Solar Panel Adoption in SMEs in Emerging Countries

Pedro Hancevic and Hector H. Sandoval
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Hector H. Sandoval: Bureau of Economic and Business Research

No 222, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We analyze the determinants of adoption of distributed solar photovoltaic systems, focusing on small and medium-sized commercial and service firms. We make use of monthly billing data that is perfectly matched with data from the ENCENRE-2019 –a novel survey that gathers data on electricity consumption, stock of electric equipment, and a rich set of firm characteristics in the Metropolitan Area of Aguascalientes, Mexico. Using an econometric model, we find evidence that a set of explanatory variables such as business characteristics, the economic sector, ownership status, stock and usage of equipment and appliances, presence of other solartechnologies, and views about the use of renewable energy are important determinants of the probability of adoption of solar panel systems. Furthermore, using machine learning methods to identify the best predictors of solar adoption, we indirectly validate the theory-driven empirical model by assessing a large set of explanatory variables and selecting a subset of these variables. In addition, we investigate relevant cases where a priory solar panel adoption seems to be costeffective but structural adoption barriers and adoption gaps might coexist for certain groups of electricity users. We also calculate the social cost savings and the avoided CO2 emissions. Finally, based on our results, we provide several policy implications and recommendations.

Keywords: small and medium-sized enterprises (SMEs); distributed photovoltaic generation; electricity consumption; technology adoption; Mexico (search for similar items in EconPapers)
JEL-codes: D22 O14 Q40 Q53 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-03
New Economics Papers: this item is included in nep-big, nep-ene, nep-env and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:222

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