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On March 15 and 16, 2022, SaveOnEnergy.com® commissioned a YouGov survey of 655 American adult homeowners to gauge their knowledge of solar panel costs and government incentives. One of the major findings of the survey was that millennial homeowners were almost six times more likely to own solar panels (29%) than baby boomers (5%) and three times more likely to own them than Generation X homeowners (10%).
According to the survey findings, 95% of baby boomers and 90% of Gen X currently do not own solar panels, compared to 71% of millennials. Half of the millennial homeowners (50%) are more likely to anticipate paying off a solar loan of $20,000 within 3-5 years compared to Gen X (33%) and baby boomer homeowners (31%). The findings beg the question of what drives millennials to adopt solar more actively than boomers and Gen Xers.
Understanding generational attitudes toward solar energy
Several factors corroborate SaveOnEnergy’s findings on the high solar adoption rate among millennial homeowners relative to baby boomer and Generation X homeowners.
- According to a recent survey by Sunpower, a solar company, millennials are more concerned about the environment and sustainability than older generations. Millennials appear to worry more about their future and their children’s future in the face of more and more extreme weather events. Millennials are conscious of the overall contribution of consumer behavior to climate change, including their own environmental impact. Sustainable living is not a fad for millennials but a lifestyle. Many millennials supportenvironmental organizations, consume more plant-based foods, and drive electric cars than older generations.
- Millennial consumer choices differ from older generations. According to the Nielsen 2017 Total Audience Report findings, most millennials are eager to pay more for environmentally friendly and sustainable products. The report’s findings show that working for sustainability-minded companies is also important for many millennials. By demanding more sustainable practices in the office, they increasingly create a positive environmental change in the workplace.
- As more millennials become homeowners, they are more eager to go solar. Deloitte’s “Resources 2017 Study – Energy Management: Sustainability & Progress” report found that 64% of millennials were either “extremely” or “very” interested in installing residential solar panels. They also expressed a strong interest in community solar. 52% of total respondents considered using clean and renewable energy sources as one of their top three most important energy-related matters .
- As the share of the millennial consumer demographic outpaces baby boomers, their favorability of solar power will further expand the adoption of solar. The millennial demand for solar will boost the value of homes that have higher energy efficiency and solar panels. According to a new study by E.ON, a sustainable solutions company, 78% of millennials would reject homes without minimum energy efficiency standards while house hunting.
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Why is solar energy important to millennials?
Solar energy is an environmental and practical matter for most millennials. Even if the upfront cost of solar is high, millennials (25-40 years old) are willing to pay for it because of the environmental benefits.
Besides, solar panels are no longer luxury items. The cost of solar has fallen by 90% over the past decade. Solar power has become cheaper than gas and coal, and it will be the cheapest source of electricity in the U.S. by 2030. It is possible to reduce the cost of residential solar panels more by taking advantage of government incentives. Millennials recognize that solar panels can save them money over the long term, reduce their monthly electric bills, and add value to their homes. So, they are more open to investing in them than older generations.
How are utilities responding to the solar energy preferences of millennials?
Millennials are changing the traditional fossil fuel-based utilities. As consumers, millennials demand renewable energy from their utility companies, and the latter are trying to adapt to the shifting energy preferences. According to Utility Dive, an industry publication, millennials tend to have a more active relationship with their energy providers than older generations. If they do not receive top-notch customer service from their energy providers, millennials are likely to switch to one that offers better service and more clean energy options. Millennials are also willing to pay more for clean energy to help their utilities shift to using more sustainable energy sources than fossil fuels.
Millennials are also a driving force behind sustainable investing that includes environmental, social, and governance principles (ESG). The cornerstone of ESG is generating a competitive investment return while having a positive societal impact. A 2019 study by Morgan Stanley found that 95% of millennials were interested in sustainable investing. According to CNBC, they have significantly boosted sustainable investing since 2010. Nearly one-third of millennials heavily invest in businesses with strong ESG principles and practices.
As millennials overtake baby boomers as the nation’s largest generation, their environmental values and preferences will continue to reshape the energy market.