Date of Award

Spring 1978

Document Type

Thesis

Degree Name

Master of Arts

Department

Business

Abstract

This 1978 thesis by Sandra L. Wilson explores the market potential for solar-assisted heat pump systems in new residential constructions within the St. Louis metropolitan area. The study utilizes a Market Opportunity Analysis (MOA) model to assess the economic, natural, technological, social/political, and legal environments influencing the adoption of this technology.

The analysis highlights that while the technology for solar-assisted heat pumps—which combine solar collectors with heat pump efficiency—is viable, consumer demand remains low. This sluggish demand is attributed to high initial costs (estimated between $10,000 and $12,000 in 1978), a lack of public understanding, and the absence of observable demonstration models. The study identifies the "innovator" consumer segment (approximately 3% of the market) as the primary target for early adoption, typically characterized as well-educated individuals in higher income brackets.

Wilson concludes that widespread adoption will likely be slow without significant government intervention, such as tax incentives or mandatory installation, to overcome the economic barriers and the conservative nature of the local housing market. The thesis recommends that solar energy associations increase lobbying and public education efforts and that manufacturers focus marketing strategies specifically on the "innovator" demographic.

Research Highlights

  • The Problem: The study evaluates the market feasibility and consumer demand for installing solar-assisted heat pump systems in new residential constructions within the St. Louis metropolitan area during the late 1970s energy crisis.

  • The Method: The author applies a Marketing Opportunity Analysis (MOA) model, utilizing Product Life Cycle and Diffusion of Innovations theories, supported by interviews with local industry figures such as Warren Cargal of Interface Design and Jack Wittiker of the Missouri Office of Energy.

  • Quantitative Finding: Local cost estimates for solar systems ranged from $10,000 to $12,000; the study projected 4,000 new housing starts in St. Louis for 1978, identifying a theoretical maximum market of 120 homes based on a 3% "innovator" adoption rate; industry officials estimated a solar company failure rate of approximately eight out of ten firms.

  • Qualitative Finding: St. Louis consumers were characterized as "extremely conservative" with low demand for solar innovation; identified barriers included high initial capital requirements, the inability of consumers to "trial" the complex technology, and a disorganized distribution channel that failed to provide builders with standardized equipment packages.

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