Graduation Year

2025

Date of Submission

12-2024

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Laura Grant

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2024 Talia de Beer

Abstract

Solar energy has emerged as a pivotal renewable energy source, experiencing significant growth in the United States over the past two decades. As policymakers continue to develop and refine the best methods to incentivize solar adoption while reflecting true costs and potential equity concerns, this paper seeks to evaluate the impact of changes in solar pricing policies on residential solar installations. Employing a difference-in-differences regression model, this study examines the effects of policy changes on both the system capacity and number of installations of adoption in three Western states that have transitioned away from traditional Net Energy Metering (NEM) policies–Arizona, California, and Utah–compared to control states (Colorado, New Mexico, Oregon, and Washington). Drawing from the Lawrence Berkley National Laboratory’s Tracking the Sun dataset, the analysis reveals insights into how changes in solar pricing policy affect inframarginal and extra-marginal adopters. Results demonstrate that announcement effects are often stronger than implementation effects, driving a surge in installation counts in treated states relative to the control group. Households appear to respond urgently to policy announcements, rushing to install systems under more favorable rates. Implementation effects varied across treated states, reflecting the nuanced trade-offs between incentivizing adoption and ensuring equity in solar pricing policies. These results offer insights into the complex dynamics of solar adoption, highlighting how policy changes can influence consumer behavior and market trends.

Share

COinS