Term project on consumer behaviour towards solar power

A Major Project Report
On
CONSUMER PERCEPTION TOWARD SOLAR
POWER PRODUCTS
Submitted for the award of the degree of Executive MBA
By
Imran Khan
DTU/2K13/EMBA/506
Under the Supervision of:
Dr. Rajan Yadav
Associate Professor, DTU
Delhi School of Management
Delhi Technological University
May, 2015
1

DECLARATION
I hereby declare that the Project report titled “Consumer Perception toward Solar
Power Products” is my original work and has not been published or submitted for
any degree, diploma or other similar titles elsewhere. This has been undertaken for
the purpose of award of the degree of Executive MBA at Delhi School of
Management, Delhi Technology University.
Signature of Student
(Imran Khan)
Place : Delhi
Date : 20.05.2015
2

CERTIFICATE
This is to certify that the project entitled “Consumer Perception toward Solar
Power Products” is the bonafide work carried out by Imran Khan, student of
Executive MBA, Delhi School of Management, Delhi Technological University,
during the year 2015, in partial fulfillment of the requirements for the award of the
Degree of Master of Business Administration and that the project has not formed the
basis for the award previously of any degree, diploma, associate ship, fellowship or
any other similar title.
Signature of Guide
(Dr. Rajan Yadav)
Place : Delhi
Date : 20.05.2015
3

ACKNOWLEDGEMENT
“It is not possible to prepare a project without the assistance & encouragement of
other people. This one is certainly no exception.”
On the very outset of this report, I would like to extend my sincere & heartfelt
obligation towards all the personages who have helped me in this endeavor. Without
their active guidance, help, cooperation & encouragement, I would not have made
headway in the project.
I am extremely thankful and pay my gratitude to my faculty Dr. Rajan Yadav for
his genuine concern, guidance and valuable inputs during the course of this project.
I extend my gratitude to Delhi Technical University for giving me this opportunity.
I also acknowledge with a deep sense of reverence, my gratitude towards my parents
and member of my family, who has always supported me morally as well as
economically.
At last but not least gratitude goes to all of my friends who directly or indirectly
helped me to complete this project report.
Any omission in this brief acknowledgement does not mean lack of gratitude.
Imran Khan
MBA (2013-2015)
Delhi School of Management
Delhi Technological University
4

ABSTRACT
In the project I considered most common factors influencing the consumers buying
behavior on solar energy products. It includes factors that make consumers to buy
particular solar energy products. The factors describe pre-purchase and post-purchase
behavior.
The methodology adopted was descriptive research. Descriptive research is done
using factor analysis by using a statistical tool called SPSS. A standard and
structured questionnaire was prepared and used during the interviews as a tool for
research to find the level of importance of each factor. The response of common
people was collected. They were asked to rate the factors on a Likert five point scale
in agreement with the statements and scale ranges from 1= Strongly Disagree to 5 =
Strongly Agree. A total of 78 samples were collected in a period of two months.
5

TABLE OF CONTENTS
S.
No.
Description Page No.
1. Introduction
• Industry profile
• Organization profile
• Objective of the study
1-14
2. Literature Review
• Marketing Environment
• Consumer Behavior
• Government Policy Initiatives
15-21
3. Research Methodology
• Research Objective
• Importance of the study
• Scope of the study
• Research design
• Research sample
22-24
4. Data Analysis
• Data collection sources/techniques
• Descriptive statistics
• Findings and recommendations
• Limitations of the study
25-41
5. Bibliography/references 42-43
6. Annexure 44-51
6

Industry Profile:
Since Independence, the Indian Power Industry has continuously faced the
issues with meeting its power generation goals. The conventional energy sources
especially coal hasn’t been able to meet the demand and the country needs a true
approach to meet its ever increasing energy demand.
Solar energy, a clean source of renewable energy which emits zero carbon,
has got a remarkable potential of the energy which can be harnessed using several
types of devices. Solar power industry has gain a pace in its development and its
systems are now available for commercial as well as domestic use with enhanced
advantages at minimal cost of maintenance. Usage of Solar Power systems or devices
has become financially viable with various government initiated tax incentives,
subsidy schemes and rebates. Now a days, solar energy is getting more and more
popular in developing and developed nations. In developing nations, it is on early
adoption stage whereas in developed nations, most of them are trying to switchover
to renewable energy sources completely.
The world’s population is growing continuously and hence increases in the demand
of water, food and energy which in turn affecting environment. The world’s
population has become more than double from 3.2 billion since 1962 to 7.2 billion in
2015 and it has been forecasted to grow up to 9.2 billion by 2050. Resources or
reserves of coal, gas, oil and uranium are depleting day by day. The frequent usage
of these non-renewable resources have put pressure on the energy sector to move
away from carbon emitting processes to solar, nuclear and other environmentally
friendly options.
(“United Nations Department of Economic and Social Affairs Survey, 2012”)
World Energy Scenario
“According to the 2007 BP Statistical Energy Survey”, in 2006 world’s electricity
generation was 19,028 terawatt-hours (TWh). The nations who were generating the
most electricity are the USA, China, Japan, Russia, India, Germany, Canada and
France. The demand of electricity of the World in 2006 was 15,000 TWh and is
forecasted to be 30,000 TWh in 2030.
8

In 2004, there were 16% of Nuclear and 18% of Hydro and rest from fossil fuels
which make the world’s electricity mixture. According to the IEA (2006), the main
sources of electricity produced worldwide were coal (39.8%), gas (19.6%), hydro
(16.3%), nuclear (15.8%), oil (6.7%) and other renewable (1.8%). As compare to
other fuel options, the contribution of cal has been growing at a rapid rate in recent
years. In recent years, there has been a transformed interest towards nuclear than
hydro. As of March 2007, in comparison to Africa who was using hydro potential
mere 5%, Asia was using 40% and Europe was at 80%.
Indian Energy Scenario
India, being a tropical country, has a very vast potential for Solar industry where
approximately 45% of rural households do not have access to electricity.
Today India’s population is nearly 1.25 billion and currently facing a huge energy
demand. In the production and consumption of electricity, India ranked fifth in the
world. The production of electricity has been increased during the last few years at
an increasing rate equating to the population expansion rate of the country. The
electricity produced by India is mostly from coal (53%) and it is forecasted that coal
reserves in the country will last up to 2050. In India, more than 72% population
resides in villages and more than a half of the villages have not been electrified and
remains without electricity. To meet this ever increasing demand, solar energy is the
best solution to cater the energy needs and bridge the demand supply gap.
Fig. 1 “Demand Supply gap of power in India from XI to XI five year plans”
9

India, being located between the Tropic of Cancer and the Equator, is solar energy
resources rich country. The average temperature ranges from 24°C – 28°C and
receives 4–7 kWh of solar radiations per sq. meter which means more than 5,000
trillion kWh radiations throughout the year leads to approximately 300 sunshine
days. States like Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh,
Orissa, West Bengal, Haryana and Punjab have huge prospective to harness solar
energy as these states are located near to the tropic of cancer and the equator. Also
the majority of population resides in rural areas and there is a huge potential for solar
energy to be promoted. Solar energy can help to reduce the usage of firewood and
dung cakes which emits the carbon and carbide.
India is slowly gaining its fame in the harnessing of the solar energy due to
various ambitious and comprehensive state and centre driven solar policies and
projects under the National Solar Mission. As per the 2014-15 budget, Finance
Minister has already declared an aid of rupees 500 Crore to develop some mega watt
solar power plants in Tamil Nadu, Rajasthan, Gujarat, Leh & Laddakh. He also
announced to develop solar powered agricultural water pumping stations and 1 MW
solar parks on the canal banks at the estimated cost of $ 74 million and $ 18.5 million
respectively.
According to BRIDGE TO INDIA and GTM research report, India is facing a perfect
storm of factors that will boost solar photovoltaic adoption at a rapid pace in coming
years. The day by day falling price of SPV cells being imported from the U.S. and
China has equated with the growing cost of grid generated power in India. Being a
developing country is facing a huge electricity shortage which often runs 10% to
13% of daily requirement.
Indian solar industry has an immense potential to grow at a rapid pace. It is believed
that in future, most of all the gadgets will be powered with solar energy rechargeable
battery bank. The huge usage of non-renewable energy resources results in depletion
of these fuels, day by day increasing electricity demand and increasing awareness
about renewable energy sources have encouraged people to adopt such technologies
which can harness the abundantly available solar energy.
10

Various Renewable energy technologies for domestic use
• Photovoltaic’s (PV) is a process of generating electrical power by converting
solar radiation (Photon energy) into direct current electricity using
semiconductors which exhibits the photovoltaic effect. To generate
photovoltaic energy, solar panels are used which are manufactured with the
help of numerous solar cells connected in a series and parallel combination.
Materials used to produce photovoltaic cells include crystalline silicon,
amorphous silicon, cadmium telluride and copper indium gallium
selenide/sulphide.
• Solar thermal energy (STE) is a technology which is used to harness solar
energy to get thermal energy (heat). Solar thermal collectors are classified by
the United States Energy Information Administration (USEIA) as Low-
temperature collectors are flat plates generally used to heat swimming pools;
Medium-temperature collectors are usually flat plates and used for heating the
water or air for residential and commercial use and High-temperature collectors
ponder sunlight using mirrors or lenses and are generally used for electric
power production.
• Biogas typically refers to a gas produced by the biological breakdown of
organic material in the deficiency of oxygen. Organic dissipate such as dead
plant and animal substance, animal manure and kitchen waste can be converted
into a gaseous fuel called biogas.
• Smokeless Chulah is the superior versions of the conservative chulah and has
higher consumption of heat and a design which has a chimney to make a
passage for the fumes thus making the cooking relatively smoke free.
• Pellet stove is a stove that burns dense wood or biomass pills to create a source
of heat for residential and commercial spaces. By slowly injecting fuel from a
storage box into a burn-pot area, they create a stable flame which does not
require any physical adjustments.
11

Now a days, the demand in India for solar powered products has been raised very
significantly and expected to grow more at a rapid rate. In Indian market, there are
many products which are available and a few of them are as follows:
• Solar Portable
Lanterns,
• Solar Home Lighting
Systems,
• Solar Street Lighting
Systems,
• Solar Power Packs,
• Solar Powered
Mobiles,
• Solar Chargers,
• Solar Shavers,
• Solar Candles,
• Solar Night Lamps,
• Solar headphones,
• Solar Fans,
• Solar Heaters,
• Solar Power Plants,
• Solar Torches,
12

Fig. 2 “Solar Power Products”
Today, India being world’s 3rd
largest economy, the
economy has risen gradually over the last 30 years.
Since 2000, it has grown at a rate of 7% averaged
annually. Demand in electricity has grown at a rate of
10% annually which is similar to the growth rate of the
economy. According to a survey, there will be a 92 GW
electricity demand over the next 10 years.
The Government of India and its state governments
have created a major initiative called ‘The National
14

Solar Mission’ (refer to fig. 3). The main feature of the
mission is to make India a global leader in solar energy
sector and the mission has envisages a target to install
solar generation capacity of 20 GW by 2022.
Fig. 3 “National Solar Mission Plan”
To put a thrust to the National Solar Mission Plan,
government has been made a mandate to install and use
solar powered equipments at all government buildings,
hospitals and hotels. The government has significantly
expanded its solar plans to achieve 100 GW of solar
capacity with a target investment of US$ 100 billion. By
the end of February 2015, the energy sector has
15

generated 961.77 BU (during April, 2014 to February,
2015) whereas the installed capacity was 261.05 GW.
The overall generation capacity of the energy sector is
about 1103 TWh out of which mere 13% to 15% is
being generated through renewable energy sources.
The daily power outages on an average for commercial
as well as for domestic are of 5 to 10 hours which
includes planned and unplanned outages. In India, more
than 40% of electricity is being stolen which in turn
makes the losses to the electricity producers and to
minimize these losses, they charges more money from
the genuinely paying customers. Today, Solar based
energy is contributing mere 0.5% only with a grid-
interactive solar power totaling to 2.12 MW from 33
such installations. Over the next ten years, the Indian
GDP is targeted to increase at 8%. By 2017, the power
demand may rise to 315-335 GW from 120 GW in 2015.
(http://www.indianmirror.com/
indian-industries/solar.html)
Factors that Drives the Indian Solar Energy sector
The two major factors that drive the current and future
growth of the Indian solar energy sector are Demand
side growth drivers and supply side growth factors.
• Demand side growth factors
India is suffering continuously a shortage of
supply to meet the demand with an average
demand-supply gap of 12% of total power supply.
The demand-supply gap is just because of increase
in the need which plays a major role for the
growth of this sector. The Power Ministry has
16

forecasted an increase from current demand of 660
KWh to 1900 KWh by 2032. The policies such as
JNNSM which is aimed to support investment in
the solar energy sector which in turn help to
develop a market for solar energy and driving the
costs down. An increasing public awareness
associated with fossil fuel such as energy scarcity
and environmental preservation also propel the
demand for eco-friendly energy which leads the
growth opportunity for the solar power sector.
• Supply side growth factors
Today, the current power generation is dependent
a lot on non-renewable natural resources such as
petroleum and coal which are depleting day by
day and this has forced the government and the
power generating companies to gaze on renewable
energy resources especially solar power. The
constructive atmosphere formed by government
through various subsidy schemes and policies has
encouraged power generation companies to invest
in this sector and therefore endorsing the growth.
17

Fig. 5 “Drivers of demand and supply and major
challenges”
Challenges Faced by Indian Solar Energy Sector
The Indian solar industry is still in its promising
stage and facing many challenges such as lofty
cost for the production of solar power. The cost of
solar electricity production is Rs. 16.54/unit. The
production is carried out by several components
and out of which solar cells are imported (nearly
80%) from other countries. This import attracts
high duties, levies and custom duties which in turn
lead to increase in the cost of overall system. The
solar projects are capital intensive and due to lack
of an effective financing schemes and policies
hamper the growth in the sector. Inequality in
solar potential across states is another major
challenge which is evident from the irradiance
map given below.
18

Fig. 6 “Irradiance Map of India”
Currently in the solar energy sector, research and
development is still in its initial stage and have not
attain a pace due lack of collaborative and goal
driven efforts. For exploitation of solar energy in
India, technological improvements are required by
which the efficiency of current solar energy
devices can be improved. To facilitate this,
government has to support full R&D schemes and
provide inducements along with the current
subsidy schemes.
The key reason for the restricting the growth of
this sector is lack of standards which results the
fragmentation of the market among suppliers and
19

manufacturers. Standardization of the
specifications and systems will validate the cost
being incurred by the manufacturers as R&D and
newer technologies to meet common
specifications. Currently the solar industry facing
the main challenges is to increase consumer
awareness about the benefits and also the industry-
government cooperation to boost the industry.
Government Initiatives and Schemes for the
Development of Solar Energy sector
In 1992, India got its first exclusive ministry for
renewable energy development which was named as
Ministry of Non Conventional Energy Sources (MNES).
Since Oct, 2006 it is known as Ministry of New and
Renewable Energy (MNRE) which helps to boost the
renewable energy sector by various schemes.
• National Action Plan on Climate Change
(NAPCC) inducts a government policy which
has mandated a percentage of electricity to be
generated through renewable energy resources.
“(NAPCC envisages renewable energy to
constitute approximate 15% of the energy mix
till 2020)”
(http://indiapowersector.com/home/tag/napcc)
• On the 11th
January, 2010, Jawaharlal Nehru
National Solar Mission (JNNSM) was launched
by Dr. Manmohan Singh (former Prime
Minister, India) and set the ambitious target to
install 20,000 MW of grid connected solar power
by 2022 to reduce the cost of power generation
through solar power with the help of followings:
20

o Long term policy
o Large scale deployment goals
o Aggressive R&D and
o Domestic production of critical raw
materials, components and products.
(http://www.mnre.gov.in/solar-
mission/jnnsm/introduction)
• For the promotion of Solar Energy, various
subsidy schemes launched under JNNSM:
 30% subsidy is given by central
government for home solar power plants
and AP Govt. to offer 20% extra subsidy
for solar units.
 National Bank for Agriculture and Rural
Development (NABARD) is giving 50%
loan for solar unit’s installations.
 For households below the poverty line,
100% capital subsidy would be provided
as per norms of the Kutir Jyoti Program.
• There are some incentives on energy generation
from grid interactive solar power projects
(Thermal and SPV both).
• Subsidy schemes on accelerated development and
deployment of solar water heating systems under
the JNNSM.
• Promotion of Solar Thermal Systems for air
heating/Steam generating applications, Solar
buildings and Akshay Urja Shops.
• Setting up 1,000 MW of Grid-Connected Solar PV
Power Projects by Central Public Sector
Undertakings (CPSUs) with Viability Gap
21

Funding (VGF) under Batch-V of Phase-II of
JNNSM.
• A set target of 400 megawatt biomass power
projects for the 12th plan period and 100
megawatt during the current financial year.
Investment Opportunities
There is tremendous scope for the investment in solar
energy sector and government of India has started to
consider all possible measures to promote this sector in
the country. The initiative of various policy and
incentives schemes has already been launched by
government and coming up with new policies time to
time as per the requirement of the industry to boost it. A
few of investment opportunities are as follows:
• Joint Venture: a number of companies are
entering in this sector as a joint venture with
leading PV manufacturers. As there is no set
condition specified by MNRE for the formation of
joint ventures, a general condition which is
already existing and specified by Ministry of
Industry, Secretariat for Industrial approvals and
reserve bank of India is applicable for this sector
too.
• Export Oriented Units (EOU): It is possible to
set up a plant as a 100 percent Export Oriented
Unit. As, Export Oriented Units are permitted to
import raw materials and components duty-free
and also they are eligible to sell up to 20 percent
of their production in domestic markets.
22

• Technology Development: The government of
India (central or state), research organizations,
autonomous societies, universities, IITs and
industries (with suitable set-up for R&D) are
supporting research and development projects.
Top 10 Solar Giants In India
Some of the top players in the solar industry are Central
Electronics, Emmvee Solar Systems, Jupiter Solar
Power, Lanco Solar, Mahindra Solar One, Moser Baer
Solar, Reliance Industries Ltd-Solar Group, Jakson, Tata
Power Solar Systems and Vikram Solar.
Organization Profile
Vikram Solar is an internationally acclaimed
organization which specializes in manufacturing of SPV
Modules. It is a subsidiary of Vikram group of
companies, boasting of a glorious history of over 40
years in engineering and manufacturing activities and
H.Q. in Kolkata. They owned one of the most
technologically advanced SPV module manufacturing
facilities in India and they have ISO 9001-2008
accredited manufacturing plant, locate in the special
economic zone (SEZ) of Falta, West Bengal, which is
spread over a sprawling 45,000 sq. ft. area and boasts of
a 150MW installed production capacity. They have a
pan India presence as well as a global presence with
offices in Europe and Africa. Having built a strong
foundation in the sustainable energy market and being
one of the front-runners among leading solar PV module
manufacturers, Vikram Solar has not only fostered
innovation but has built trust, honesty and social
responsibility
23

Vision
At Vikram Solar, we have put together all the
fundamental qualities – innovation, technology and skill
in perfect coordination with management, experience,
and analysis to transfer this vision into reality. Customer
satisfaction is paramount to our success ever since our
inception, as we continue with our rich legacy to
achieve greater feats in the near future.
Mission
At Vikram Solar, we combine technological acumen
with managerial skill and forge experience with
innovation, analysis and judgment to provide optimum
value to our global customers.
Products
1. Solar Panels
2. Solar Charger
3. Solar Heaters
4. Solar Lights
 Solar Street Lights
 Solar Led Lamps
5. Solar Power Plants
Objective of the Study
1. To identify and asses the factors affecting the
customer’s buying decision for renewable energy
technologies products for domestic use.
24

2. To evaluate and analyze the factors inhibiting the
marketing of New and renewable energy
technologies products for domestic use.
3. To critically evaluate the policy initiatives of the
government for the adoption and diffusion of New
Renewable energy products for domestic use.
25

CHAPTER – II
LITERATURE
REVIEW
26

Literature Review
Marketing Environment
Vernon (1996) in his theory of product life cycle has
identified products in the introduction stage as those
products which have lower demand and higher cost of
production. In other words, these are those products
which have just entered in the market. Renewable
Energy Technological (RET) products like the solar
water heater have been in the market for more a hundred
years as reported by the California Energy Centre. But
still the use of this vast resource has been by a very few
or the technology has not been adopted as widely as it
should have been. However, there are also numerous
examples to make the case for REP (Renewable Energy
Product) strong with potential for widespread adoption.
As reported by The Rural Energy Foundation,
Netherlands, (2010) the rural energy Foundation
programme in the sub-Saharan African Solar Now
programme which has identified retailers and
distributors for Solar Energy Technology since 2007 and
provided training in Technology, marketing, sales and
business administration etc. This has now given access
to 3 Lac people in just three years. A similar experience
has been executed by Sun Lab BOB which is based in
Lao which provides affordable, reliable solar electricity
to rural household through rental services as reported in
an article ‘Lighting Up Rural Lao’(2007) in Appropriate
technology. Mbogo (2001) states that approximately 2
billion people living in developing countries have
27

limited access to modern energy supplies which makes
them dependant on kerosene for lighting and also to
spend substantial amount on other sources of energy. He
argues that solar lanterns produced by organizations
which can withstand the harshness of environment and
also be accessible to the target customers by way of
financing schemes have great prospective. The
acceptance of solar energy products in a society is not
just affected by the presence of suppliers of solar energy
products but also as concluded by Zahran et.al (2008) on
others as environment, socio-economic and political
factors have a greater role in the acceptance of solar
energy products. Some of the scientists have an opinion
that renewable energy technology is still beyond the
reach of common man and the support infrastructure
like massive electricity storage systems are a deterrent
to the widespread adoption as argued by Lee and
Gushee (2009). Though by the use of renewable
technology and specialized electricity generation and
distribution has been a relatively non-viable option at
commercial level but at the domestic level and in the
rural areas of developing countries like Bangladesh and
India approximately 1,65,000 people have been
benefitted by approximately 25,000 solar home systems
which light up their basic energy equipments
(Approximate Technology 2006). Efforts are being
made to make RET products affordable for the
household consumption.
Consumer Behaviour
According to Schiffman and Kanuk (2007), suggested
the below model for consumer decision making, which
28

consider the relations between personal factors and
external influences which pals an important role when a
consumer makes a purchasing decision. With the help of
this model, Murphy et. Al (2008) finds a steady trend
among interests, perception and concerns for
environment friendly products.
Fig. 7 “Consumer Decision Making Model”
There are varied expectations of consumers of different
products from marketers, those interested in health and
wellness expect more value for money, more efficient
and in-turn the marketers must adopt measures like -
combining environmental and economical sustainability
as the purchase intent is more in personal lifestyle
products. The green claim should be reinforced and
support adequately at the retail level. Fairer & Neame
(2006) observed that in the United Kingdom the policy
for inspiring the market has not resulted in widespread
adoption of RET (Renewable Energy Technology)
29

products. However the early adopter and majority have
shown a positive perception for the environmental
factors, the limiting factors for adoption are financial,
economic and aesthetic description. A contrary
observation has been done by Bang, Elinger,
Hadjimarcou & Traichal (2000) wherein using the
reasoned theory approach for their study in the United
States they concluded that there exists a positive
relationship between belief about salient consequences
and attitudes towards paying more for renewable
energy. They have also observed that though the
concern level was high but the knowledge level for the
renewable energy was relatively low and therefore
suggest that information based campaigns could be a
solution to improve the cognition and in turn lead to
stronger belief about salient consequences of using
renewable energy.
In the Indian context Mavuri (2011) has observed that
the consumer buying behaviour for solar products is a
typical experience as the attributes that drive to purchase
solar products are slightly different as that of usual
products and education and income has a large impact
on awareness of the customers about the solar energy
products. Also, there is a need for creating confidence in
the consumers of solar products by the producers about
addressing the problems of usage and after sales
services to avoid the effect of negative word of mouth
from the current consumers on future (potential)
demand. The Indian consumers are still price sensitive
which is also observed by Vagela (1993) who concludes
that people who are educated and have high income are
aware of Solar Products. As observed that family and
friends being the strong influencing factors in buying
decision, since word-of-mouth a important medium of
30

communication and therefore the role of opinion leaders
is of great importance in decision making. The other
aspects important from consumer point of view for solar
products are aesthetic look of the product, cost,
sturdiness, awareness, availability, after sales service
and number of service centre.
The Technology Acceptance Model Davis (1989)
explains how users come to accept and use a
technology. The model suggests when prospective users
encounter a new technology, a number of factors
influence their decision about how and when they will
use it, notably:
Fig. 8 “Technology Acceptance Model”
• Perceived usefulness (PU) - is “the degree to
which a person believes that using a particular
system would enhance his or her job
performance”.
• Perceived ease-of-use (EU) -is “the degree to
which a person believes that using a particular
system would be free from effort”.
31

Krishnaswamy (2006) concluded that in the Indian
context large number customers failed to understand the
need of the product, some of them were content with
their existing product and for some price remains to be
point of concern while consider to adopt a new
technology majority:
Q1: Why are the Indian consumers not adopting
New and Renewable energy products?
H1: Indian consumers are not adopting the RET
products due to low awareness.
products due to lack of motivation.
products due to incorrect perception of the
products
Marketing Strategy
The product specific features have a great role in the
inducement of adoption of renewable energy products.
Researchers (Caird & Roy 2008: Smith. K 2009) have
observed that products which have greater usability,
higher functional efficiency and certain level of
customization have higher acceptance in the society.
The other factors which have been identified to boost
the market performance are improvement in value
equation, reinforcement of reliability, reduction in
complexity, communication of correct message and
exploration of new markets (Milford, J. & Blais, M.
(2009)).
Pricing of the renewable energy products still remains a
challenge even in the developed economies like United
Kingdom where consumers have shown greater interest
in lesser priced energy efficiency products (Caird, S. &
32

Roy, R. 2008), even in the developing countries like
India, price becomes a major deterrent for those who
have low income levels to adopt such products (Mavuri,
S. 2011; Vaghela, 1993)
The present generation consumers are environment
friendly and they do pay attention to the company’s
reputation and advertising argues Smith (2009). It has
also been observed by Davis (1993) that various
mediums like billboard ads, radio ads and ads in print
media have been there to connect the product awareness
to environment friendliness however still there are lesser
ads to promote the economic viability of these products.
Q2: Why have the marketers of New and renewable
energy products not been able to create
widespread diffusion of the technology?
H4: The marketers of the New and Renewable
energy products are not targeting the right
consumers.
H5: The Marketing Mix strategy is not appropriate
as per target audience.
Policy Initiatives for promotion
The strategic plan for New and Renewable Energy
Sector for the period 2011-2017 published by the
Ministry of Renewable energy, Government of India
(2007) and a report published by ICLEI (2007) have
observed the various new features and initiatives for the
renewable energy. Targeting a 10% share of renewable
energy production India plans to produce 10,000 MW of
power generation by 2012. These policies also support
FDI which include provisions for fiscal and incentives
for renewable energy programs. A proposal is also given
33

for 100% equity participation in joint venture under this
foreign investment policy. Investment under automatic
route is also permitted by reserve bank of India. Foreign
investment board is also set up to help foreign investors.
It is a single window agency which promotes FDI in
renewable energy technology in India. Ministry of
commerce and industry made industrial policy under
which Ministry of Energy Sources promoting medium,
small, mini and micro enterprises for manufacturing
various types of renewable energy systems and devices.
A five year tax holiday is allowed for renewable energy
power generation projects. Imports of power projects are
allowed and exemption in state sales tax policies for
smaller scale industries. The Indian Renewable Energy
Development Agency (IREDA) has been set up under
Ministry for New & Renewable Energy (MNRE) and is
a specialized financing agency to promote and finance
renewable energy projects.
Following is a short list of new measures:
• Income tax breaks,
• Accelerated depreciation,
• Custom duty/duty free import concessions,
• Capital/Interest subsidy,
• Incentives for preparation of Detailed Project
Reports (DPR) and feasibility reports.
More details regarding other policies are as follows:
• 100 percent income tax exemption for any
continuous block of power for 10 years in the first
15 years of operations,
• Accelerated 100-percent depreciation on specified
renewable energy-based devices or projects,
34

• Accelerated depreciation of 80 percent in the first
year of operations,
• Interest rate subsidies to promote
commercialization of new technology,
• Lower customs and excise duties for specified
equipment.
CHAPTER – III
RESEARCH
METHODOLOG
Y
35

Research Objective
The objective of the study was to identify the most
common factors influencing the consumers buying
behaviour to purchase solar power products.
Importance of Study
The study was conducted to identify the various internal
and external factors influencing the consumers buying
behaviour and correspondingly changes can be
suggested in the marketing approach of New and
Renewable energy products so that New and Renewable
energy products can reach to the masses.
Scope of the Study
The study was conducted in the urban and rural areas of
Delhi and NCR, a geographic area having conduced
climatic conditions for New and Renewable Energy
technology products as observed by Bhargav & Gupta
(2007) and the power situation marked with regular
power cuts, offers an appropriate location for the study.
Research Design
Research design is the plan/strategy/structure of
investigation envisaged sp as to obtain answer to the
research problem and to control the variance.
The research design can be the following types:
• Exploratory: It is conducted to have a better
understanding of a situation. It is not designed to
come up with the final answer or decision. With
36

the help of exploratory research, researchers
expect to develop hypotheses about the situation.
• Descriptive: It is used to achieve a wide
variety of research objectives. The descriptive data
become more useful for solving problems when
the process is guided by one or more specific
research problems. It requires a clear
specifications of what, who, where, when, why
and how of the research problem.
• Causal: It is used when researchers requires
stronger evidence that a particular action is likely
to produce a particular outcome.
Initially the research design was exploratory till
identification of parameters later it becomes descriptive
when it comes to evaluating common factors influencing
the consumers buying behaviour.
Although the data description is factual, accurate and
systematic, the research cannot describe what caused a
situation. Thus, descriptive research cannot be used to
create a causal relationship, where one variable affects
another. In other words, descriptive research can be said
to have a low requirement for internal validity.
The description is used for frequencies, averages and
other statistical calculations. Often the best approach,
prior to writing descriptive research, is to conduct a
survey investigation. Qualitative research often has the
aim of description and researchers may follow-up with
examinations of why the observations exist and what the
implications of the findings are.
37

Research Sample
Sampling Plan
Since it is not possible to study whole universe, it
becomes necessary to take sample from the universe to
know about its characteristics.
 Sampling Units : Residents
of Delhi & NCR.
 Sampling Size : 78
respondents.
 Sampling Technique : Convenient
Sampling.
 Research Instrument : Structured
Questionnaire.
 Contact Method : E-mail and
Online availability.
38

CHAPTER – IV
DATA
ANALYSIS
39

Data Collection Sources
Primary Data:
The primary data was collected by means of a survey.
Questionnaire was prepared and floated online to fill up
the questionnaire. The questionnaire was designed with
28 questions keeping in view all those possible factors
which can influence the consumers buying decision. The
responses of the respondents were recorded on a grade
scale of strongly disagree, uncertain, agree and strongly
agree for each question. The filled up information was
later analyzed to obtain the required interpretation and
the findings.
Secondary Data:
In order to have a proper understanding, an in depth
study was done from the various sources such as books,
articles from leading journals, magazines, reports of
agencies of national and international repute, various
websites and the articles from various search engines
like Google, yahoo search and answers.com.
Data Collection Tool
1. Strongly disagree
2. Disagree
3. Neither Agree nor disagree
4. Agree
5. Strongly Agree
Likert scaling is a bipolar scaling method, measuring
either positive or negative response to a statement. The
questionnaire consists of two parts. The first part
40

consists of 10 questions concerning the demographic
information of the respondent such as the name, age,
educational qualifications, income, family size, power
outage frequency etc. The second part consisting of 18
questions exploring the respondent’s perception about
the common factors influencing the consumers buying
behavior.
DESCRIPTIVE STATISTICS
Statistics
Age Gender
Family
Size
Qualific
ation
Occup
ation
Income
Grp
Living
in
Is Power
Cut
Aware
ness
SP
Usage
Future
Use
N Valid 78 78 78 78 78 78 78 78 76 78 78
Missing 0 0 0 0 0 0 0 0 2 0 0
Mean 1.67 1.13 4.49 2.56 6.10 2.79 7.13 2.28 2.79 1.59 .90
Median 2.00 1.00 4.00 3.00 7.00 3.00 4.00 3.00 4.00 2.00 1.00
Frequency Table
Age
Frequency Percent Valid Percent Cumulative Percent
Valid 1 32 41.0 41.0 41.0
2 40 51.3 51.3 92.3
3 6 7.7 7.7 100.0
Total 78 100.0 100.0
41

Gender
Valid 1 68 87.2 87.2 87.2
2 10 12.8 12.8 100.0
Total 78 100.0 100.0
42

Family Size
Valid 2 10 12.8 12.8 12.8
3 10 12.8 12.8 25.6
4 22 28.2 28.2 53.8
5 14 17.9 17.9 71.8
6 12 15.4 15.4 87.2
7 10 12.8 12.8 100.0
Total 78 100.0 100.0
44

Qualification
Valid 2 38 48.7 48.7 48.7
3 36 46.2 46.2 94.9
4 4 5.1 5.1 100.0
Total 78 100.0 100.0
45

Occupation
Valid 2 10 12.8 12.8 12.8
4 8 10.3 10.3 23.1
7 58 74.4 74.4 97.4
9 2 2.6 2.6 100.0
Total 78 100.0 100.0
46

Income Grp
Valid 1 8 10.3 10.3 10.3
2 22 28.2 28.2 38.5
3 30 38.5 38.5 76.9
4 14 17.9 17.9 94.9
5 4 5.1 5.1 100.0
Total 78 100.0 100.0
47

Living in
Frequency Percent
Valid
Percent Cumulative Percent
Valid 2 6 7.7 7.7 7.7
3 24 30.8 30.8 38.5
4 16 20.5 20.5 59.0
6 10 12.8 12.8 71.8
7 2 2.6 2.6 74.4
9 2 2.6 2.6 76.9
10 4 5.1 5.1 82.1
14 6 7.7 7.7 89.7
24 8 10.3 10.3 100.0
Total 78 100.0 100.0
48

Is Power Cut
Frequency Percent
Valid
Valid 1 28 35.9 35.9 35.9
3 50 64.1 64.1 100.0
Total 78 100.0 100.0
49

Awareness
Frequency Percent
Valid
Valid 1 28 35.9 36.8 36.8
2 4 5.1 5.3 42.1
4 44 56.4 57.9 100.0
Total 76 97.4 100.0
Missing System 2 2.6
Total 78 100.0
50

SP Usage
Frequency Percent
Valid
Valid 0 8 10.3 10.3 10.3
1 16 20.5 20.5 30.8
2 54 69.2 69.2 100.0
Total 78 100.0 100.0
51

Future Use
Frequency Percent
Valid
Valid 0 24 30.8 30.8 30.8
1 46 59.0 59.0 89.7
3 8 10.3 10.3 100.0
Total 78 100.0 100.0
52

KMO and Bartlett’s Test
• It is used to measure the sampling adequacy.
• It shows validity & suitability of responses
collected to problem.
• Value of .664 indicates good analytical tool for
factor analysis.
Kaiser-Meyer-Olkin Measure of Sampling Adequacy .664
Bartlett’s test of Sphericity
Approx. Chi-Square 135.758
df 21
Sig. .000
Conclusion:
 The sampling adequacy is mediocre as the value in
the table is 0.664.
 Therefore Factor Analysis is an appropriate
analytical tool to describe the sample data.
 Bartlett’s test of Sphericity indicates that the R-
matrix is not an identical matrix and hence
variables are not homogenous.
Cronbach’s Alpha
• It is not a statistical testing tool.
• It is a coefficient reliability (or consistency).
• The value of alpha is 0.872 which indicates the
internal consistency of the data.
Cronbach’s Alpha N of Items
.872 7
Conclusion:
53

 The value of alpha shows that the data is good for
further analysis.
54

Total Variance:
Extraction Method: Principal Component Analysis
Rotated Component Matrix:
Component
1 2 3
Economical .751 -.089 .335
Durability .834 .221 -.210
Environment Friendly .279 .293 .721
Low Maintenance .141 .900 .089
High Return .081 .819 .268
Latest Technology .676 .189 .287
Renewable .029 .126 .865
Rotation Method: Varimax with Kaiser Normalization.
Conclusion:
 It shows that product attributes like Economical,
Durability and Latest Technology are the most
sought after factors. Low Maintenance and High
returns are second most sought after factors.
Environmentally and Renewability are the least
factors on which consumer focus.
55
Component Initial Eigen Values Rotation Sum of Squared
Loadings
Total % of
Variance
Cumulative
%
Total % of
Variance
Cumulative
%
1 2.798 39.976 39.976 1.822 26.024 26.024
2 1.257 17.959 57.935 1.676 23.940 49.964
3 1.028 14.687 72.622 1.586 22.658 72.622
4 .695 9.926 82.548
5 .524 7.489 90.037
6 .378 5.405 95.442
7 .319 4.558 100.000

Component Transformation Matrix
Component 1 2 3
1 .606 .575 .549
2 .789 -.522 -.325
3 .100 .630 -.770
Rotation Method: Varimax with Kaiser Normalization.
Conclusion:
It is evident from the table that there are three
components in the study which are available to explain
72.6% of variance of the data.
Media
Frequency Percent Valid
Percent
Cumulative
Percent
Valid
word of mouth 20 40.0 40.0 40.0
tv advertisement 13 26.0 26.0 66.0
Newspaper 7 14.0 14.0 80.0
social network 10 20.0 20.0 100.0
Total 50 100.0 100.0
Conclusion: From the above table it is evident that, the
most influential media is word of mouth.
56

FINDINGS
1. The consumers mainly focus on product
attributes like economical, durable and high
return on investments.
2. The consumers are giving more importance to
the performance of the product than the price.
3. The consumers who prefer the performance of
the product indirectly prefer the durability of the
product.
4. The consumers also prefer that the product
should be more environment friendly and shall
use latest and established technology.
5. The Consumers have given more importance to
word of mouth than other promotional media as
it is the most influential media these days.
RECOMMENDATIONS
1. The company must establish R&D department.
2. Most of the people are not aware of solar
products, so the company must bring awareness
in people through various promotional activities.
3. The company must educate the people in rural
areas about the solar products.
4. The company must bring awareness in people
about government subsidies on solar products.
5. The company must educate the farmers about
working of their solar water pumps.
6. The company must improve their distribution
channel.
7. The company must improve after sales service.
8. The company must recruit efficient engineers.
57

LIMITATIONS
1. A small sample size of 100 consumers is taken,
so exact inference cannot be drawn about the
population from this sample size.
2. Time period was short and resource constraints.
3. This study was based on the prevailing
consumer’s perception toward solar products but
it may change according to time, technology and
development, etc.
CHAPTER – V
BIBLIOGRAPH
Y/
REFERENCES
58

Bibliography
1) Jain, Manisha, Gaba, Vikas and Srivastava, Leena
(2006), “Managing Power Demand; A case study
of residential sector in Delhi”, TERI
2) Ministry of Power, Power Sector at a Glance “All
India”
http://www.powermin.nic.in/JSP_SERVLETS/inte
rnal.jsp.
3) Ministry of New and Renewable Resources, Solar
Energy Centre http://www.mnre.gov.in
4) Meisen, Peter (2006), “Overview of Renewable
Energy Potential of India”, Global Energy
Network Institute
5) Garud, Shirish (2010), “Making solar thermal
power generation in India a reality”, pp 2. TERI
6) Press Information Bureau, Govt. of India (2008),
“Impact of Climate Change and National Action
Plan on Climate Change”,
http://pib.nic.in/release/rel_print_page1.asp?
relid=44098
7) Ministry of Power, Government of India (2014).
Annual Report.
http://www.powermin.nic.in/reports/pdf/Annual_
Report_2013-14_English.pdf
8) CERC (2013-14). Form template for Solar PV
Projects
http://www.cercind.gov.in/2009/ORDER/ANNEX
URE%205A%20Solar%20PV.pdf.
9) Agarwal, P.K. (2010), “Renewable Energy and
Renewable Energy Certificates in Indian Context”,
Electrical India magazine, April 2010, pp 112-117
59

10) SEMI India PV Advisory Committee (2009), “The
Solar PV Landscape in India – An Industry
Perspective”, PV group
References
• http://en.wikipedia.org/wiki/Factor_analysis”
• http://www.ncl.ac.uk/iss/statistics/docs/factoranaly
sis.php”
• http://www.eco-
ventures.in/pdfs/indian_solar_market_potential_an
ita.pdf
• http://indiagovernance.gov.in/files/solar_energy_e
conomy.pdf
• http://www.monroecollege.edu/AcademicResourc
es/ebooks/9781111532406_lores_p01_ch03.pdf
• www.electronicsb2b.com
Annexure
Study of Consumer Perception toward Solar Power
Products
Greetings!!
This survey is being conducted for research purposes.
Your response is precious to us which will help us to
carry out this study further. Your responses will remain
confidential and anonymous. We further assure you that
your responses will not be analyzed individually. We
truly appreciate your efforts to spare some time to fill
this survey and share your opinions. Thanking you in
anticipation.
60

Q2 Please select the age group you belongs to.
 18 - 30 Yrs (1)
 31 - 40 Yrs (2)
 41 - 50 Yrs (3)
 51 - 60 Yrs (4)
 Above 60 Yrs (5)
Q3 Please select your gender.
 Male (1)
 Female (2)
Q4 Please mention your family size (total members) in
the space provided below.
Q5 Please specify your educational background.
 Up to Class 12th (1)
 Graduate (2)
 Post-Graduate (3)
 Others (4) ____________________
Q6 Please select your occupation.
 Government Employee (2)
 Private Employee (7)
 Business (4)
 Homemaker (5)
 Others (9) ____________________
Q7 Please select your monthly income group.
 Up to 25,000 (1)
 25,001 - 50,000 (2)
 50,001 - 75,000 (3)
 75,001 - 1,00,000 (4)
 More than 1,00,000 (5)
61

Q8 Please select the area you live in.
 East Delhi (1)
 West Delhi (2)
 North Delhi (3)
 South Delhi (4)
 Central Delhi (5)
 Ghaziabad (6)
 Noida (7)
 Gurgaon (8)
 Faridabad (9)
 Other Metro City (10)
 Other Non-Metro City (11)
Q9 Do you face problem of daily power cuts in your
area?
 Yes (1)
 No (2)
 Can't Say (3)
Answer If Do you face problem of daily power cuts in
your area? Yes Is Not Selected
Q10 How frequently do you face power cuts in
your area?
 1 - 2 times in a Week (1)
 3 - 6 times in a Week (2)
 1 - 3 times in a Month (3)
 4 - 8 times in a Month (4)
 Rarely (5)
Answer If Do you face problem of power cuts on daily
basis in your area? Yes Is Selected
Q11 Please mention average number of hours per day
for which power supply cut happens?
62

Answer If How frequently do you face power cuts in the
area you live in? Never Is Not Selected Or Does the area
in which you live faces power cuts on a daily basis? Yes
Is Selected
Q12 Which of the following power backup system(s) do
you use during power cuts?
 Emergency Lights (1)
 Inverter - Battery System (2)
 Society Power Backup Connection (3)
 Generator (4)
 Other, please mention (5) ____________________
Q14 Are you aware of Solar Power Solutions?
 Completely Aware (1)
 Somewhat Aware (2)
 Totally Unaware (3)
Answer If Are you aware of Solar Power Solutions?
Completely Unaware Is Not Selected
Q15 How did you come to know about these solutions?
 Television (1)
 Newspaper (2)
 Friends/Relatives (3)
 Social Media (4)
 Road Shows (5)
 Exhibitions (6)
 Roadside Hoardings/Billboards (7)
 Others, please specify (8) ____________________
Q16 Do you use any Solar Power Solution(s) at home?
 Yes (1)
 No (2)
63

Answer If Do you use Solar Power Solution(s)? Yes Is
Selected
Q17 Please select the type of Solar Power
Solution(s) you use?
 Solar Lanterns (1)
 Solar Home Lighting Systems (2)
 Solar Water Heater (3)
 Solar Power Add-On to charge Inverter Battery (4)
 Solar Power Plant (5)
Answer If Do you use Solar Power Solution(s)? No Is
Selected
Q18 Would you like to use Solar Power Solution(s) in
near future?
 Yes (1)
 No (2)
 Can't Say (3)
64

Answer If Would you like to use Solar Power
Solution(s) in near future? No Is Not Selected
Q19 Which type of Solar Power Solution(s) you would
like to use?
 Solar Lanterns (1)
 Solar Home Lighting Systems (2)
 Solar Water Heater (3)
 Solar Power Add-On to charge Inverter Battery (7)
 Solar Power Plant (5)
Q20 Which of the following brands are you aware of?
 Central Electronics Limited (1)
 First Solar (2)
 Hi-Tech Solar (3)
 Luminous Solar (4)
 Maharishi Solar (5)
 MIC Electronics (6)
 Moser Baer Solar (7)
 Rashmi Solar (8)
 SELCO Limited (9)
 Solar World (10)
 Solid Solar (11)
 Sukam Solar Power (12)
 Sun Energy Systems (13)
 TATA Power Solar (14)
 Universal SolarTech (15)
 Vikram Solar (16)
 Vimal Electronics (17)
 Others (18) ____________________
65

Answer If Do you use Solar Power Solution(s)? Yes Is
Selected
Q21 Please mention Solar Power Solution Brand(s) you
are currently using.
1 ___________
2 ___________
3 ___________
Q22 Which factor(s) attracts you towards adopting Solar
Power Solutions?
 Based on Latest Technology (1)
 Durable (2)
 Economical (3)
 Environment Friendly (4)
 High Returns on Investment (5)
 Requires Low Maintenance (6)
 Renewable (7)
 Others (8) ____________________
66

Answer Invalid Logic Click Here to Edit Logic
Q23 Please rate the following factors in terms of their
importance, for selecting any Solar Power Solution.
1 (Lowest)
(1)
2 (2) 3 (3) 4 (4) 5 (Highest)
(5)
After Sales Support (1)     
Brand Name (2)     
Durability (3)     
Ease of Availability (4)     
Looks & Style (5)     
Maintenance Required (6)     
Offered Warranty (7)     
Performance (8)     
Popularity (9)     
Price (10)     
Sales Offers (11)     
Q24 How would you like to collect information about
latest Solar Power Solutions on your own?
 Internet (1)
 TV Advertisements (2)
 Newspapers (3)
 Friends/Relatives (4)
 Company website (5)
 Magazines (6)
 Social Media (7)
 Local Sales Office (8)
 Online shopping websites (9)
 Others (Please specify) (10)
____________________
67

Completely Unaware Is Selected
Q25 Would you like to receive information about Solar
Power Solutions?
 Yes (1)
 No (2)
Answer Invalid Logic Click Here to Edit Logic
Q26 Are you aware of a system that uses Solar Power
to charge inverter batteries ?
 Yes (1)
 No (2)
Answer If Are you aware of a system that uses Solar
Power to charge inverter batteries ? Yes Is Selected
Q27 Would you like to receive information about other
Solar Power Solutions like Solar Power Plant, Solar
Water Heater e.t.c.?
 Yes (1)
 No (2)
Answer If Are you aware of a system that uses solar
power to charge inverter batteries ? No Is Selected
Q28 Would you like to receive information about such
solutions?
 Yes (1)
 No (2)
68

Answer If Would you like to receive details about such
solutions? Yes Is Selected Or Would you like to receive
details about Solar Power Solutions? Yes Is Selected Or
Would you like to receive details about other Solar
Power Solutions; Solar Power Plant, Solar Water Heater
e.t.c.? Yes Is Selected
Q29 How would you prefer to receive information about
Solar Power solutions from our experts?
 Personal Interaction (1)
 E-Mail Communication (3)
 Telephonic Conversation (2)
 Social Networking (4)
Answer If How would you prefer to receive information
about Solar Power solutions?
q://QID57/SelectedChoicesCount Is Greater Than or
Equal to 1
Q30 Please mention your contact details to enable us
reach out to you.
Name (optional) (1)
Contact Number (2)
Address (3)
E-Mail Address (4)
Social Networking Account Name (5)
69

Term project on consumer behaviour towards solar power

More Related Content

What's hot (20)

Similar to Term project on consumer behaviour towards solar power (20)

Recently uploaded (20)

Term project on consumer behaviour towards solar power