Regional Transformation to Solar Power in Sacramento
High Tech Strategies was hired to help the electric utility in Sacramento, California (SMUD) evaluate the effectiveness of their strategy for market transformation to solar power. SMUD’s pioneering initiative was designed to stimulate demand for and production of solar power, so it could become commercially viable.
The Challenge
In June of 1989, Sacramento became the first, and only, community in the world to shutter a nuclear power plant by public vote. The plant was closed during an era of enormous concern about nuclear safety and economics.
Closing the Rancho Seco Nuclear Plant initially forced SMUD to buy more than half its power from neighboring utilities. SMUD needed to replace the power generated at Rancho Seco and management ultimately decided to pursue a regional transformation to renewable energy, primarily solar.
Transformation to Solar
The challenge with large-scale transformation to solar energy is getting people who are primarily risk averse to adopt new innovations. The mainstream population believes that most new technologies are unproven and risky. Properly designed value-alignment strategies will overcome adopter hesitancy and accelerate technology adoption.
- Reduce the perception of risk by emphasizing references from people customers trust, and reliability of service.
- Enable customer-friendly systems by standardizing all processes and eliminating bureaucratic procedures.
- Stabilize government policies by creating and supporting long-lasting incentives and eliminating regulatory barriers.
- Ensure high levels of expertise through the recruiting and training of independent installers and service providers.
The Solution
Warren Schirtzinger of High Tech Strategies was selected as a special advisor and consultant to the Supervisor of Distributed Technologies at SMUD.
In this assignment Warren provided the design and implementation of a multi-phase customer research program, which allowed him to provide a comprehensive assessment of SMUD’s residential solar program. Warren also guided the refinement of SMUD’s strategy and framework to align it with mainstream homeowners in the Sacramento area.
The Results
The primary focus of this transition strategy was to align SMUD’s solar program with the needs of mainstream ratepayers. Through qualitative research, Warren and the SMUD team were able to fully articulate the personal needs, requirements and motivations of SMUD’s mainstream audience.
Through understanding the pragmatic and risk-averse nature of the mainstream buyer, SMUD was able to design an effective transformation strategy that leveraged all of the inherent advantages of an electric utility. This included creating a compelling, low-risk solution for mainstream customers by offering a complete, standardized solar-panel package while simplifying both interconnection and permitting.
As incumbent utilities grapple with the daunting challenge of reinventing themselves, the pioneering work at Sacramento Municipal Utility District (SMUD) provides a credible foundation from which to construct a new-age road map for utilities going forward.
High Tech Strategies’ Contribution
- Behavioral science. We applied our proven methodologies for predicting the responses of people when they are presented with a new technology or innovation.
- Technology-adoption expertise. Our team of experts understand the dynamics of technology adoption and know how to enable widespread acceptance of innovative solutions.
- Change management expertise. Our knowledge of how people accept new innovations enabled us to find ways to simplify processes and save costs.
- Industry-wide education. The methods and strategies we employed at SMUD are documented and available to help utilities of all types successfully navigate the transition to a clean energy future.
The Impact
Early in the program, SMUD had over 50% of all grid connected solar in U.S. and well over 1000 mainstream residential participants. SMUD’s transformational program was the blueprint for the California Solar Initiative (CSI), and the CSI has in turn led the entire US forward toward a clean energy future.
Worldwide Recognition
For over a decade, the SMUD solar program was at the forefront of large-scale implementation of solar power and has served as a successful model both nationally and internationally. During that period, the program won a number of superlative awards presented by:
- the California Municipal Utilities Association
- the Interstate Renewable Energy Council
- the Solar Energy Industries Association
- the Utility PhotoVoltaic Group/Solar Electric Power Association.
The SMUD solar program also received the prestigious International Energy Globe Award from Austria.
- Steady growth. Predictable customer demand, rather than haphazard large volume purchases, provide stable economic conditions that eliminate supply shortages and the need for price increases.
- Local economic development. The local community can benefit by attracting manufacturing facilities to the area.
- Proven methodology. Predictable, reliable, and substantial multi-year purchase commitments will eliminate disruptive boom/bust cycles and allow the solar industry to grow in an orderly fashion.
