Peer Effects and Ownership Costs in the Diffusion of Residential Solar Photovoltaic in California PDF Download

Author: Pimjai Hoontrakul
Publisher:
ISBN:
Category :
Languages : en
Pages : 124

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Book Description
This research analyses the California Solar Initiative (CSI) Program data to identify and describe peer effects and price elasticity to adoption affecting the patterns of residential PV adoption. Descriptive statistics and adoption trends are analyzed to explore the impacts of peer effects and third-party owned system on the diffusion of residential solar PV in California. As the residential solar PV technology is still in an early stage of market formation, understanding the patterns of adoption in relatively more mature market can have broad implications for wider diffusion of the technology at the national level. In the first part of the thesis, I build an econometric model to estimate the influence of system cost and peer effects on the rate of diffusion at the zip code-level. The results reveal significant and positive installed base effects in the rate of future adoption. These results provide support to the hypothesis that peer effects help accelerate the adoption of new technologies. The cost-to-customer reduction is negative and significant at the state level. The impact of installed base in inducing new adoption is larger in zip codes with higher overall adoptions. The second part of the thesis presents trends in installation and choice of system capacity of major adoption clusters in California and analyzes the spread of third-party owned systems. Evidence from major adoption clusters in California has shown that growth in leasing adoption exhibits exponential characteristics while growth of customer owned system shows strongly linear feature. This suggests that third-party owned systems play a role in expanding the solar PV market to a significantly large population, especially given that this business would significantly reduces information cost associated with PV adoption. These results offer direct policy and marketing insights that would be useful in speeding up the diffusion of residential PV.

Author: Bryan Bollinger
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
Social interaction (peer) effects are recognized as a potentially important factor in the diffusion of new products. In the case of environmentally friendly goods or technologies, both marketers and policy makers are interested in the presence of causal peer effects as social spillovers can be used to expedite adoption. We provide a methodology for the simple, straightforward identification of peer effects with sufficiently rich data, avoiding the biases that occur with traditional fixed effects estimation when using the past installed base of consumers in the reference group. We study the diffusion of solar photovoltaic panels in California and find that at the average number of owner-occupied homes in a zip code, an additional installation increases the probability of an adoption in the zip code by 0.78 percentage points. Our results provide valuable guidance to marketers designing strategies to increase referrals and reduce customer acquisition costs. They also provide insights into the diffusion process of environmentally friendly technologies.

Author: Changgui Dong
Publisher:
ISBN:
Category :
Languages : en
Pages : 328

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Book Description
Human-induced climate change, with its potentially catastrophic impacts on weather patterns, water resources, ecosystems, and agricultural production, is the toughest global problem of modern times. Impeding catastrophic climate change necessitates the widespread deployment of renewable energy technologies for reducing the emissions of heat-trapping gases, especially carbon di-oxide (CO2). However, the deployment of renewable energy technologies is plagued by various market failures, such as environmental externalities from conventional energy sources, learning-by-doing, innovation spillover effects, and peer effects. In efforts to begin to address these market failures, several governments at all levels--city, state, regional, and national--have instituted various subsidies for promoting the adoption of renewable energy technologies. Public resources are limited and have competing uses. So, it is important to ask: how cost-effective are renewable energy subsidies? Are the subsidies even reaching the intended subjects--the potential adopters of renewable energy technologies? In this empirically-driven dissertation, I analyze these important policy design and evaluation questions with a focus on the solar subsidy programs in California. All programs to incentivize the adoption of renewable energy technologies run into the same key question: what is the optimal (maximum capacity inducing) rebate schedule in the face of volatile product prices and the need for policy certainty? Answering this question requires careful attention to both supply-side (learning-by-doing) and demand-side (peer effects) market dynamics. I use dynamic programming to analyze the effectiveness of the largest state-level solar photovoltaic (PV) subsidy program in the U.S. - the California Solar Initiative (CSI) - in maximizing the cumulative PV installation in California under a budget constraint. I find that previous studies overestimated learning-by-doing in the solar industry. Consistent with other studies, I also find that peer effects are a significant demand driver in the California solar market. The main implication of this empirical finding in the dynamic optimization context is that it forces the optimal solution towards higher subsidies in earlier years of the program, and, hence, leads to a lower program duration (for the same budget). In particular, I find that the optimal rebate schedule would start not at $2.5/W as it actually did in CSI, but instead at $4.2/W; the effective policy period would be only three years instead of the realized period of six years. This optimal (i.e., most cost effective) solution results in total PV adoption of 32.2 MW (8.1%) higher than that installed under CSI, using the same budget. Furthermore, I find that the optimal rebate schedule starts to look like the actual CSI in a 'policy certainty' scenario where the variation of periodic subsidy-level changes is constrained. Finally, introduction of stochastic learning-by-doing as a way to better capture the dynamic nature of learning in markets for new products does not yield significantly different results compared to the deterministic case. Another, still-unanswered, redistribution question related to the CSI program is: to what degree have the direct PV incentives in California been passed through from installers to consumers? I address this question by carefully examining the residential PV market in California by applying multiple methods. Specifically, I apply a structural-modeling approach, a reduced-form regression analysis, and regression discontinuity designs to estimate the incentive pass-through rate in California's solar program. The results consistently suggest a high average pass-through rate of direct incentives of nearly 100%, though with regional differences among California counties and utilities. While these results could have multiple explanations, they suggest a relatively competitive market and a smoothly operating subsidy program. Combining evidence from the optimal subsidy policy design and the incentive pass-through analysis, this dissertation lends credibility to the cost-effectiveness of CSI given CSI's design goal of providing policy certainty and also finds a near-perfect incidence in CSI. Long-term credible commitment as reflected through CSI's capacity-triggered step changes in rebates along with policy and data transparency are important factors for CSI's smooth and cost-effective functioning. Though CSI has now wound down because final solar capacity targets have been reached, the historical performance of CSI is relevant not only as an ex-post analysis in California, but potentially has broader policy implications for other solar incentive programs both nationally and internationally.

Author: Vijay Mahajan
Publisher: Springer Science & Business Media
ISBN: 9780792377511
Category : Business & Economics
Languages : en
Pages : 376

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Book Description
Product sales, especially for new products, are influenced by many factors. These factors are both internal and external to the selling organization, and are both controllable and uncontrollable. Due to the enormous complexity of such factors, it is not surprising that product failure rates are relatively high. Indeed, new product failure rates have variously been reported as between 40 and 90 percent. Despite this multitude of factors, marketing researchers have not been deterred from developing and designing techniques to predict or explain the levels of new product sales over time. The proliferation of the internet, the necessity or developing a road map to plan the launch and exit times of various generations of a product, and the shortening of product life cycles are challenging firms to investigate market penetration, or innovation diffusion, models. These models not only provide information on new product sales over time but also provide insight on the speed with which a new product is being accepted by various buying groups, such as those identified as innovators, early adopters, early majority, late majority, and laggards. New Product Diffusion Models aims to distill, synthesize, and integrate the best thinking that is currently available on the theory and practice of new product diffusion models. This state-of-the-art assessment includes contributions by individuals who have been at the forefront of developing and applying these models in industry. The book's twelve chapters are written by a combined total of thirty-two experts who together represent twenty-five different universities and other organizations in Australia, Europe, Hong Kong, Israel, and the United States. The book will be useful for researchers and students in marketing and technological forecasting, as well as those in other allied disciplines who study relevant aspects of innovation diffusion. Practitioners in high-tech and consumer durable industries should also gain new insights from New Product Diffusion Models. The book is divided into five parts: I. Overview; II. Strategic, Global, and Digital Environments for Diffusion Analysis; III. Diffusion Models; IV. Estimation and V. Applications and Software. The final section includes a PC-based software program developed by Gary L. Lilien and Arvind Rangaswamy (1998) to implement the Bass diffusion model. A case on high-definition television is included to illustrate the various features of the software. A free, 15-day trial access period for the updated software can be downloaded from http://www.mktgeng.com/diffusionbook. Among the book's many highlights are chapters addressing the implications posed by the internet, globalization, and production policies upon diffusion of new products and technologies in the population.

Author: Adam Parker Leising
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
What motivates homeowners to install solar-photovoltaic (PV) panels on their roofs? In particular, how significant is it if a homeowner knows another homeowner who's already done it? In this case-control study of PV adopters and non-adopters from San Francisco, San Jose, and Fresno, I collected economic, environmental, and social information from nearly 200 homeowners in order to answer these questions. Outside of PV adoption, I found PV adopters to behave no more environmentally than do PV non-adopters. With regards to economic considerations, PV adoption is best predicted by whether the homeowner's expected PV electricity rate is less than his current PG & E electricity average rate. Concerning social influences, a homeowner who knows one more PV adopter than does the average homeowner has a probability of PV adoption that is two- to three-times that of the average homeowner. Driving this peer effect is an amplification of the environmental benefits of PV panels, not the acquisition of new or improved information. Policies that leverage this peer effect may serve as effective complements to traditional subsidization policies.

Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
We report that over the past several years, third-party-ownership (TPO) structures for residential photovoltaic (PV) systems have become the predominant ownership model in the US residential market. Under a TPO contract, the PV system host typically makes payments to the third-party owner of the system. Anecdotal evidence suggests that the total TPO contract payments made by the customer can differ significantly from payments in which the system host directly purchases the system. Furthermore, payments can vary depending on TPO contract structure. To date, a paucity of data on TPO contracts has precluded studies evaluating trends in TPO contract cost. This study relies on a sample of 1113 contracts for residential PV systems installed in 2010-2012 under the California Solar Initiative to evaluate how the timing of payments under a TPO contract impacts the ultimate cost of the system to the customer. Furthermore, we evaluate how the total cost of TPO systems to customers has changed through time, and the degree to which contract costs have tracked trends in the installed costs of a PV system. We find that the structure of the contract and the timing of the payments have financial implications for the customer: (1) power-purchase contracts, on average, cost more than leases, (2) no-money-down contracts are more costly than prepaid contracts, assuming a customer's discount rate is lower than 17% and (3) contracts that include escalator clauses cost more, for both power-purchase agreements and leases, at most plausible discount rates. Additionally, all contract costs exhibit a wide range, and do not parallel trends in installed costs over time.

Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
We report that over the past several years, third-party-ownership (TPO) structures for residential photovoltaic (PV) systems have become the predominant ownership model in the US residential market. Under a TPO contract, the PV system host typically makes payments to the third-party owner of the system. Anecdotal evidence suggests that the total TPO contract payments made by the customer can differ significantly from payments in which the system host directly purchases the system. Furthermore, payments can vary depending on TPO contract structure. To date, a paucity of data on TPO contracts has precluded studies evaluating trends in TPO contract cost. This study relies on a sample of 1113 contracts for residential PV systems installed in 2010–2012 under the California Solar Initiative to evaluate how the timing of payments under a TPO contract impacts the ultimate cost of the system to the customer. Furthermore, we evaluate how the total cost of TPO systems to customers has changed through time, and the degree to which contract costs have tracked trends in the installed costs of a PV system. We find that the structure of the contract and the timing of the payments have financial implications for the customer: (1) power-purchase contracts, on average, cost more than leases, (2) no-money-down contracts are more costly than prepaid contracts, assuming a customer's discount rate is lower than 17% and (3) contracts that include escalator clauses cost more, for both power-purchase agreements and leases, at most plausible discount rates. Additionally, all contract costs exhibit a wide range, and do not parallel trends in installed costs over time.

Author: Bill Shipley
Publisher: Cambridge University Press
ISBN: 9780521529211
Category : Mathematics
Languages : en
Pages : 330

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Book Description
This book goes beyond the truism that 'correlation does not imply causation' and explores the logical and methodological relationships between correlation and causation. It presents a series of statistical methods that can test, and potentially discover, cause-effect relationships between variables in situations in which it is not possible to conduct randomised or experimentally controlled experiments. Many of these methods are quite new and most are generally unknown to biologists. In addition to describing how to conduct these statistical tests, the book also puts the methods into historical context and explains when they can and cannot justifiably be used to test or discover causal claims. Written in a conversational style that minimises technical jargon, the book is aimed at practising biologists and advanced students, and assumes only a very basic knowledge of introductory statistics.

Author: Steven N. Durlauf
Publisher: MIT Press
ISBN: 9780262541763
Category : Business & Economics
Languages : en
Pages : 260

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Book Description
This collection of essays presents a variety of approaches to understanding the dynamics of human interaction.

Author: Ottmar Edenhofer
Publisher: Cambridge University Press
ISBN: 9781107607101
Category : Science
Languages : en
Pages : 1088

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Book Description
This Intergovernmental Panel on Climate Change Special Report (IPCC-SRREN) assesses the potential role of renewable energy in the mitigation of climate change. It covers the six most important renewable energy sources - bioenergy, solar, geothermal, hydropower, ocean and wind energy - as well as their integration into present and future energy systems. It considers the environmental and social consequences associated with the deployment of these technologies, and presents strategies to overcome technical as well as non-technical obstacles to their application and diffusion. SRREN brings a broad spectrum of technology-specific experts together with scientists studying energy systems as a whole. Prepared following strict IPCC procedures, it presents an impartial assessment of the current state of knowledge: it is policy relevant but not policy prescriptive. SRREN is an invaluable assessment of the potential role of renewable energy for the mitigation of climate change for policymakers, the private sector, and academic researchers.