Why green is such a dirty word | RenewEconomy

Why green is such a dirty word

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As corporates begin to embrace the renewable energy opportunity on their own terms – as an issue of cost and security and a chance to develop lucrative new business models – the suggestion is emerging that it’s time to admit defeat on Green as a powerful marketing tool. Or does it still have a key role to play?

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Last Saturday, at the Tedx 12 event in Sydney, social movement entrepreneur Jeremy Heimans played an advertisement from the American solar leasing company SunRun.

It introduced Paul and Cathy who, the narrator told us, installed solar panels on their roof to help save baby dolphins around the world. “Actually, no,” says Paul. “It’s more the money thing.” But surely it was about the baby dolphins, pleads the narrator. “Well, that’s great too,’ says Cathy. “But we really love to save money.”

Heimans, a New York-based Australian who is co-founder of the social network movements Get.Up and Avaaz, loves baby dolphins, but he used the advertisement to demonstrate his thesis for the event: that green marketing is all but useless.

Surveys may well show that 75 per cent of people have great intentions (or even more, like the Big Solar campaign that took to Canberra on Monday armed with a survey pledging 94 per cent support for large-scale solar), but only 2-3 per cent of the population will actually follow through. Which is why green products barely represent 3-4 per cent of market share.

And while green marketing is moving into the mainstream, it is being co-opted and appropriated by anybody and everybody, including those who are not green at all. “That really matters, because if the sustainable products we really need only have 3-4 per cent market share, that is not going to create the shifts that we need,” Heimans says.

The money thing is clearly understood in Australia. Solar installers understand this, because most of their advertising has been pitched at the tabloids and talk-back radio shows, the very markets where climate change is ridiculed and green is a dirty word; because the cost of living is paramount, and solar can deliver those savings.

And it’s true of the commercial sector too. As one budding renewable energy entrepreneur (who is seeking to sell solar and hybrid systems to miners and other off-grid locations burdened by the huge cost of diesel) told me recently – “just don’t mention climate change or any of that green stuff.” A global survey released by Ernst & Young on Monday confirmed it. More senior executives at global corporations are getting across energy supplies, and the opportunities of self generation and incorporating renewables – but only as a cost and security issue. Climate change and green issues rank low on their radar.

Heimans says that it’s time to admit defeat on green as a powerful marketing tool. “If you can compete on price, say with solar, don’t talk about green, lead with price,” he says. “And where you can’t compete on price, pull other levers, such as status.”

The SunRun advertisement has a special relevance to Australia. The solar leasing business has had a dramatic impact on solar PV in the US market and has shifted the demographics of the technology because it offers zero-cost up-front payments, as well as a reduction in power bills.

One of its competitors, Sungevity, has just announced it is setting up a solar leasing business in Australia, and, it is suspected, SunRun and another US rival SolarCity, may be following close behind, along with a host of local copy-cats.

Community renewables projects are also being put together. Heimans cites the case of Solar Mosaic, a US group that attracts investors to invest in a community, and similar organisations are emerging in Australia. Heimans calls it “crowd funding,” and it is the sort of activity he is up to at his new venture Purpose.com. “Not everyone has a roof you can put solar panels on. But you can have a stake in solar without having it on your own roof – it can go on the library or the community centre. And you can get a financial return.”

The impact of these new business models should not be underestimated, because such structures and innovative financing will accelerate the arrival of grid parity – where energy produced by consumers is cheaper than the electricity they can source from the grid.

Yet another report predicting solar grid parity across the globe within a few years was released last week – this was by a research and consultancy firm GlobalData. It predicts that solar parity will be widespread within five years – across the US by 2017 and across China by 2015. It suggests that wind is already at wholesale parity in the key markets of India (where it costs just $0.042/kWh to $0.062/kWh), and in China (where it costs $0.055/kWh).

It is a significant development. Not only will it have a profound impact on incumbent business models, it means that deployment can continue without waiting for breakthroughs in international climate change talks or consistency in policy making (although it does require regulatory barriers to be dismantled).

The underlying strategy behind climate change denial, the blockages at international climate change talks, the push-back against clean energy incentives, the resistance to regulatory change, is to protect existing businesses and to delay the inevitable. Solar, like other technologies before it, is proof that deployment is the key to price reduction.

This is well understood on all sides. It is why you see Republicans on the Senate Armed Services Committee trying to ban the US department of Defence from testing and rolling out out new generation biofuels, and it’s why they like to trot out the likes of Bjorn Lomborg, who argues that renewables and new technologies should be kept in the test tube and R&D.

That’s why it’s important that policies that encourage deployment remain in place, even if it means higher costs in the short term. And that is where Green still does have a key role to play – in policy and in leadership, if not in consumerism.

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  1. Michael Mazengarb 8 years ago

    I think this idea can applied to the policy environment as well. It’s becoming ever difficult to sell more abitious policies for renewable energy and energy efficiency incentives on the basis of the good that they provide for the environment.

    If Anna Rose’s documentary “I can change your mind…” taught us anything, it’s that common ground between enviromental advocates and political conservatives can be found in promoting renewable energy on its merits as a sustainable and secure source of energy. The environmental benefits should be seen as a bonus.

    Renewable Energy is a growth industry and it can promote greater energy security and reduce reliance foreign sources of energy.

    Progess in the industry, particularly in the large-scale renewables segment, is being stimied by having been caught up in the climate change “debate”. There is real potential for it to be able to uncouple itself from this ideological battle and be judged on its own merits.

  2. Ross McNeilage 8 years ago

    During my many years working for large international corporates’ sales as both a salesman and a sales trainer we distilled the motivation for purchase of any commodity, from IT to fax machines to ball point pens, down to four reasons:

    TIME.. This (insert product here) will be able to save your company X hours per month of staff time.
    IMAGE.. How good will this make you look, or how good will this make your company look in the eyes of your customers.
    MONEY..This (insert product here) will cost $X per month, compared to your current costs of $Y per month, saving $Z straight off your recurrent costs.
    EFFORT.. With (insert product here) you only need to (action/effort) compared to the multi layered action process you have in place at the present time. Simple? Yes?

    The research has probably found that corporations’ needs are more inclined to Money and TIme issues than Image or Effort issues, which are usually the concerns of the individual. I have noticed that while the Green Energy movement is filled with very enthusiastic, scientifically qualified and intelligent people, a lot of them are understandably lacking in the sales skills area.
    Personally I am not surprised by the findings, and although it causes us greenies to anguish over their blindness to the “greater good” we need to accept that, while their reasons for accepting green technology may be different to ours, the end game is the same.
    Thanks for the article Giles.

  3. jd 8 years ago

    Actually Ross, as someone who could probably be branded a greenie, I’m damned excited that we can sell renewables in a whole bunch of ways other than environmental benefits. I agree with you that “the end game is the same”.

    Enrol people in the solutions (perhaps through an understanding of the TIME analysis you presented – thanks) Once people experience the benefits of the solutions, it’s amazing how how they start to feel more comfortable with acknowledging the problems.

  4. Scott 8 years ago

    “If you can compete on price, say with solar, don’t talk about green, lead with price,” he says.

    I agree.
    Solar PV is getting close to this (even without FIT), so concentrate on the financial (hip pocket) benefit – no-one can argue with that.
    (and the renewable benefits will be delivered by stealth)

  5. john porritt 8 years ago

    No doubt at all – ditch green, substitute renewable and promote potential savings and profit

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