The rooftop solar market in the US, and especially in California, has experienced explosive growth in the last decade. At least in part this growth can be attributed to the government incentive programs, which effectively reduce the system costs. One of the most aggressive incentive programs is the California Solar Initiative (CSI), a rooftop solar subsidy program initiated in 2007 with the goal of creating 1,940 megawatts of solar capacity by 2016.
The CSI program has been touted as a great success, and it certainly seems so: over 2,000 megawatts have been installed to date. But how much of this success can be attributed solely to the CSI program, as opposed to other variables that might impact rooftop solar adoption?
Using a novel modeling approach, a recent working paper examined the CSI program and alternative incentive programs in San Diego County, and found that the impact of demand-side incentives, such as the CSI program, on adoption is much weaker than previously suggested. Two reasons appear to account for it: first, the economic factors have a relatively small impact on adoption tendencies, and second, incentives are not passed through to leasers. In other words, economic incentives don’t seem to have a significant impact on people’s decisions to buy solar, and appear to have virtually no impact on their decision to lease.
What is your view on the value and importance of government incentives for solar power?
While the CSI program may not have been very successful in encouraging additional solar adoption, there is no question that incentives can play a big role in spurring solar (and… Read more »
Agent based models such as the one used in this study have the potential to give a more realistic picture of what’s going on. The conclusion of the study implies… Read more »
Lewis: Are you saying that it is possible that Germany might have achieved its current level of renewables penetration without its feed-in tariff and other incentives?
Dan, I thought what I said was rather clear. A similar study of Germany might produce similarly surprising insights. Or maybe not. I’d like to see the research done. As… Read more »
Lewis: While the studies you suggest are being done, the economic (and societal) impacts of the status quo fossil fuel power generation should be studied as well. Studies so far… Read more »
Dan, the AEA paper you cite assesses the measurable impact of pollutants such as particulates, SO2, and four others. It does not address greenhouse gases, whose effects are speculative. Those… Read more »
Lewis: Yes, I know that AEA study does not include climate impacts. Those are on top of the health and other negative impacts, so the total external costs are even… Read more »
I think it’s important to remember that there are many qualitative differences between the German experience and CSI. One important difference is the importance of the leasing market in CA.… Read more »
It should also be noted that solar (and other renewables) compete against fossil fuel energy which is subsidized by not including the external costs that fossil fuel emissions impose on… Read more »
From the Sales side … they say that the best marketing vehicle is your neighbor’s installation! However, I am curious as to why you chose San Diego. They have been… Read more »
Our choice of San Diego county was primarily driven by data considerations: we had great individual-level data for San Diego that we could use for model calibration.
Here is the link for the story about San Diego …
Do you think the solar charge and the community fight might have skewed your data?
http://www.renewableenergyworld.com/rea/blog/post/2014/11/same-price-more-renewables-san-diegos-fight-for-community-controlled-energy?cmpid=SolarNL-Tuesday-November11-2014
It seems unlikely that it did, particularly because it was never implemented.
It appears that incentives do have an impact on deployment, at least in Germany: “Germany’s photovoltaic expansion has come to a virtual standstill after the Renewable Energy Act (EEG) amendment… Read more »
Teasing out relative impacts is certainly a fun and challenging exercise. Without looking at this methodology and assumptions, my experience suggests interactive effects are key in emerging technologies: policy, markets,… Read more »
The time range of our analysis was 2007-2013, so temporal evolution is certainly captured (at monthly granularity), although one could certainly argue that trends would be different over a longer… Read more »
Do you think the relatively little uptake of residential solar in TX versus two of the highest states – CA and NJ; is largely explainable by lower electricity rates in… Read more »
There certainly seems good reason to believe that lower electricity rates will dull incentives to adopt; maybe just as important is the degree of volatility in electricity rates, as well… Read more »