What drives households' choices of residential solar photovoltaic capacity?. (September 2022)

• Record Type: Journal Article
• Authors: Shimada, Hideki; Honda, Tomonori
• Is Part Of: Energy policy. Volume 168(2022)
• Publication Date: 2022-09
• Subjects: Renewable energy -- Feed-in tariff -- Microeconomics -- Intensive margin -- Observational data -- Survey data; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2022.113120
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: Enhancing residential solar photovoltaic adoption greatly contributes to the energy sector's decarbonization. However, even though expanding the capacity will increase the amount of solar-derived energy, little is known about what drives households' capacity choice. To bridge this knowledge gap, the current study utilizes revealed data provided by a Japanese solar photovoltaic installer on households' capacity choices and conducts a survey of households that have installed solar photovoltaic systems through diverse installers. The descriptive evidence shows that the Japanese feed-in tariff implemented in 2012 drastically expanded capacity per installation. The revealed data also record house attributes, meteorological information, and municipality demographic variables, on which we regress the solar photovoltaic capacity. We found that capacity is determined by the marginal cost and marginal benefit of installing an additional capacity. The survey results suggest that installers play a critical role in determining capacity through recommendations, once they gain households' trust. Thus, policy interventions that incentivize installers to expand capacity can enhance the generation of solar-derived energy. Highlights: Japanese feed-in tariff contributes to expanding residential solar photovoltaic capacity. Marginal cost and benefit are essential determinants of capacity per installation. Installers significantly influence households' capacity choice through recommendations. Most households choose the recommended capacity as they trust the installers.