California may be able to increase participation in its low-income solar homes program with one dollar and a postmarked envelope, researchers say.
A new study — recently published in Nature Energy and funded by the Department of Energy — tested out strategies for increasing customer referrals for free solar panel installation. It found that adding a $1 “thank you” gift and simplifying the referral process effectively recruited new customers.
“It’s striking that $1 makes a difference, leading to twice as many solar referrals and contracts,” said Kim Wolske, the study’s lead author and a researcher with the University of Chicago Harris School of Public Policy.
Wolske and the study’s co-authors teamed up with the nonprofit Grid Alternatives to develop and test the strategies. Grid Alternatives is the program administrator for California’s Disadvantaged Communities — Single-Family Solar Homes (DAC-SASH), which provides free solar panel installation for low-income households.
The study was conducted from September 2018 through May 2019, when Grid Alternatives was managing the Single-Family Affordable Solar Homes program, a predecessor to DAC-SASH.
Researchers sent one of three referral incentives to 7,680 low- to moderate-income households in California. One group, which served as the control, got a postcard reminding customers of a $200 referral reward. Another got the postcard with a $1 “thank you” gift for being a Grid Alternatives user. A third group got the postcard, $1 and a postmarked referral slip.
Customers who received the $1 gift were twice as likely to refer other potential customers, when compared with customers who just got the postcard. That, in turn, doubled the number of solar contracts.
“The intent of the dollar was to invoke a sense of reciprocity,” Wolske said. Researchers thought the $1 would remind customers of the larger gift they had already received — solar panels provided by Grid Alternatives — persuading them to pay it forward.
Even more customers — five times as many as the control group — completed referrals when they got a postmarked referral slip with the mailer and $1 gift. By using the slip, customers could avoid calling the program or going online to refer someone.
The results show the advantage of calling on past customers to widen the consumer base, Wolske said. Such studies — which show the importance of word-of-mouth referrals and feelings of reciprocity — could inform how energy companies and programs communicate, she said, affecting the evolution of clean energy use.