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

Abstract

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.

Rebound and Spillovers: Prosumers in Transition

“…Many households have already combined their PV with further technologies or have thought a lot about how to do so in the future. To some extent this resonates with the finding of Cohen et al ( 2019 ) as there appears to be “q-complementarity” between investment in PV and in certain other electrical goods. Q-complementarity is said to occur when the welfare gain from adopting one good is increased by the welfare gain from adopting another good and vice versa.…”

Choosing the Electric Car

“…As noted, EVs may be increasingly considered as being a part of the residential energy management. In line with this, and related to positive spillover, Cohen et al (2019) found that adoption of EVs and adoption of a photovoltaics were positively correlated and, compared to those who did not own photovoltaics, those who owned photovoltaics were 21% more likely have plans to purchase an EV in the next five years. As such, the authors of the study argue that photovoltaics and EV technologies are q-complementary, which is the perceived benefits of one are (perceived to) increase with the adoption another.…”

Modelling interest in co-adoption of electric vehicles and solar photovoltaics in Australia to identify tailored policy needs

“…Finally, as expected, households that own electricity-intensive appliances, such as swimming pools and three or more refrigerators, are more likely to only adopt PV. This is probably because they can increase the self-consumption of produced solar energy 29 . In addition to increasing the probability of adopting only PV, having a swimming pool also increases the probability of adopting both PV and EV, while having three or more refrigerators has an insignificant but positive effect on adopting both technologies.…”

“…High residential electricity consumption, which correlates with increased electricity bills, has also been identified as a crucial determinant for PV adoption in studies by Best et al 26 and Cohen et al 29 . These studies reveal that factors such as the size of the house, number of household members, and ownership of electricity-intensive appliances serve as strong predictors of PV ownership.…”

“…They also identified a growth in this correlation over time. In a study conducted in Austria, Cohen et al 29 extended the investigation on the relationship between PV and EV adoption by considering one technology as an exogenous predictor of the other. The findings revealed a robust correlation, indicating a 31% higher likelihood of owning a PV if an EV is also owned, and a 7.1% higher likelihood of owning an EV if a PV is owned.…”