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Sunspots That Matter: The Effect of Weather on Solar Technology Adoption

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  • Stefan Lamp

    (Universidad Carlos III Madrid)

Abstract

This paper tests for the presence of behavioral biases in household decisions to adopt solar photovoltaic installations using exogenous variation in weather. I find that residential technology uptake responds to exceptional weather, defined as deviations from the long-term mean, in line with the average time gap between decision-making and completion of the installation. In particular, a one standard deviation increase in sunshine hours during the purchase period leads to an approximate increase of 4.7% in weekly solar PV installations. This effect persists in aggregate data. I consider a range of potential mechanisms and find suggestive evidence for projection bias and salience as key drivers of my results.

Suggested Citation

  • Stefan Lamp, 2023. "Sunspots That Matter: The Effect of Weather on Solar Technology Adoption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 1179-1219, April.
    • Handle: RePEc:kap:enreec:v:84:y:2023:i:4:d:10.1007_s10640-022-00753-3
    DOI: 10.1007/s10640-022-00753-3
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    Cited by:

    1. Bonan, Jacopo & Cattaneo, Cristina & D'Adda, Giovanna & Tavoni, Massimo, 2023. "Daily Temperature and Sales of Energy-using Durables," RFF Working Paper Series 23-43, Resources for the Future.
    2. Sophie Clot & Gilles Grolleau & Lisette Ibanez, 2020. "Projection bias in environmental attitudes and behavioral intentions," CEE-M Working Papers hal-02874044, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    3. Clot, Sophie & Grolleau, Gilles & Ibanez, Lisette, 2022. "Projection bias in environmental beliefs and behavioural intentions - An application to solar panels and eco-friendly transport," Energy Policy, Elsevier, vol. 160(C).
    4. O'Shaughnessy, Eric, 2019. "Non-monotonic effects of market concentration on prices for residential solar photovoltaics in the United States," Energy Economics, Elsevier, vol. 78(C), pages 182-191.

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    More about this item

    Keywords

    Renewable energy; Solar photovoltaics; Projection bias; Salience; Energy policy; Technology diffusion;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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