Household Income Levels as a Driver of Residential Solar Panel Adoption
Keywords:Adoption, distributed generation, photovoltaic, Smart Grid, renewables
AbstractThe traditional electrical grid, also known as Power Grid, is used to carry power from a few central generators to a large number of users. These Power Grids across U.S. are outdated, have reached their capacities, and need to be upgraded with modern technologies to continue delivery of required levels of energy demand. Furthermore, the overall societal costs resulting from grid blackouts are considered unacceptable (North American Reliability Council (NERC), 2009); therefore, the utility industry needs to respond quickly. The issues are compounded by the current trend of consumers adding distributed generation equipment to the grid, including the growth in solar panelsâ€™ installations and use of electric vehicles. While presenting a significant societal issue, it also offers a large business opportunity. The global solar power market is growing rapidly, estimated to reach a value of $130.5 billion U.S. dollars by 2021. The global market for total distributed generation as measured by solar panels, wind power, and biofuel was estimated at $246.1 billion in 2011 and is projected to reach $386 billion U.S. dollars in 2021. This research identifies and examines drivers of residential solar panel adoption in California. Regression analysis of 106198 records of solar panel installations in California for the years 2007â€“2013 was performed against demographic data for 1,733 zip codes. The research has quantified a positive relationship between household income levels and adoption patterns of solar panels in California. The results can be used to better project revenue growth in the renewables sector as well as enhance predictive analysis of utility capital investments. Also, these results could lead to a better understanding of future business models for operating utility assets
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