Who doesnâ€™t love win-win situations?
It seems like sometimes we (particularly in the nonprofit sector) spend a huge amount of time and energy trying to convince people to support things that they donâ€™t truly care about.Â Yes, a person may care in the abstract about fragile ecosystems being destroyed by climate change (who doesnâ€™t love cute polar bears), but those feelings donâ€™t always translate into taking action.
Why? Because weâ€™re human and we respond to direct incentives. Itâ€™s such a simple concept, but itâ€™s one that often gets lost as we deal with social issues. While someone might care about saving the polar bears, they arenâ€™t able to take those steps in their day-to-day lives to do things like conserving energy or switching to renewables.
In my work with DC SUN we often focus on identifying ways to help grow the solar market. Rather than trying to convince people that going solar is the â€śrightâ€ť thing to do in a purely moral way, our goal is break down market barriers so people can save money on their electricity bills by going solar. This creates a clear incentive for solar and makes going solar a much easier decision.
About a year ago we realized that thereâ€™s a large swath of small businesses and community organizations that arenâ€™t being served by DCâ€™s solar market. These groups get overlooked because installers are focused on either individual residential systems or large commercial projects with more substantial profit margins. So, even though the price of solar has fallen, groups like nonprofits and small businesses are being left out of the market. Thatâ€™s a problem, since saving money on utility bills means nonprofits can dedicate more funds to mission-based activities, and small businesses can focus on growing their operations.
But, we had to correct this market failure in a way that created value for installers, rather than just trying to convince them to take the moral high ground and work with these smaller organizations for little or no profit.
Our solution ended up being based on a pretty simple idea: the Costco model. We assembled a group of nonprofits and small businesses that were interested in going solar and asked for installers to bid on the group as a whole. On their own each organizationâ€™s solar project would be pretty small, but together we are able to achieve economies of scale and a lower price. We are also able to get a lower price because we (DC SUN) did all of the legwork identifying potential customers for the installers.Â Combined, we expect groups to save about 30% on the cost of solar than if they solicited bids on their own. More importantly, now installers, nonprofits and small businesses have a clear incentive to go solar (and we are achieving our mission of increasing installed solar capacity in DC).
How were we able to create this a win-win situation?
- We understood the DC solar market. This came from a number of years of working in the space and understanding the types of projects installers look for.
- We made sure everyone participating in the initiative benefits from their participation. If the organizations arenâ€™t saving money by going solar then itâ€™s not worth it for them to take on the (albeit limited) risk of having panels installed.
- We operate as a neutral organization and weâ€™re upfront about the fact that we are not affiliated with any particular installer. Because of this organizations were much more comfortable working with us. They knew we werenâ€™t trying to sell them anything that didnâ€™t make sense for their organization.
- We were able to partner with a local company (SolSystems) to create an online platform for installers to submit bids for the projects. This streamlined the process and will make it easier for us to do similar group purchases in the future.
- We were able to partner with a national organization (Community Power Network) to create an online donations page to raise money for the projects, in order to make the economics even better for the nonprofits.
Ultimately, we hope to one day no longer be needed in the process as a middleman. By demonstrating the bulk purchase model and creating the online tools for other groups, we hope we can remove ourselves from the transaction and make this process more efficient.
In the short term, though, you canâ€™t beat a win-win situation as a means to creating social change. Whether youâ€™re working on a nonprofit campaign, developing a for-profit project, or designing a government program to reach specific constituents, itâ€™s important to always think about the motivations of the people you aim to reach. Are you creating a strong incentive for them to participateâ€”one that will provide short-term, tangible benefits in their life? Sometimes we get caught up in trying to convince people why they should see it our way, when we should really be making them an offer they canâ€™t refuse.
photo credit: princeofpetworth.com