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How Business Locations Could Shape Rooftop Solar Adopter Demographics

Previous research has shown that the locations of businesses such as grocery stores can result in inequitable access to goods and services. Could the locations of rooftop solar businesses similarly help explain, among other factors, why rooftop solar adopters earn higher incomes, on average, than non-adopters?

In a new paper published in the journal Energy Research and Social Science, Berkeley Lab researchers explore how business locations partly explain rooftop solar adoption inequity. The Berkeley Lab authors reach three primary conclusions.

First, contractor license data show that rooftop solar business headquarters tend to locate headquarters in areas with higher income levels. For instance, there are around 5.4 rooftop solar businesses per 100,000 households in zip codes with median annual household incomes greater than $80,000, compared to 3.3 businesses per 100,000 households in zip codes with lower household income levels.

Rooftop solar business headquarters per 100,000 households by household income levels, based on sample defined in the study.

Second, the data suggest that the openings of new rooftop solar businesses increase local rooftop solar adoption, including in relatively low-income areas. The study data sample show that each new solar business was associated with roughly 17 additional installs per quarter in the same zip code as the business. New businesses were associated with about 9 additional installs in zip codes with median annual incomes less than the state median income, compared with about 18 additional installs for new businesses in higher-income zip codes. These additional installs could reflect new business promotions, increased marketing, or other factors associated with the opening of new businesses.

Third, most installers obtain most sales from relatively affluent customers, including installers headquartered in low-income areas. As a result, new business formation does not necessarily have strong impacts on low-income adoption, even when businesses form in low-income areas. These results imply that policies to promote new businesses in low-income areas would not significantly increase adoption equity without interventions to reduce demand-side barriers to low-income adoption. Still, there may be other rationales for promoting solar business formation in low-income areas, such as creating local employment opportunities.

The study uses statistical models that help infer causal impacts. The key limitation of these models is that they only capture the impacts of new business formation. Existing businesses with established community ties could play unique roles in driving equitable access to rooftop solar.

The Berkeley Lab study, Supply sunspots and shadows: Business siting patterns and inequitable rooftop solar adoption in the United States, is published in the journal Energy Research and Social Science, and is available here.

For questions on the report, feel free to contact Eric O’Shaughnessy at Lawrence Berkeley National Laboratory (720-381-4889, (link sends e-mail)).

Funding support was provided by the U.S. Department of Energy Solar Energy Technologies Office.

Article courtesy of Berkeley Lab.

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