asked these companies about both their overall staffing needs, and then focused specifically on sales people.

Excluding sales, the most popular job category was installers — half the companies were hiring installers, at an average of 10 installers each. Other major job categories are technician, electrician, project manager and engineer. (However, the technician stats were skewed by one company planning to hire 100 workers here.)

Recruiting Sales People

The survey asked installers what sales positions they were most interested in hiring one of six categories:

• Entry Level Sales (Residential)
• Mid-Level Sales (Residential or Commercial)
• Senior Salesperson (Residential or Commercial)
• Inside Sales

The most popular job listings were mid-level jobs, both residential and commercial.

As with other scientific research on staffing, the survey asked about knowledge, skills and experience. Some knowledge and skills were similar between the two most common jobs, but others varied dramatically.

Common to both types of jobs was knowledge of general solar industry concepts and (to a lesser degree) utility rate analysis and an understanding of the technology.
For residential sales, by far the most important knowledge was of sales and marketing concepts. The most important skills were speaking, social perceptiveness, active listening and persuasion.

For commercial sales, employers really wanted system sizing and costing knowledge, with system performance second. The desired skills were critical thinking, complex problem solving and judgement/decision making.

Employers also painted a very different view of compensation: The average residential sales rep had 60% contingent pay (i.e. commission) vs. 20% for commercial. At least one company gave its residential sales reps no base pay, while another gave commercial reps 95% base pay.

Interpretation

As a former biz dev guy, my personal opinion is that the surveys presented two different (and internally consistent) pictures.

The residential salesperson has to be good at personal selling a consumer durable. This would be also true for real estate, cars, electronics or other consumer durables. Given the nature of the business, it’s important to close the sale and move on.

In contrast, the commercial salesperson is managing a solution sale. His or her responsibility is to understand the customer’s needs and pick a unique solution (likely in the millions of dollars) to meet the firm’s needs. The sales rep builds trust over time through competence and responsiveness to those needs, and likely puts several person-days or person-weeks into scoping the sale.

For More Information

The slides and a complete video of our April 19 presentation are available online at the SJSU Solar Workforce website.

SJSU will be summarizing the survey in detail as part of our year-end report that will be posted to the website.

Testing solar without teaching it

Today we had the finals of the Lucas School entrepreneurial case competition, where 11 teams competed to orally present their analysis of a standard business case.

The case we used was Nanosolar, published in 2009 by Harvard Business School Press. The teams were asked to analyze Nanosolar’s strategies and recommend what it should do going forward (from 2009).

Today was the finals between the two remaining teams. I was fortunate to be selected as the faculty judge, along with two industry judges:

• Brian Stone is VP of sales and marketing for Nanosolar. A former manager of Siebel Systems and marketing VP for SunPower, he has an MBA from UC Berkeley
• Mike Balma is a consultant to Skyline Solar, has been active in SolarTech and previously held a range of marketing jobs at HP. He has an MBA from Stanford.

Actually, I was more of a moderator and emcee: I vowed beforehand that if our industry experts agreed on the winner, then I wouldn’t even vote.

The final two teams were:

• Dan Doung, Adam Harlow, Chris Heuser, John Shippy, and David Van Der Steen from our full-time MBA-One program;
• Jason Chan, Weiwei (Vivi) Chen, Dylan Crutchfield, Dion Jefferson, and Kellen Yeung, a hybrid between the MBA-One and our on-campus evening MBA.

Normally when I teach solar, I use my own industry note (available upon request) that describes the economics and (simplified) technologies of PV companies. I also lecture to discuss the industry.

Today, our teams only had the Nanosolar case to work from. There were a few problems in the case (that Brian plans to send back to Harvard). But even if we’d used the more up-to-date Nanosolar case from Stanford, it was clear the students would have had problems understanding a complex industry from 12½ pages of text.

Mike, Brian and I take for granted that everyone understands issues such as the relative efficiency of thin film and crystalline solar and the interdependence of PV cost, substitute costs and subsidies upon PV adoption. The students picked up some of these points from the case but on other issues had to make assumptions (that sometimes were wrong).

Of course, three years ago I would have made the same mistake. It was only by immersing myself in writing my own solar case in the Fall of 2008 that I came up to speed — followed by more teaching, blogging, and researching academic papers.

This comes back to a more general point that I’ve been trying to make as the College of Business and our Lucas graduate school update their curriculum. It’s hard to prepare students for the sort of tech industries that populate Silicon Valley without having some industry-specific knowledge. If you want to get a job in solar (or semiconductors or software) you need to know something about it.

This raises the question about whether we offer electives for all the various possibilities, provide a survey course that covers a range of industries, or integrate this material into our regular courses. We may end up using a combination of approaches.

After we heard the presentations today, Brian explained what happened to the company and why, while Mike offered more general industry observations. Then I got to announce the winner: team #2, the team of Chan, Chen, Crutchfield, Jefferson and Yeung.

Even the students who didn’t win felt like they learned a lot. Perhaps that’s the final take-home: beyond preparing the case, there are learning possibilities from listening to others and (in other cases) industry experts as guest speakers.

SJSU insights into slow solar adoption

On Friday, SJSU students and other industry experts presented their latest thoughts on how to speed adoption of residential solar power in the Bay Area. The occasion was a live Internet broadcast entitled “SolarTech Consumer Perception Webinar.” (About 90 people logged on to the broadcast.)

The webinar built on the consumer survey done by five Sbona Honors Program students: Faith Ebrahimim, Irene Foelschow, Morgan Hancock, Jennifer Sarvian, Tam Tran — in the marketing program supervised by Prof. Rob Vitale.

At the webinar, Sarvian introduced the group’s findings. Moderating the live session was Bob Couch of Orogen Marketing, the industry marketing guru who guided the students to their successful conclusion. All the prepared slides for the webinar have been posted to the SolarTech website.

Their presentation was supplemented by an industry panel consisting of Doug Payne (SolarTech), Jeanine Cotter (Luminault), Jessie Denver (City of San Jose and SJSU) and Andrew Yip (PG&E and the California Solar Initiative).

After the students pretested their survey, they diversified their risk by distributing the survey using three separate approaches: mailed (postage stamp and everything), email link and then in person. They obtained 224 answers, but limited their analysis to the 163 respondents from Santa Clara County.

The demographics were generally representative of potential solar buyers: 81% ages 45-64, 81% with some college degree, 74% making $100+K. The only concern was that — compared to the averages for Santa Clara County and for homeownership — the survey dramatically underweighted Asians and somewhat underweighted Latinos. (There is no reason to believe that race plays the same role as income or education in buying a $20K power system.)

Of the respondents, 11% already own solar systems. A total of 55% had done some research into solar purchase, and 49% intend to buy a solar power system.
After Sarvian presented the demographics, Payne summarized some of the other findings. Not surprisingly, consumers were most concerned with price (97%), followed by reliability (94%), warranty (94%), customer service (93%) and financial incentives (91%).

What distressed the panelist was that 83% of those planning to buy a systems won’t do so for at least two years. Yip (a SJSU EE graduate) noted that among California counties, Santa Clara County has by far the greatest adoption under the CSI subsidy program, with 15.3 megawatts and 3,472 systems. (The next largest was Fresno with 9.7 MW and Alameda with 2,065 systems.)

Cotter (CEO of a leading San Francisco installer) also was surprised about the reliability concerns, given that systems subsidized by CSI are required to have a 10-year all-inclusive warranty.

As with other SolarTech-sponsored projects completed by Sbona Honors students, the full report will be posted to the SolarTech website. Still, the webinar and the slides gave a sense of why several industry professionals found the SJSU student findings surprising and provocative, with important implications for how the industry should move forward in the future. (If anyone’s interested, several of the students are graduating in the spring and available for hire.)

Update: the report and slides are available to SolarTech members on the SolarTech website.

New insights from SJSU student researchers

During the fall semester, a team of SJSU marketing students from the Sbona Honors Program surveyed Bay Area homeowners about their knowledge of residential solar panels, particularly focusing on their costs and benefits.

After working with SolarTech, their advisor and sponsor concluded that they had identified some important new insights about the challenges faced in winning adoption of solar panel in California.

On Friday, our students will be presenting their findings at a free webinar broadcast by SolarTech. Their written report will also be posted to the SolarTech website after the webinar.

SolarTech and San Jose State University

From the SolarTech weekly newsletter, October 18, 2010

SolarTech and San Jose State University - a Winning Team!

Building on a successful collaboration earlier in 2010, two teams of business students from the Sbona Honors Program at San José State are now studying aspects of residential solar adoption on behalf of SolarTech and its members. A team of finance students is validating the estimates of various PV calculators, while a marketing team is asking consumers about their reasons for adoption (or non-adoption) of rooftop solar panels.

Cooperation by SolarTech members in these studies - as well as planned interviews and surveys of solar HR managers - will help SolarTech and the industry advance their goal of promoting solar adoption in California.

The finance team of Chris Chow, Y Nguyen and Nick Sabbatini is comparing the predictions of public calculators such as NREL’s Solar Advisor Model for a range of California locations. They are also seeking actual performance data and will be testing the sensitivity of the various calculators.

The Sbona Honors Program sends SJSU’s highest performing undergraduate business students into the field to help clients solve a real problem. For the finance project, Jeremy Neigher of Clean Power Finance has been volunteering his time to serve as the SolarTech client representative, providing both industry knowledge and client feedback to the students.

A similar role is being played by Bob Couch of Orogen Marketing, who is working with the SJSU marketing students: Faith Ebrahimi, Irene Foelschow, Morgan Hancock, Jennifer Sarvian and Tam Tran. The team has drafted a consumer survey about homeowner adoption motivations, and is negotiating for access to a representative mailing list.

The students were selected by Prof. Bill Devincenzi and Prof. Rob Vitale from their respective honors classes. Both teams are also getting feedback from David McFeely of SolarTech and Joel West of SJSU.

In the Spring, teams provided by Prof. Devincenzi and Prof. West studied the features of the solar calculators and surveyed local government attitudes towards streamlining installation permits. The studies are available on the SolarTech website (free for members, nominal fee for non-members) and summaries are available on the SJSU Solar Workforce blog: solarwork.blogspot.com.

Finally, another group of students will be studying the staffing needs of Bay Area solar companies, both large and small. The 43 students are undergraduate human resources majors taking a HR staffing class taught by Prof. Lauren Ramsay.

The students will be interviewing HR managers — or in some cases, business owners — to discuss their most important job categories, and the knowledge, skills and abilities required for these jobs. The interviews will both provide in-depth insights into workforce needs and also prepare the next generation of HR professionals to work in the cleantech sector.

Beginning in early 2011, SJSU plans a follow up from the interviews with a series of quarterly surveys of California’s solar industry employers. The surveys are being run by Prof. Meghna Virick, as part of the two-year SolarTech Workforce Innovations Collaborative (SWIC).

For more information about SJSU’s collaboration with SolarTech, contact Joel West at Joel.West@sjsu.edu.

The pulse of solar employers

At the Solar Workforce Project, we have two main tasks over the next two years: developing curriculum for white collar workers and systematically contacting employers to understand their workforce needs.

Right now, the HR task is front and center. Dr. Meghna Virick, associate professor of HR Management, is in charge of contacting the HR managers, while I’ve taken responsibility for building a database of solar employers (aided by a bevy of student assistants.)

We plan to use multiple methods to provide a convergent picture of solar workforce needs. Survey responses from a representative sample of California solar employers will allow for scientific inferences to be drawn for the entire state, while interviews with selected employers will help us understand the “why” and “how” that are hard to capture in a survey. Of course, any results that we release must protect the confidentiality expectations of our respondents.

The big push over the past month has been to build the employer database, starting with the Bay Area and expanding statewide. We began with several lists, and then added and deleted companies as we learned more.

The database will include a wide range of companies, including manufacturers (wafers, panels, modules, balance of system) — whether their manufacturing is in California or elsewhere — as well as installers/integrators, PPA operators, equipment providers and others that play a role in the industry. There is no upper or lower limit on the size of the company, and we are also including foreign companies that have their US HQ in California.

I am personally classifying the companies for their role in the solar value chain, in case we later need to do a survey of integrators or thin film manufacturers. We may also need to go back and clean up the classification — for example, to segregate “pure play” firms (like Skyline, SolarCity, or Solyndra) from companies where solar is only part of the portfolio (like Applied Materials, Areva or National Semi.)

Building an accurate database has turned out to be a far more daunting effort than we’d imagined — not to get the company names, but to identify a qualified HR professional to contact with our questions. (At a very small company, the HR manager is the president or owner.)

Our urgent priority is sending about 45 HR students into the field to interview the HR managers. Prof. Lauren Ramsay has graciously loaned us her Workforce Planning, Staffing, and Training class to conduct the interviews. Our hope is not only to understand local employer staffing needs, but also to help train future HR professionals to understand a growing cleantech industry — both from their own research, and from what the class learns as a group.

Later in 2010 or early in 2011, we plan to start our quarterly employer surveys to address questions of interest to SolarTech and other members of the state-funded SolarTech Workforce Innovations Collaborative. These surveys will be analyzed, and the results reported here, at the SolarTech or SWIC website, and eventually in academic research.

If any employer has questions about our survey — or wants to volunteer to join — they should contact Meg or me with any questions or ideas.

Photo: Dr. Meghna Virick, from her official college web page.