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If Solar is Contagious, Can Utilities Help Spread the Bug?

You may have heard it before, but it is worth mentioning again: In residential communities, solar is contagious. But a recent study, "Peer Effects in the Diffusion of Solar Photovoltaic Panels," conducted by Bryan Bollinger of the NYU Stern School of Business and Kenneth Gillingham of the Yale School of Forestry & Environmental Studies, published in December sheds some new light on the phenomenon.

The report confirms that, “there is a positive, statistically significant, causal effect of previous nearby installations on a household’s decision to adopt solar panels…A one percent increase in the zip code installed base leads to approximately a one percent increase in the zip code adoption rate.” And at the street level, the study found that a one percent increase in installed solar leads to a nine percent increase in the street adoption rate.  Those numbers add up.

John Farrell of Energy Self-Reliant States developed a timeline based on Vote Solar’s Adam Browning’s recent study on the subject.

If you start with a neighborhood with 25 solar installations, where it was 100 days between the 24th and 25th installation, this peer pressure effect will reduce the time between installations to just 10 days by the 250th PV project. Of course, this process takes a while to unfold.  In fact, if solar PV was being installed only once every 100 days at the outset, the peer pressure effect will take over 15 years to reduce the time between neighborhood installs to 10 days. 

Browning responded to Farrell’s virulent findings: “I would note that the current strain (solar expensivus) is not as virulent as future strain (solar cheapus). Minnesotans are expected to have low resistance — we are talking major epidemic levels of contagion.” 

The NYU/Yale report goes on to mention companies that take advantage of these statistics, specifically SolarCity. “For example, one of the strategies employed by SolarCity (the largest installer in California) involves finding one or two vocal solar advocates in a neighborhood and giving the entire neighborhood a slightly lower price if enough adoptions are made within that neighborhood.” Other companies post signs that increase the visibility of the installations.

Since these companies are obviously building on this encouraging trend, would it make sense for utilities to get involved, as well?

The report also detailed results from a survey that concluded 52% of participating consumers installed solar panels for financial reasons. If the majority of customers are trying to save money on their electric bill, many may first look to their utility for answers. 

PG&E may be on the right track in California. As a decoupled utility, PG&E actually benefits when its customers use less energy or go completely off-grid. The company recently invested $61 million in SolarCity and $100 million in SunRun, another solar leasing company. Despite being a decoupled utility, PG&E still gains a hefty profit each year of around $16 billion.

To further its efforts, PG&E also takes advantage of the solar contagion by establishing a “Solar Champion” program in different neighborhoods. According to its website, the course, “An all-day course intended to equip students with the general training necessary to communicate the Go Solar message in their respective communities.” Through this program, certain members of each community participate in training sessions that educate them on how to be a solar advocate and promote solar to their neighbors. In addition to its “Solar Champion” course, PG&E also offers an array of live classes and workshops on such topics as system basics for grid-tied applications, site analysis and system sizing. Webinars and online classes are being planned for the near future.  

One the east coast, Constellation Energy partnered with Astrum Solar offer solar leasing to its customers in New Jersey, Massachusetts, Maryland, New York, Ohio, and Pennsylvania in late September. Astrum installs and maintains the panels while Constellation retains the SRECs the panels produce to meet state requirements. This method satisfies the majority of customers who simply want to save money. “Leasing can sharply reduce the upfront costs for solar, and in this economy that's an important consideration," said Mark Huston, head of Constellation Energy's retail business in a press release. “For qualified residential customers whose homes meet the requirements for sun exposure and roof area, solar can have a considerable impact on reducing their electricity costs."

No matter the case, it seems as though the residential solar contagion is blossoming, and more utilities may want to take advantage and spread the bug. 

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