Purple enjoys a day out at ecobuild…

Trevor Wilkinson, Purple Market Research

In addition to doing a lot of market research in the environmental and energy efficiency sector, I like to think that I’m a green person.  So I was wearing two hats as I made my way to the ecobuild show at ExCeL one sunny morning in early March.

Ecobuild showcases environmentally friendly products, technologies and services and this year celebrated “ten years of championing a greener built environment”. I’ve visited ecobuild for many of those ten years and I can assure you that it’s come on a long way and is now a major exhibition. Speakers included Ken Livingstone, Ed Davey and (most eminent of all, if audience numbers are anything to go by) Kevin McCloud of Grand Designs fame.

Ecobuild: The show highlights

A topical highlight of ecobuild was the debate on our energy future, which explored the pros and cons of fracking, nuclear and renewable energy.  The speakers were a good mix – Paul Ekins, Professor of Energy and Environmental policy at UCL, Nina Skorupska of Renewable Energy Association, Professor Stephen Cowley, Chief Executive of the UK Atomic Energy Authority and Dr Paul Goby of Aston University and former CEO of E.ON.

Perhaps surprisingly for those of us who have spent much time gathering market intelligence in this area there was a high consensus on key issues.  All agreed on the importance of energy efficiency (the UK has some of the lowest energy prices in Europe, but we still have large numbers of people in fuel poverty as heat escapes from roofs, walls and windows – “the best electron is the one we don’t need” as Paul Goby said).  All were scathing about the political class and saw 18 years of lily-livered, inconsistent and unclear energy policies as a recipe for uncertainty and inaction.  All concurred that policy should be based on technical expertise and research.  And all accepted that the right solution probably includes a mix of fossil fuels (including shale gas), nuclear and renewables.

Is renewable energy the answer?

Renewables have promised so much (free, sustainable energy, freedom from the tyranny of depleting and polluting fossil fuels) and yet have found it difficult to deliver. Nina Skorupska pointed out that the target for renewable energy is 15% of energy by 2020 and as of the end of 2012 that figure stood at 4.2%.  It’s a challenge all right.

The cost of renewables has fallen in a short period of time, particularly where technologies have been promoted under Government schemes (which is, after all, one of the main points of such schemes). The main beneficiary of Feed-In Tariffs has been Solar PV (418,000 installed under FiTs since it was introduced in 2012, 99% of all installations).  In that short time the average cost of a household installation (as quoted by the Energy Saving Trust, DECC and others) has fallen from £12,500 to £7,500.

Despite that reduction in costs, the fact is that a householder still needs to find £7,500 to get solar PV installed.  The middle-class, middle-aged early adopters either have that cash or can access it fairly easily.  However most people, even if they could raise £7,500, would rather spend that cash on a new kitchen.  The renewable energy industry would love it if people aspired to having renewables in the way that they do to having a new kitchen installed.  The reality is, however, that the jury is still out on whether solar panels on the roof increase or decrease the value of the home.

Despite that uncertainty over the impact of renewables on house value, a potentially fruitful approach is to position installing renewables as an investment.  With Feed-In Tariffs, the initial investment can be recouped in ten years (that timescale hasn’t changed over time as the Government has decreased FiT payments over time as the cost of installation has decreased).  The trouble is that householders want a return on investment in five years, not ten.  Indeed the average family moves house every seven years.

Renewables have yet to win the market share

There are many other barriers to the adoption of renewable energy: low awareness and knowledge of the technologies available and their benefits, poor perceptions, unwillingness to endure the disruption of having them installed and general apathy.

There’s a job to be done raising the profile of renewables and persuading the public (and the business community) to invest in renewable technologies, but it appears that the renewables industry (and Government) haven’t got there yet.

Trevor is an expert in advanced market insights into the energy sector, as well as business to business and customer behaviour research. For help in understanding your market and how to gain your share, get in touch and he will be happy to discuss your project with you.