Deconstructing Solar Photovoltaic Pricing: The Role of Market Structure, Technology, and Policy

Kenneth Gillingham, Hao Deng, Ryan Wiser, Naim Darghouth, Gregory Nemet, Galen Barbose, Varun Rai and Changgui Dong

The Energy Journal, 2016, vol. 37, issue 3, 231-250

Abstract: Solar photovoltaic (PV) system prices in the United States display considerable heterogeneity both across geographic locations and within a given location. Such heterogeneity may arise due to state and federal policies, differences in market structure, and other factors that influence demand and costs. This paper examines the relative importance of such factors on equilibrium solar PV system prices in the United States using a detailed dataset of roughly 100,000 recent residential and small commercial installations. As expected, we find that PV system prices differ based on characteristics of the systems. More interestingly, we find evidence suggesting that search costs and imperfect competition affect solar PV pricing. Installer density substantially lowers prices, while regions with relatively generous financial incentives for solar PV are associated with higher prices.

Keywords: residential photovoltaic; solar; price dispersion (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:37:y:2016:i:3:p:231-250

DOI: 10.5547/01956574.37.3.kgil

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