IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v112y2022ics0140988322002833.html
   My bibliography  Save this article

The impact of income on household solar panel uptake: Exploring diverse results using Australian data

Author

Listed:
  • Best, Rohan
  • Chareunsy, Andrea

Abstract

Understanding mixed results for the impact of income on household solar-panel uptake is important for several reasons. Income is often a central feature of economic studies or a key control for social studies. Furthermore, policy makers are increasingly relying on income to determine solar-subsidy eligibility. We use a large sample of Australian households to suggest reasons for mixed results. For a comparative purpose, we show a negative relationship between income and solar-panel uptake for a regression with 318 observations, where these observations are area-aggregated averages of underlying household-level survey data. A similar model with 31,828 household observations from the same household-level survey data suggests a positive relationship. This gradually disappears when adding key controls. When assessing possible non-linearity, we find a negative association between income and solar-panel uptake at high-income levels. Interestingly, this is primarily true for higher-wealth households. Our analysis suggests an important shift in solar policies is needed – from a singular focus on income toward wealth or dual income-wealth thresholds.

Suggested Citation

  • Best, Rohan & Chareunsy, Andrea, 2022. "The impact of income on household solar panel uptake: Exploring diverse results using Australian data," Energy Economics, Elsevier, vol. 112(C).
  • Handle: RePEc:eee:eneeco:v:112:y:2022:i:c:s0140988322002833
    DOI: 10.1016/j.eneco.2022.106124
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988322002833
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2022.106124?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. Matto Mildenberger & Peter D. Howe & Chris Miljanich, 2019. "Households with solar installations are ideologically diverse and more politically active than their neighbours," Nature Energy, Nature, vol. 4(12), pages 1033-1039, December.
    2. Escoffier, Margaux & Hache, Emmanuel & Mignon, Valérie & Paris, Anthony, 2021. "Determinants of solar photovoltaic deployment in the electricity mix: Do oil prices really matter?," Energy Economics, Elsevier, vol. 97(C).
    3. 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.
    4. Zander, Kerstin K., 2020. "Unrealised opportunities for residential solar panels in Australia," Energy Policy, Elsevier, vol. 142(C).
    5. Brett Baden & Douglas Noonan & Rama Mohana Turaga, 2007. "Scales of justice: Is there a geographic bias in environmental equity analysis?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 50(2), pages 163-185.
    6. Marcello Graziano & Kenneth Gillingham, 2015. "Spatial patterns of solar photovoltaic system adoption: The influence of neighbors and the built environment," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 815-839.
    7. Best, Rohan & Chareunsy, Andrea & Li, Han, 2021. "Equity and effectiveness of Australian small-scale solar schemes," Ecological Economics, Elsevier, vol. 180(C).
    8. Sven Müller & Johannes Rode, 2013. "The adoption of photovoltaic systems in Wiesbaden, Germany," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(5), pages 519-535, July.
    9. Jean-François Maystadt & Giacomo De Luca & Petros G. Sekeris & John Ulimwengu, 2014. "Mineral resources and conflicts in DRC: a case of ecological fallacy?," Oxford Economic Papers, Oxford University Press, vol. 66(3), pages 721-749.
    10. 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).
    11. Oleg Kucher & Donald Lacombe & Sean T. Davidson, 2021. "The Residential Solar PV in the Mid-Atlantic: A Spatial Panel Approach," International Regional Science Review, , vol. 44(2), pages 262-288, March.
    12. Jacksohn, Anke & Grösche, Peter & Rehdanz, Katrin & Schröder, Carsten, 2019. "Drivers of renewable technology adoption in the household sector," Energy Economics, Elsevier, vol. 81(C), pages 216-226.
    13. Kwan, Calvin Lee, 2012. "Influence of local environmental, social, economic and political variables on the spatial distribution of residential solar PV arrays across the United States," Energy Policy, Elsevier, vol. 47(C), pages 332-344.
    14. Best, Rohan & Burke, Paul J. & Nishitateno, Shuhei, 2019. "Evaluating the effectiveness of Australia's Small-scale Renewable Energy Scheme for rooftop solar," Energy Economics, Elsevier, vol. 84(C).
    15. Irfan, Mohd & Yadav, Sarvendra & Shaw, Krishnendu, 2021. "The adoption of solar photovoltaic technology among Indian households: Examining the influence of entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    16. Kurdgelashvili, Lado & Shih, Cheng-Hao & Yang, Fan & Garg, Mehul, 2019. "An empirical analysis of county-level residential PV adoption in California," Technological Forecasting and Social Change, Elsevier, vol. 139(C), pages 321-333.
    17. Rode, Johannes & Weber, Alexander, 2016. "Does localized imitation drive technology adoption? A case study on rooftop photovoltaic systems in Germany," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 38-48.
    18. Greenwood, Peter H. & Luloff, A. E., 1979. "Inadvertent Social Theory: Aggregation And Its Effect On Community Research," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 8(1), pages 1-4, April.
    19. 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.
    20. Rohan Best & Paul J. Burke & Shuhei Nishitateno, 2019. "Understanding the determinants of rooftop solar installation: evidence from household surveys in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), pages 922-939, October.
    21. Willis, Ken & Scarpa, Riccardo & Gilroy, Rose & Hamza, Neveen, 2011. "Renewable energy adoption in an ageing population: Heterogeneity in preferences for micro-generation technology adoption," Energy Policy, Elsevier, vol. 39(10), pages 6021-6029, October.
    22. De Groote, Olivier & Pepermans, Guido & Verboven, Frank, 2016. "Heterogeneity in the adoption of photovoltaic systems in Flanders," Energy Economics, Elsevier, vol. 59(C), pages 45-57.
    23. White, Lee V., 2019. "Increasing residential solar installations in California: Have local permitting processes historically driven differences between cities?," Energy Policy, Elsevier, vol. 124(C), pages 46-53.
    24. Crago, Christine Lasco & Chernyakhovskiy, Ilya, 2017. "Are policy incentives for solar power effective? Evidence from residential installations in the Northeast," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 132-151.
    25. Schwartz, S., 1994. "The fallacy of the ecological fallacy: The potential misuse of a concept and the consequences," American Journal of Public Health, American Public Health Association, vol. 84(5), pages 819-824.
    26. Bashiri, Ali & Alizadeh, Sasan H., 2018. "The analysis of demographics, environmental and knowledge factors affecting prospective residential PV system adoption: A study in Tehran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 3131-3139.
    27. Dastrup, Samuel R. & Graff Zivin, Joshua & Costa, Dora L. & Kahn, Matthew E., 2012. "Understanding the Solar Home price premium: Electricity generation and “Green” social status," European Economic Review, Elsevier, vol. 56(5), pages 961-973.
    28. Rohan Best & Paul J. Burke & Rabindra Nepal & Zac Reynolds, 2021. "Effects of rooftop solar on housing prices in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 493-511, July.
    29. Deborah A. Sunter & Sergio Castellanos & Daniel M. Kammen, 2019. "Disparities in rooftop photovoltaics deployment in the United States by race and ethnicity," Nature Sustainability, Nature, vol. 2(1), pages 71-76, January.
    30. Balta-Ozkan, Nazmiye & Yildirim, Julide & Connor, Peter M. & Truckell, Ian & Hart, Phil, 2021. "Energy transition at local level: Analyzing the role of peer effects and socio-economic factors on UK solar photovoltaic deployment," Energy Policy, Elsevier, vol. 148(PB).
    31. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    32. Bondio, Steven & Shahnazari, Mahdi & McHugh, Adam, 2018. "The technology of the middle class: Understanding the fulfilment of adoption intentions in Queensland's rapid uptake residential solar photovoltaics market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 642-651.
    33. Rode, Johannes & Weber, Alexander, 2016. "Does localized imitation drive technology adoption? A case study on rooftop photovoltaic systems in Germany," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 38-48.
    34. Alipour, M. & Salim, H. & Stewart, Rodney A. & Sahin, Oz, 2021. "Residential solar photovoltaic adoption behaviour: End-to-end review of theories, methods and approaches," Renewable Energy, Elsevier, vol. 170(C), pages 471-486.
    35. Spencer Banzhaf & Lala Ma & Christopher Timmins, 2019. "Environmental Justice: The Economics of Race, Place, and Pollution," Journal of Economic Perspectives, American Economic Association, vol. 33(1), pages 185-208, Winter.
    36. 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).
    37. Michelle Graff & Sanya Carley, 2020. "COVID-19 assistance needs to target energy insecurity," Nature Energy, Nature, vol. 5(5), pages 352-354, May.
    38. Bryan Bollinger & Kenneth Gillingham, 2012. "Peer Effects in the Diffusion of Solar Photovoltaic Panels," Marketing Science, INFORMS, vol. 31(6), pages 900-912, November.
    39. Petrovich, Beatrice & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2019. "Beauty and the budget: A segmentation of residential solar adopters," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    40. Chelsea Schelly & James C. Letzelter, 2020. "Examining the Key Drivers of Residential Solar Adoption in Upstate New York," Sustainability, MDPI, vol. 12(6), pages 1-13, March.
    41. Islam, Towhidul & Meade, Nigel, 2013. "The impact of attribute preferences on adoption timing: The case of photo-voltaic (PV) solar cells for household electricity generation," Energy Policy, Elsevier, vol. 55(C), pages 521-530.
    42. Greenwood, Peter H. & Luloff, A. E., 1979. "Inadvertent Social Theory: Aggregation And Its Effect On Community Research," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 1), pages 1-4, April.
    Full references (including those not matched with items on IDEAS)

    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. Best, Rohan & Li, Han & Trück, Stefan & Truong, Chi, 2021. "Actual uptake of home batteries: The key roles of capital and policy," Energy Policy, Elsevier, vol. 151(C).
    2. Best, Rohan, 2022. "Energy inequity variation across contexts," Applied Energy, Elsevier, vol. 309(C).
    3. Bruno Moreno Rodrigo de Freitas, 2020. "Quantifying the effect of regulated volumetric electriciy tariffs on residential PV adoption under net metering scheme," Working papers of CATT hal-02976874, HAL.
    4. Emily Schulte & Fabian Scheller & Daniel Sloot & Thomas Bruckner, 2021. "A meta-analysis of residential PV adoption: the important role of perceived benefits, intentions and antecedents in solar energy acceptance," Papers 2112.12464, arXiv.org.
    5. 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).
    6. Bruno Moreno Rodrigo de Freitas, 2020. "Quantifying the effect of regulated volumetric electriciy tariffs on residential PV adoption under net metering scheme," Working Papers hal-02976874, HAL.
    7. Arnold, Fabian & Jeddi, Samir & Sitzmann, Amelie, 2022. "How prices guide investment decisions under net purchasing — An empirical analysis on the impact of network tariffs on residential PV," Energy Economics, Elsevier, vol. 112(C).
    8. 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.
    9. Esplin, Ryan & Nelson, Tim, 2022. "Redirecting solar feed in tariffs to residential battery storage: Would it be worth it?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 373-389.
    10. Zander, Kerstin K., 2020. "Unrealised opportunities for residential solar panels in Australia," Energy Policy, Elsevier, vol. 142(C).
    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. Simshauser, P. & Nelson, T. & Gilmore, J., 2023. "The sunshine state: implications from mass rooftop solar PV take-up rates in Queensland," Cambridge Working Papers in Economics 2305, Faculty of Economics, University of Cambridge.
    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. Moon-Hyun Kim & Tae-Hyoung Tommy Gim, 2021. "Spatial Characteristics of the Diffusion of Residential Solar Photovoltaics in Urban Areas: A Case of Seoul, South Korea," IJERPH, MDPI, vol. 18(2), pages 1-16, January.
    15. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    16. Balta-Ozkan, Nazmiye & Yildirim, Julide & Connor, Peter M. & Truckell, Ian & Hart, Phil, 2021. "Energy transition at local level: Analyzing the role of peer effects and socio-economic factors on UK solar photovoltaic deployment," Energy Policy, Elsevier, vol. 148(PB).
    17. Germeshausen, Robert, 2016. "Effects of Attribute-Based Regulation on Technology Adoption - The Case of Feed-In Tariffs for Solar Photovoltaic," VfS Annual Conference 2016 (Augsburg): Demographic Change 145712, Verein für Socialpolitik / German Economic Association.
    18. Li, Bo & Ding, Junqi & Wang, Jieqiong & Zhang, Biao & Zhang, Lingxian, 2021. "Key factors affecting the adoption willingness, behavior, and willingness-behavior consistency of farmers regarding photovoltaic agriculture in China," Energy Policy, Elsevier, vol. 149(C).
    19. Stewart, Fraser, 2022. "Friends with benefits: How income and peer diffusion combine to create an inequality “trap” in the uptake of low-carbon technologies," Energy Policy, Elsevier, vol. 163(C).
    20. Best, Rohan, 2022. "Household wealth of tenants promotes their solar panel access," Economic Modelling, Elsevier, vol. 106(C).

    More about this item

    Keywords

    Aggregation; Hierarchical data; Household; Income; Non-linear; Solar;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D10 - Microeconomics - - Household Behavior - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

    Statistics

    Access and download statistics

    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:eneeco:v:112:y:2022:i:c:s0140988322002833. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/eneco .

    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/eneco .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.