Up for debate: Do brands matter in solar power?
San Jose, California-based SunPower Corp has banked on building a brand, a strategy that bucks the idea others argue — that brands don’t matter in the solar power industry because the renewable energy is essentially a commodity.
“When I buy electrons, I don’t care what flavor they are. I do care a lot about what they cost,” said Stephan Dolezalek, managing director of Silicon Valley venture capital firm VantagePoint Venture Partners.
At the Reuters Global Climate and Alternative Energy Summit in San Francisco, Dolezalek said different customers, such as residential versus utilities, analyze solar power choices differently. But Dolezalek doubts brand matters within the specific categories of solar power systems.
“Remember white boxes PCs were going to run over the brand-name players? But people wanted to buy from a brand-name player because they wanted the service, they wanted that future-proofing –that I don’t buy it today and it’s obsolete in six months,” Werner told Reuters at the summit in San Francisco.
Werner said his company, which is vertically integrated, charges a premium for its high-efficiency solar panels and added services for residential customers. He said brand carries weight for commerical customers and utilities, too, because they make significant capital investments and want a product with low technology risk.
“Does brand matter? I think it is definitively yes today,” Werner said. “Will it be sustainable? Of course that’s subjective, but you see tons of examples where brand and scale matter,” he said, noting how eBay has maintained a brand status among Internet auction sites.
Venture capitalist Dolezalek said that where brand does play a role in the solar sector is “whether my bank is willing to lend me for my project on an unknown brand.”
“As long as the bank is willing to lend on it, it really doesn’t matter whose brand it is because it is a commodity,” Dolezalek said.
We were wondering where readers stand in the debate. Does brand matter in solar power systems? Does its importance vary, depending on whether the panels are used in a small roof-top system or large field installation? Is solar power just a commodity — or is it more complicated than that?
(Top photo: Passengers at the Oakland International Airport sit next to an advertisement for solar power company SunPower Corp. Photo credit: Laura Isensee/Reuters. Second photo: Tom Werner, Chief Executive Officer of SunPower, speaks during the Reuters Global Climate and Alternative Energy Summit in San Francisco. Kimberly White/Reuters)