As an installer, you want to focus your marketing efforts where the prospects for success are best. But it’s not always obvious where that is. It is tempting to focus on the wealthiest areas in your market—that way, you can avoid wasting time and money on prospects who don’t have the necessary cash or who can’t get a loan. But are there better ways to target? Our research suggests there are.
As part of our program to improve our understanding of the solar market, we have begun looking at installation data by zip code. We started with some data from New York state. The New York State Energy Research and Development Authority (NYSERDA) provides a database of over 10,000 installations completed under various state incentive programs dating back to 2003. We did an analysis by zip code and combined it with data from the 2010 US Census, to determine what characteristics are associated with a high level of solar penetration. We selected only residential installations for this analysis.
They can afford it, but will they buy it?
The most important thing we learned was that the zip codes with the highest adoption of solar were not the most affluent ones. There are about 1700 zip codes in New York State. When we listed them in descending order of the value of the houses, we could see that while the solar adopters tend to be found in neighborhoods with above-average housing values, there are surprisingly few solar installations in zip codes at the very top of the list.
There is minimal overlap between the richest zip codes and the zip codes with the highest solar penetration. In fact, only one of the most 100 affluent zip codes is also among the top 100 zip codes for solar. Solar installations tend to be in upper-middle-class zip codes, not wealthy ones. The average home value in the top 100 solar-adopting zip codes is $336,509. That is well above the New York state average of $243,195 for all zip codes, but it is not exactly wealthy.
New Paltz is not wealthy, but it has lots of solar (and it is a college town)
What is the New York zip code with the highest solar penetration? It is 12525, on the edge of New Paltz in the upper Hudson River valley. About 2.5% of the houses there have solar panels. The average house in that zip, according to the Census, costs $277,300, which is barely above the state average. It is a middle-class zip code.
Perhaps more significant is the fact that New Paltz is a college town. Many of the top 100 zip codes are in or near Ithaca, Poughkeepsie, Saratoga Springs, New Paltz, and other college towns. That suggests a possible marketing strategy for companies offering residential solar: focus your efforts in areas with colleges and universities. The ability of the prospect to pay (or get a loan) for the system is important, of course, but the New York data suggests that a college environment is at least as significant.
Although solar penetration is higher around New York college towns than it is elsewhere, there is probably plenty of room for additional growth in solar. The percentage of homes with solar in the top 100 New York zip codes ranges from 2.5% to less than 1/10%. We know from top solar states such as California and Hawaii that double-digit percentages are achievable. There is still lots of opportunity for solar, even in New Paltz.