Sunspots that matter: The effect of weather on solar technology adoption Articles uri icon

authors

  • LAMP, STEFAN ANDREAS

publication date

  • January 2023

start page

  • 1179

end page

  • 1219

volume

  • 84

International Standard Serial Number (ISSN)

  • 0924-6460

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.

subjects

  • Economics

keywords

  • renewable energy; solar photovoltaics; projection bias; salience; energy policy; technology diffusion