IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v161y2022ics0301421521005929.html
   My bibliography  Save this article

Hide and seek: The supply and demand of information for household solar photovoltaic investment

Author

Listed:
  • Sommerfeldt, Nelson
  • Lemoine, Ida
  • Madani, Hatef

Abstract

Buildings provide an ideal platform for solar photovoltaics (PV) towards sustainable development goals, and the decision to invest in PV lies predominantly with building owners. Information delivery is critical for the diffusion of innovations, and this study aims to improve the quality of information for household PV investors in Sweden. A User Journey Mapping approach is applied with a combination of semi-structured interviews and a review of online solar calculators. The results show that despite a rapid growth in the quantity of information there is still a gap between demand and supply due to the lack of clarity and trustworthiness of information. This is clearly demonstrated in the review of online calculators, which show a high variance in results. Payback time, for example, ranged from 7 to 18 years for a single test case. The information gap can be closed by creating neutral, non-commercial online information sources that focus on transparency and education where household investors can validate supplier offers and analyses. The PV industry risks eroding trust in the market, which will likely slow adoption by the early majority and hinder sustainability goals.

Suggested Citation

  • Sommerfeldt, Nelson & Lemoine, Ida & Madani, Hatef, 2022. "Hide and seek: The supply and demand of information for household solar photovoltaic investment," Energy Policy, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:enepol:v:161:y:2022:i:c:s0301421521005929
    DOI: 10.1016/j.enpol.2021.112726
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421521005929
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112726?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    3. Lucas W. Davis & Gilbert E. Metcalf, 2016. "Does Better Information Lead to Better Choices? Evidence from Energy-Efficiency Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 589-625.
    4. Loewenstein, George & Chater, Nick, 2017. "Putting nudges in perspective," Behavioural Public Policy, Cambridge University Press, vol. 1(1), pages 26-53, May.
    5. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
    6. Deng, Gary & Newton, Peter, 2017. "Assessing the impact of solar PV on domestic electricity consumption: Exploring the prospect of rebound effects," Energy Policy, Elsevier, vol. 110(C), pages 313-324.
    7. Ansar, Jasmin & Sparks, Roger, 2009. "The experience curve, option value, and the energy paradox," Energy Policy, Elsevier, vol. 37(3), pages 1012-1020, March.
    8. Rommel, Jens & Sagebiel, Julian & Müller, Jakob R., 2016. "Quality uncertainty and the market for renewable energy: Evidence from German consumers," Renewable Energy, Elsevier, vol. 94(C), pages 106-113.
    9. Tanaka, Kenta & Sekito, Mai & Managi, Shunsuke & Kaneko, Shinji & Rai, Varun, 2017. "Decision-making governance for purchases of solar photovoltaic systems in Japan," Energy Policy, Elsevier, vol. 111(C), pages 75-84.
    10. Khosrowpour, Ardalan & Xie, Yimeng & Taylor, John E. & Hong, Yili, 2016. "One size does not fit all: Establishing the need for targeted eco-feedback," Applied Energy, Elsevier, vol. 184(C), pages 523-530.
    11. Henry Muyingo, 2015. "Organizational Challenges in the Adoption of Building Applied Photovoltaics in the Swedish Tenant-Owner Housing Sector," Sustainability, MDPI, vol. 7(4), pages 1-28, March.
    12. Hunt Allcott & Michael Greenstone, 2012. "Is There an Energy Efficiency Gap?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 3-28, Winter.
    13. Drury, Easan & Miller, Mackay & Macal, Charles M. & Graziano, Diane J. & Heimiller, Donna & Ozik, Jonathan & Perry IV, Thomas D., 2012. "The transformation of southern California's residential photovoltaics market through third-party ownership," Energy Policy, Elsevier, vol. 42(C), pages 681-690.
    14. Richard G. Newell & Juha Siikamäki, 2014. "Nudging Energy Efficiency Behavior: The Role of Information Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 555-598.
    15. Collins, Matthew & Curtis, John, 2017. "Identification of the information gap in residential energy efficiency: How information asymmetry can be mitigated to induce energy efficiency renovations," Papers WP558, Economic and Social Research Institute (ESRI).
    16. Greene, David L., 2011. "Uncertainty, loss aversion, and markets for energy efficiency," Energy Economics, Elsevier, vol. 33(4), pages 608-616, July.
    17. Qiu, Yueming & Kahn, Matthew E. & Xing, Bo, 2019. "Quantifying the rebound effects of residential solar panel adoption," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 310-341.
    18. B. Howarth, Richard & Haddad, Brent M. & Paton, Bruce, 2000. "The economics of energy efficiency: insights from voluntary participation programs," Energy Policy, Elsevier, vol. 28(6-7), pages 477-486, June.
    19. Kowalska-Pyzalska, Anna, 2018. "What makes consumers adopt to innovative energy services in the energy market? A review of incentives and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3570-3581.
    20. Mauritzen, Johannes, 2020. "Are solar panels commodities? A Bayesian hierarchical approach to detecting quality differences and asymmetric information," European Journal of Operational Research, Elsevier, vol. 280(1), pages 365-382.
    21. Palm, Jenny, 2018. "Household installation of solar panels – Motives and barriers in a 10-year perspective," Energy Policy, Elsevier, vol. 113(C), pages 1-8.
    22. Fabian Scheller & Isabel Doser & Daniel Sloot & Russell McKenna & Thomas Bruckner, 2020. "Exploring the Role of Stakeholder Dynamics in Residential Photovoltaic Adoption Decisions: A Synthesis of the Literature," Energies, MDPI, vol. 13(23), pages 1-31, November.
    23. Bauner, Christoph & Crago, Christine L., 2015. "Adoption of residential solar power under uncertainty: Implications for renewable energy incentives," Energy Policy, Elsevier, vol. 86(C), pages 27-35.
    24. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    25. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy paradox and the diffusion of conservation technology," Resource and Energy Economics, Elsevier, vol. 16(2), pages 91-122, May.
    26. Dong, Changgui & Sigrin, Benjamin, 2019. "Using willingness to pay to forecast the adoption of solar photovoltaics: A “parameterization + calibration” approach," Energy Policy, Elsevier, vol. 129(C), pages 100-110.
    27. Bryan Bollinger & Kenneth Gillingham, 2012. "Peer Effects in the Diffusion of Solar Photovoltaic Panels," Marketing Science, INFORMS, vol. 31(6), pages 900-912, November.
    28. Sommerfeld, Jeff & Buys, Laurie & Vine, Desley, 2017. "Residential consumers’ experiences in the adoption and use of solar PV," Energy Policy, Elsevier, vol. 105(C), pages 10-16.
    29. Wilson, C. & Pettifor, H. & Chryssochoidis, G., 2018. "Quantitative modelling of why and how homeowners decide to renovate energy efficiently," Applied Energy, Elsevier, vol. 212(C), pages 1333-1344.
    30. Juntunen, Jouni K. & Martiskainen, Mari, 2021. "Improving understanding of energy autonomy: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    31. Daan van Soest & Erwin Bulte, 2001. "Does the Energy-Efficiency Paradox Exist? Technological Progress and Uncertainty," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 101-112, January.
    32. Rai, Varun & Reeves, D. Cale & Margolis, Robert, 2016. "Overcoming barriers and uncertainties in the adoption of residential solar PV," Renewable Energy, Elsevier, vol. 89(C), pages 498-505.
    33. Eric O’Shaughnessy & Galen Barbose & Ryan Wiser & Sydney Forrester & Naïm Darghouth, 2021. "The impact of policies and business models on income equity in rooftop solar adoption," Nature Energy, Nature, vol. 6(1), pages 84-91, January.
    34. Howarth, Richard B. & Andersson, Bo, 1993. "Market barriers to energy efficiency," Energy Economics, Elsevier, vol. 15(4), pages 262-272, October.
    35. Rommel, Kai & Sagebiel, Julian, 2017. "Preferences for micro-cogeneration in Germany: Policy implications for grid expansion from a discrete choice experiment," Applied Energy, Elsevier, vol. 206(C), pages 612-622.
    36. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    37. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
    38. Hassett, Kevin A. & Metcalf, Gilbert E., 1993. "Energy conservation investment : Do consumers discount the future correctly?," Energy Policy, Elsevier, vol. 21(6), pages 710-716, June.
    39. Korcaj, Liridon & Hahnel, Ulf J.J. & Spada, Hans, 2015. "Intentions to adopt photovoltaic systems depend on homeowners' expected personal gains and behavior of peers," Renewable Energy, Elsevier, vol. 75(C), pages 407-415.
    40. Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part two - Application," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1394-1404.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Troy Malatesta & Gregory M. Morrison & Jessica K. Breadsell & Christine Eon, 2023. "A Systematic Literature Review of the Interplay between Renewable Energy Systems and Occupant Practices," Sustainability, MDPI, vol. 15(12), pages 1-27, June.
    2. Eslami, Hossein & Krishnan, Trichy, 2023. "New sustainable product adoption: The role of economic and social factors," Energy Policy, Elsevier, vol. 183(C).
    3. Aloysius Sam & Michael Karikari Appiah & Elikplim Ameko & Beverly Akomea Bonsu, 2024. "Smart Initiatives to Drive Solar Energy Investments under Environmental Uncertainty: Exploring Linear and Quadratic Relationships," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 550-561, July.
    4. Rydehell, Hanna & Lantz, Björn & Mignon, Ingrid & Lindahl, Johan, 2024. "The impact of solar PV subsidies on investment over time - the case of Sweden," Energy Economics, Elsevier, vol. 133(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    2. Häckel, Björn & Pfosser, Stefan & Tränkler, Timm, 2017. "Explaining the energy efficiency gap - Expected Utility Theory versus Cumulative Prospect Theory," Energy Policy, Elsevier, vol. 111(C), pages 414-426.
    3. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    4. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    5. Schleich, Joachim & Gassmann, Xavier & Faure, Corinne & Meissner, Thomas, 2016. "Making the implicit explicit: A look inside the implicit discount rate," Energy Policy, Elsevier, vol. 97(C), pages 321-331.
    6. Li, Jia & Just, Richard E., 2018. "Modeling household energy consumption and adoption of energy efficient technology," Energy Economics, Elsevier, vol. 72(C), pages 404-415.
    7. Rockstuhl, Sebastian & Wenninger, Simon & Wiethe, Christian & Häckel, Björn, 2021. "Understanding the risk perception of energy efficiency investments: Investment perspective vs. energy bill perspective," Energy Policy, Elsevier, vol. 159(C).
    8. Bishop, Kelly C. & Kiribrahim-Sarikaya, Ozgen, 2024. "Energy-efficient investments in housing," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    9. Ramos, A. & Gago, A. & Labandeira, X. & Linares, P., 2015. "The role of information for energy efficiency in the residential sector," Energy Economics, Elsevier, vol. 52(S1), pages 17-29.
    10. Henningsen, Geraldine & Wiese, Catharina, 2019. "Do Household Characteristics Really Matter? A Meta-Analysis on the Determinants of Households’ Energy-Efficiency Investments," MPRA Paper 101701, University Library of Munich, Germany.
    11. Alipour, M. & Salim, H. & Stewart, Rodney A. & Sahin, Oz, 2020. "Predictors, taxonomy of predictors, and correlations of predictors with the decision behaviour of residential solar photovoltaics adoption: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    12. Heather Klemick & Elizabeth Kopits & Keith Sargent & Ann Wolverton, 2014. "Heavy-Duty Trucks and the Energy Efficiency Paradox," NCEE Working Paper Series 201402, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2014.
    13. Fabian Scheller & Isabel Doser & Emily Schulte & Simon Johanning & Russell McKenna & Thomas Bruckner, 2021. "Stakeholder dynamics in residential solar energy adoption: findings from focus group discussions in Germany," Papers 2104.14240, arXiv.org.
    14. Brucal, Arlan & Roberts, Michael J., 2019. "Do energy efficiency standards hurt consumers? Evidence from household appliance sales," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 88-107.
    15. Sahari, Anna, 2019. "Electricity prices and consumers’ long-term technology choices: Evidence from heating investments," European Economic Review, Elsevier, vol. 114(C), pages 19-53.
    16. Louis-Gaëtan Giraudet & S. Houde, 2013. "Double moral hazard and the energy efficiency gap," Post-Print hal-00799725, HAL.
    17. Basher, Syed Abul & Raboy, David G., 2018. "The misuse of net present value in energy efficiency standards," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 218-225.
    18. Burlinson, Andrew & Giulietti, Monica & Battisti, Giuliana, 2018. "Technology adoption, consumer inattention and heuristic decision-making: Evidence from a UK district heating scheme," Research Policy, Elsevier, vol. 47(10), pages 1873-1886.
    19. Palm, A., 2020. "Early adopters and their motives: Differences between earlier and later adopters of residential solar photovoltaics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    20. Samdruk Dharshing & Stefanie Lena Hille, 2017. "The Energy Paradox Revisited: Analyzing the Role of Individual Differences and Framing Effects in Information Perception," Journal of Consumer Policy, Springer, vol. 40(4), pages 485-508, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:161:y:2022:i:c:s0301421521005929. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.