3077176033_fd6edaa1f0_zThe 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?

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