Valuing Solar Subsidies

Bryan Bollinger, Kenneth Gillingham and Justin Kirkpatrick

No 11627, CESifo Working Paper Series from CESifo

Abstract: Individuals trade present for future consumption across a range of economic behaviors, and this tradeoff may differ across socioeconomic groups. To assess these tradeoffs, we estimate a dynamic model of residential solar adoption and system sizing in California using household-level data on solar irradiance, electricity consumption, and electricity rates that offer plausibly exogenous variation in the future benefits from adopting relative to upfront costs. We find implicit discount rates of 15.3%, 13.8%, and 10.0% for low-, medium-, and high-wealth households. Counterfactual simulations demonstrate opportunities to reduce the regressivity of solar adoption, increase policy cost-effectiveness, and improve welfare for low-wealth households.

Keywords: solar; discount rates; energy policy; distributional impacts; dynamic discrete choice models (search for similar items in EconPapers)
JEL-codes: D12 H23 L94 Q48 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11627.pdf (application/pdf)

Related works:
Working Paper: Valuing Solar Subsidies (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11627

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().