Are policy incentives for solar power effective? Evidence from residential installations in the Northeast

Crago, Christine L.; Chernyakhovskiy, Ilya

doi:10.1016/j.jeem.2016.09.008

Cited by 146 publications

(83 citation statements)

References 28 publications

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“…Intuitively, it follows that localities that offer financial incentives experience increased rates of PV deployment, as confirmed by Jacobsson and Lauber (2006), Sarzynski et al (2012), and Crago and Chernyakhovskiy (2017).…”

Section: Introductionmentioning

confidence: 72%

Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling

Monaca¹,

Ryan

2017

Energy Policy

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Countries with low irradiation and solar PV adoption rates are increasingly considering policy support for solar PV, though consumer electricity demand and solar generation profiles are often mismatched. This paper presents a methodology for policy makers in countries with such conditions to examine more precisely the financial performance of residential solar PV from the consumer perspective as part of an ex-ante policy assessment. We model a range of prospective policy scenarios and compare policy mechanisms that compensate homeowners for generation, those that reduce their upfront costs, and those that assist with financing, using Ireland as a case study. The results confirm the intuitive notion that more generous financial remuneration schemes provide quicker payback, however, we observe that upfront grants do little to accelerate payback timeframes. We also show the importance of retail tariff structure in consumer payback for a solar PV system, with one-part tariffs generating shorter paybacks than two-part tariff structures, although the latter is more likely to secure revenue for electricity infrastructure investment. Drawing from this analysis, the paper proposes some options for the design of policy supports and tariff structures to deliver a sustainable residential renewable electricity system. IntroductionSolar photovoltaic (PV) technology has experienced a dramatic reduction in installed costs in recent years, falling more than 80% since 2008 (IRENA, 2015. As the technology becomes more competitive with conventional generation sources, deployment has increased sharply, reaching 177 MW total installed capacity worldwide in (REN21, 2015. The majority of deployment thus far has naturally been concentrated in locations with some combination of a strong solar resource or sufficiently generous policy supports, which in some cases have created windfall benefits for asset owners at high public cost, ultimately leading to unstable, 2 boom-and-bust market dynamics (De Boeck et al, 2016). As PV costs continue to fall, policymakers in countries with lower solar irradiation are also beginning to consider whether solar PV might be a viable renewable energy resource and worthy of policy support. In the development of such policies, these late-adopters have significant opportunity to avoid the mistakes of others in the design of policy support mechanisms and pricing through learning from other countries' experiences. Careful analysis is thus required to assess whether solar PV is an appropriate technology justifying policy support in such countries.In carrying out ex-ante solar PV policy assessment, policy makers should consider a range of key factors, including the system value of increasing the share of solar PV on the electricity system, the current and future economics of solar PV for different customers-residential, commercial, and utility-scale-and the environmental and other impacts of increased solar PV electricity generation. Of these, this paper focusses on the assessment of consumer economics ...

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Section: Introductionmentioning

confidence: 72%

Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling

Monaca¹,

Ryan

2017

Energy Policy

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“…Many past studies have investigated the driving factors and attitudes behind household adoption of low-carbon, pro-environmental energy items, especially PV (photovoltaic) units and EV (electric vehicles). Return-on-investment (ROI) and other financial factors have been shown to be important drivers of a household's choice to adopt PV (Crago and Chernyakhovskiy, 2017;Krasko and Doris, 2013;Haas et al, 1999). Not surprisingly, households also consider financial factors when deciding to purchase an EV (Sierzchula et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

Q-complementarity in household adoption of photovoltaics and electricity-intensive goods: The case of electric vehicles

et al. 2019

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Photovoltaic (PV) units and electric vehicles (EVs) are two household goods that are the focus of much research, and many policy initiatives attempting to promote a more sustainable, low-carbon energy system. Despite both academic and practical interest in household adoption of PV units and EVs, potential linkages in these household decisions have only just begun to be explored. This paper presents q-complementarity between the goods as one possible form of a linkage between PV and EV purchases that is based on economic utility theory.We posit the goods could be q-complements due to a PV-owning household's ability to offset and shift their electricity load from EV charging to increase the self-consumption of 'home-made' electricity, thereby increasing the positive feelings of environmental efficacy and monetary returns from the PV unit. We use data from 2,541 internet surveys of Austrian residential electricity customers collected in 2018 to explore these hypotheses. Probit models of household EV and PV adoption choice are estimated, including a recursive bivariate probit model of households who plan to purchase an EV in the future, with PV ownership endogenously determined. Controlling for household income, characteristics, environmental attitudes, and neighborhood characteristics, we find that EV and PV adoption are positively correlated, and that current PV unit owners are 18% more likely to plan an EV purchase in the next 5 years compared to non-PV owners. We interpret these results as evidence in support of our hypothesis of q-complementarity between PV units and EVs, and note the potential for added benefits from incentive policies promoting adoption of one good or the other that this linkage suggests.

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“…Regarding residents' installing rooftop solar PV generation facilities, Elnokaly et al [26] point out those government subsidies for residential solar energy can effectively encourage families to adopt this technology. Other studies show that tax rebate policies can also effectively increase the amount of residential solar PV power generations [27]. In summary, these studies indicate that government's subsidy policies have positive effects on the development of PV enterprises and residents' WTP for solar PV power generations.…”

Section: Introductionmentioning

confidence: 68%

“…Subsidies can be very costly [27,28] or regressive [29]. However, according to the current status of the economic development in China, residents are unlikely to pay for the high cost of solar PV equipment and the subsidy policy is effective only for a short period of time.…”

Section: Discussionmentioning

confidence: 99%

How Do Chinese Residents Expect of Government Subsidies on Solar Photovoltaic Power Generation?—A Case of Wuhan, China

2018

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This paper investigates local residents' expectations of the Chinese government subsidies on solar photovoltaic (PV) power generation. Residents' demographics including age, educational attainment, income level, gender, and employment fields are analyzed based on a survey study in Wuhan, China. Results of the regression analysis on the influence of demographic variables on residents' expectations indicate that: (1) residents with different demographics have significantly different expectations of the Chinese government subsidies for adopting PV power generation facilities; (2) income, education attainment, and residents' employment fields have a significant impact on their expectations of government subsidies. With these findings, this paper concludes with useful policy implications.

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Are policy incentives for solar power effective? Evidence from residential installations in the Northeast

Cited by 146 publications

References 28 publications

Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling

Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling

Q-complementarity in household adoption of photovoltaics and electricity-intensive goods: The case of electric vehicles

How Do Chinese Residents Expect of Government Subsidies on Solar Photovoltaic Power Generation?—A Case of Wuhan, China

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