Incentive Pass-through for Residential Solar Systems in California

Deconstructing Solar Photovoltaic Pricing: The Role of Market Structure, Technology, and Policy

“…Alternatively, the results may be a symptom of high information search costs or otherwise imperfect competition, whereby installers in these markets are able to "value price" their systems, effectively retaining some portion of the incentive offered. In this sense, the finding may be related to the burgeoning literature on PV system incentive pass-through (Dong et al 2014, Henwood 2014, Hughes and Podolefsky 2014.…”

“…In addition, policy actions may influence the price, such as efforts to reduce interconnection costs. The effect of incentive policies on the equilibrium price depends in part on pass-through, a topic examined in several recent papers (Dong et al 2014, Henwood 2014, Hughes and Podolefsky 2014.…”

Value Accrual to Customers, Installers, and Financiers in Third-Party Owned Solar PV Markets

“…Value pass-through has been studied primarily in the context of customer-owned PV systems (Dong, Wiser, and Rai 2014;Gillingham et al 2016;Nemet et al 2016), though some recent attention has been paid to third-party owned (TPO) systems (Pless and van Benthem 2017). In the TPO model, an installer sells a customer-sited PV system to a third-party financier, who then sells the power produced by the system to the customer.…”

“…2 Because most U.S. residential PV has received at least some financial incentives, pass-through of incentives to the consumer in the form of reduced prices is important for understanding the efficacy of public expenditures and the strategies of PV installers and financiers. Dong, Wiser, and Rai (2014) find that installers passed through nearly all the value of rebates offered by the State of California to consumers in the form of lower prices, though only host-owned systems were considered. In the study most similar to ours, Pless and van Benthem (2017) find similar results for host-owned systems, but they find that TPO systems passed through greater than 100% of the financial value of rebates.…”