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Cost, Contractors and Scale: An Empirical Analysis of the California Solar Market

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  • Johannes Mauritzen

Abstract

ABSTRACT This paper presents an empirical analysis of the rapidly growing California rooftop solar photovoltaic market using detailed data of over 100,000 solar installations between 2007 and 2014. The rapid fall in the cost of solar panels stand central in the expansion of this market. I use a semi-parametric regression model to aid identification of cost factors by decomposing time-varying and cross-sectional components. I find that the use of Chinese manufactured panels are associated with costs that are 6% lower. Economies of scale at the local level (number of yearly installations in a zip code) and at the installation level (size of the installation) are also associated with lower costs. Higher subsidies, and higher contractor market-share are associated with higher costs. I use an exploratory analysis of the dominant contractor, SolarCity, to discuss non-cost factors in the expansion of the solar photovoltaic market.

Suggested Citation

  • Johannes Mauritzen, 2017. "Cost, Contractors and Scale: An Empirical Analysis of the California Solar Market," The Energy Journal, , vol. 38(6), pages 177-197, November.
    • Handle: RePEc:sae:enejou:v:38:y:2017:i:6:p:177-197
    DOI: 10.5547/01956574.38.6.jmau
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    References listed on IDEAS

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    1. Jonathan E. Hughes & Molly Podolefsky, 2015. "Getting Green with Solar Subsidies: Evidence from the California Solar Initiative," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(2), pages 235-275.
    2. Simon N. Wood, 2011. "Fast stable restricted maximum likelihood and marginal likelihood estimation of semiparametric generalized linear models," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 73(1), pages 3-36, January.
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