Are solar panels a middle-class purchase? This survey says yes

June 13, 2018 by Adam Mchugh, The Conversation
The latest research suggests that in Australia, rooftop solar photovoltaics are more likely to be adopted by middle-class households.

The rate of growth in residential rooftop solar photovoltaics (PV) in Australia since 2008 has been nothing short of breathtaking.

Our new research suggests that the households most likely to join in the solar spree are those that are affluent enough to afford the upfront investment, but not so wealthy that they don't worry about their future power bills.

Australia now has the highest penetration of residential rooftop PV of any country in the world, with the technology having been installed on one in five freestanding or semi-detached homes. In the market-leading states of Queensland and South Australia this ratio is about one in three, and Western Australia is not far behind, with one in four having PV.

While PV panels give households more control over their electricity bills, and each new installation helps reduce , the market's rapid expansion has posed significant challenges for the management of the electricity system as a whole.

Unlike other industries where goods can be warehoused or stockpiled to manage fluctuations in supply and demand, electricity is not yet readily storable. Storage options such as batteries are now commercially available, but haven't yet reached widespread use. This means that a system operator is required to keep the grid balanced in real time, ideally with just the right amount of capacity and backup to manage shocks in supply or demand.

Securing the right amount of generation capacity for the electricity grid relies on long-term planning, informed by accurate supply and demand forecasts. Too much investment means excessive prices or assets lying idle (or both). Too little means longer, deeper or more frequent blackouts.

But as spread rapidly through the suburbs, the job of forecasting supply and demand is getting much harder.

The explosion in rooftop PV uptake since 2008. Derived from Clean Energy Regulator data

This is because the commercial history of residential rooftop PV has been too short, and the pace of change too fast, for a clear uptake trend to be established. Previous attempts to predict the market's continuing growth have thus entailed a lot of guesswork.

Why do people buy solar panels?

One way to improve our understanding is to talk to consumers directly about their purchasing intentions and decisions. The trick is to find out what prompts householders to take that final step from considering investing in solar panels, to actually buying them.

This was the approach we took with our research, published today in the international journal, Renewable and Sustainable Energy Reviews. We analysed data from a survey of more than 8,000 Queensland households in 2014 and 2015, part of a survey series commissioned by an industry group now known as Energy Queensland.

We found that the decision to go solar was driven largely by housholds' concerns over rising electricity bills and the influence that economic life events have over perceptions of affordability.

But the households that tended to adopt PV were also those that were affluent enough not to be put off by the relatively large upfront cost.

This combination of having access to funds, while at the same time being concerned about future electricity prices, appears to be a broadly middle-class trait.

Comparison of motivational factors between surveyed PV intenders and adopters. Credit: Bondio, Shahnazari & McHugh (2018)

While the upfront cost of PV can deter lower-income households, this can be overcome by receiving an offer that is too good to refuse, or if concerns about ongoing electricity bills are acute – particularly in the case of retirees.

Electricity price uncertainty is a particular concern for retirees, who typically have a lower income. We found that retirees were more likely than non-retirees to invest in solar panels, all else being equal. Retirees, like many people who invest in solar power, seem to view buying solar panels as being like entering into a long-term contract for supply, in that it provides price certainty over the life of the PV system.

We also found that while the idea of self-sufficiency was important for developing an intention to buy solar panels, this motivation later fell away among households that went ahead and bought them. This could be because householders who buy solar panels, but find themselves still relying significantly on the grid, may conclude that self-sufficiency isn't achievable after all.

About one-third of those who said they intended to buy solar panels cited environmental concerns as a reason for their interest. Yet this factor did not significantly increase the odds of them going on to adopt the technology. This suggests that when it comes to the crunch, household finances are often the crucial determining factor.

We also found the chances of adopting solar panels were highest for homes with three or four bedrooms. Smaller homes may face practical limitations regarding roof space, whereas homes with five bedrooms or more are likely to be more valuable, suggesting that these householders may sit above a wealth threshold beyond which they are unconcerned about .

But perhaps our most important finding is that analysis of household survey data can be useful to forecasters. Knowing who is adopting rooftop PV – and why – should enable better predictions to be made about the technology's continuing expansion, including the crucial question of when the market might reach its saturation point.

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14 comments

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Edenlegaia
3.7 / 5 (3) Jun 13, 2018
Well....DUH!
If you already have many things to pay and have little left, when you ACTUALLY have something left at the end of the month, you can't thnk about solar panels. Or turn insane after a quick, yet cruely precise calculus of how many years you'll have to wait till you can become econo/ecolo-friendly.
The best way to save money is to have even more money. Thanks for that awesome survey.
dirk_bruere
not rated yet Jun 13, 2018
I suspect poor people don't own their own homes nor have excess money for such things.
antialias_physorg
5 / 5 (2) Jun 13, 2018
If you already have many things to pay and have little left, when you ACTUALLY have something left at the end of the month, you can't thnk about solar panels.

The interesting thing is not that poor people don't afford themselves solar panels. The interesting thing is that rich people *don't* afford them (because they don't care about anyone but themselves and don't care about spending a little more on power)
TheGhostofOtto1923
3 / 5 (4) Jun 13, 2018
Well the govt should be paying for them. Like it should be paying for everything else of course.
Eikka
3.7 / 5 (3) Jun 13, 2018
If you already have many things to pay and have little left, when you ACTUALLY have something left at the end of the month, you can't thnk about solar panels.

The interesting thing is not that poor people don't afford themselves solar panels. The interesting thing is that rich people *don't* afford them (because they don't care about anyone but themselves and don't care about spending a little more on power)


Installing solar panels on your mansion is penny poker for the rich. They invest in whole solar parks and wind farms for the subsidies and tax breaks.

https://www.usnew...vestment
"I will do anything that is basically covered by the law to reduce Berkshire's tax rate," Buffet told an audience in Omaha, Nebraska recently. "For example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them."
lupus
1 / 5 (2) Jun 14, 2018
If you already have many things to pay and have little left, when you ACTUALLY have something left at the end of the month, you can't thnk about solar panels.

The interesting thing is not that poor people don't afford themselves solar panels. The interesting thing is that rich people *don't* afford them (because they don't care about anyone but themselves and don't care about spending a little more on power)


Do I detect the distinct pong of envy here.
ifitsmellslike
5 / 5 (1) Jun 14, 2018
People get all rational and objective when it comes to rejecting this sort of spending, maybe they should get rational about the big SUV and the granite countertop as well. What is the payback period on these things?
WillieWard
2 / 5 (4) Jun 15, 2018
Subsidizing "solar/wind+batteries" is the way of transferring wealth from the poorest to the richest.
gkam
1.7 / 5 (6) Jun 16, 2018
How many of you snarks actually have a PV system?

Mine powers the household and two cars.. Do you know how much money we save by not having to pay for gasoline (or oil, or tuneups), for two cars?
Long payback? Nope.

Most of you are still stuck in 20th Century thinking.
antialias_physorg
5 / 5 (3) Jun 16, 2018
Do I detect the distinct pong of envy here.

No, why would you think that? I just find that the richer people get the more they just don't care anymore (this attitude is probably the reason why they got rich inthe first place)
Edenlegaia
5 / 5 (2) Jun 17, 2018
How many of you snarks actually have a PV system?

Mine powers the household and two cars.. Do you know how much money we save by not having to pay for gasoline (or oil, or tuneups), for two cars?
Long payback? Nope.

Most of you are still stuck in 20th Century thinking.


I have no PV system. Why? Because i can't afford them. Heck, knowing how long they may last and their efficiency (tho the place i live in is amongst those with the poorest performance...), i wouldn't mind buying some and waiting few years before finally getting rid of my credits and most, if not all of my energy bills.

Most of us are stuck in 20th Century's tech. Don't try to guess what's inside our heads if you can't even get inside our lives, gkam.
gkam
1 / 5 (4) Jun 17, 2018
"Don't try to guess what's inside our heads if you can't even get inside our lives, gkam."

Elg, I understand completely. As the article states, it is a niche technology just becoming practical for most homeowners.

You are not my target, but those whose political prejudice or personal problems cause bad-mouthing of the technology or its users.
WillieWard
2.3 / 5 (3) Jun 18, 2018
Wise words: "good ideas are copied, bad ideas are imposed".
If solar/wind were really so good, it wouldn't necessary massive mass media propaganda, subsides/tax incentives, constitutional laws, mandates, to force people to use sunshine&breeze unicorn energy.
https://uploads.d...db1b.jpg
Notice:It wasn't necessary mandates to force people to use computers, cell phones, washing machines, etc. unlike solar panels and windmills, useless placebos, decorative facade for fossil fuels, that needed to be shoved down people's throats.
gkam
1 / 5 (3) Jun 18, 2018
Willie, you are just screaming across the playground.

Taking the Tesla to Tahoe today.

Ridin' on sunshine.

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