IDEAS home Printed from
   My bibliography  Save this paper

Sun and Lemons: Getting over Information Asymmetries in the California Solar Market




Using detailed data of approximately 125,000 solar photovoltaic systems installed in California between 2007 and 2014 I argue that the adoption of solar panels from Chinese manufacturers and the introduction of a leasing model for solar systems are closely intertwined. First, cheaper Chinese panels allowed a leasing model to be profitable for contractors. But an asymmetric information problem exists in the market for solar panels. Solar panels are long-lived productive assets, where quality is important but costly for individual consumers to verify. Consumers can instead be expected to rely on brands and observed reliability. This led to a barrier to entry for cheaper panels from new, primarily Chinese manufacturers. The adoption of a leasing model by several large local installers solved the asymmetric information problem and led to the adoption of Chinese panels and in turn lower overall system prices.

Suggested Citation

  • Mauritzen, Johannes, 2014. "Sun and Lemons: Getting over Information Asymmetries in the California Solar Market," Discussion Papers 2014/35, Norwegian School of Economics, Department of Business and Management Science.
  • Handle: RePEc:hhs:nhhfms:2014_035

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Solar panels; asymmetric information problem;

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:hhs:nhhfms:2014_035. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Stein Fossen (email available below). General contact details of provider: .

    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.