Jun 12, 2013
Trusted solar-panel information cuts decision times
Householders considering solar panels make their decision more quickly if they talk to neighbours who have already installed the technology. That’s according to a study by US scientists in Environmental Research Letters (ERL).
“Diffusion of consumer technologies like solar photovoltaics (PV) is a function of the system cost and the cost of information to consumers,” Varun Rai of the University of Texas at Austin tells environmentalresearchweb. “Consumers must gather large amounts of information and make comparisons to alternative investment options before making a decision – the information cost to customers is typically quite significant.”
Rai and colleague Scott Robinson found that information from neighbours helped cut decision times by an average of 4.6 months. To obtain this result, they conducted an online survey from August to November 2011, contacting 922 Texan residents who had adopted solar panels. A total of 365 residents responded in full – roughly 20% of residential PV adopters. The average decision period was 8.9 months.
“This … uniquely rich dataset allowed us to open the ‘black box’ of how peer effects actually operate at the neighbourhood level,” says Rai.
The presence of PV systems nearby has a passive effect on householders, the researchers believe, as well as an active one through peer-to-peer communications. The researchers calculated that the combination of passive and active peer effects takes 6.67 months off the decision time.
“PV owners gain confidence and motivation from seeing other systems around them, and make faster decisions when they are able to contact other owners,” says Rai. “Using these insights, we propose a new framework to provide public information on PV that could drastically reduce barriers to PV adoption, thereby accelerating its market penetration and environmental benefits. This framework could also serve as a model for other distributed generation technologies.”
Adoption of photovoltaics in the residential sector is currently below 2% of the market potential, according to the US Department of Energy. Rai and Robinson reckon that there could be significant value in designing incentive structures and a communication platform, such as an online social platform, for PV that facilitates peer effects. Many survey respondents expressed a desire for a centralized, independent information source hosted by government or electric utilities.
“Existing PV owners could share their PV ownership experience and potential adopters would be able to connect with the owners in their neighbourhood or community,” says Rai. “By increasing peer-to-peer interaction, this initiative has the potential to decrease individual decision times by about two-thirds. Such an initiative would be relatively low-cost and would likely enable accelerated growth in the PV market, reducing the burden of support on the government as the residential PV industry expands.”
Monetary factors were also important. Respondents who said that their evaluation of solar as a financial investment was 'very' or 'extremely' important took 2.7 months longer to decide, on average. Similarly, those leasing a system decided faster than those buying one.
Information could provide significant positive-feedback loops, according to Rai. “As more households install solar PV, other neighbours can access information from them (or non-neighbourhood PV adopters), decreasing the risk they face in adopting the technology,” he says. “This is particularly important given the capital-intensive and long lifetime – 25+ years – nature of PV.”
The team is now designing a web-based platform that will allow them to examine peer effects and associated social-networks experimentally, and building an agent-based model that simulates patterns of PV adoption at the city level in response to different policy and utility programme initiatives.
- Effective information channels for reducing costs of environmentally- friendly technologies: evidence from residential PV markets Varun Rai and Scott A Robinson 2013 Environ. Res. Lett. 8 014044
- Varun Rai
About the author
Liz Kalaugher is editor of environmentalresearchweb.