Equilibrium & Sustainability

Referrals could boost participation in low-income rooftop solar programs: study

Solar panels on rooftops of a housing development in Folsom, Calif., on Feb. 12, 2020. (AP Photo/Rich Pedroncelli)

California low-income households were more likely to participate in a state-subsidized rooftop solar energy program if they received direct referrals from family or friends, a new study has found.

While policies like the federal Inflation Reduction Act include measures to provide clean energy to low-income households at minimal or no cost, the dissemination of these services has thus far faced numerous challenges, according to the authors, who published their findings Thursday in Nature Energy.

Customers eligible for these services may lack information about the relevant technology, be distrustful of program providers or simply not have the bandwidth to inquire about the application process, the authors explained.

Aiming to identify ways to make participation more appealing, the researchers collected data from homeowners who received fully subsidized solar through California’s GRID Alternatives, which administers the state’s Single-Family Affordable Solar Homes (SASH) Program.

Although the program had already established that referrals were an important tool for finding new participants, the researchers said they wanted to pinpoint cost-effective and scalable strategies to optimize this process.

“Growing evidence points to the power of social networks to encourage adoption of new energy technologies,” lead author Kim Wolske, a research associate professor at the University of Chicago Harris School of Public Policy, said in a statement.

“For subsidized low-income programs, existing program participants may be especially important,” Wolske continued. “They know what it takes to qualify and can more readily identify eligible friends and family.”

SASH had an existing rewards initiative through which customers received postcards reminding them that they could get $200 if they referred friends who went on to install solar, according to the study.

Wolske and her colleagues — from the Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory — decided to test different referral strategies by sending all 7,680 of GRID Alternatives clients one of three randomized mailers.

The control situation mimicked the status quo and simply included the postcard reiterating the possible $200 reward and including a toll-free number and a website address.

A second mailer then sought to test what would happen if this request also included a $1 gift as a thank-you to existing clients for their participation, the authors noted.

The goal of this strategy, they explained, was to create a feeling of reciprocity — that customers could return the favor by referring qualified households to the program. The inclusion of that dollar led to twice as many nominations — one referral from every 52 clients — and 2.6 times the number of solar contracts, the authors found.

In the third mailer, the researchers opted to combine the dollar gift and $200 reminder with a postmarked referral slip, on which participants could simply write the contact information of friends on the back of the card and drop it in the mail.

This blend of strategies generated one referral for every 14 clients, as well as 5.2 times more solar contracts than the isolated offer of a $200 reward, the authors concluded.

“To get the most out of peer referrals, the request for referrals needs to remove uncertainty about what referring entails and make the process simple,” Wolske said.

Fostering a sense of reciprocity may be particularly effective in clean energy subsidy programs, as doing so reminds customers about “the much larger gift they already received — in this case a rooftop photovoltaic system,” according to Wolske.

Going forward and beyond California’s GRID Alternatives program, the researchers expressed hope that their findings could help inform future policy measures.

“The strategies we’ve identified could work for other energy assistance programs, from heating and insulation upgrades to electric vehicle incentives,” Wolske said. “The ultimate goal is to extend the reach of these programs, making our energy systems more efficient, cleaner and inclusive.”

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