Are solar panels a middle-class purchase? This survey says yes

Print Friendly, PDF & Email

Households most likely to join in the solar spree are affluent enough to afford upfront investment, but not so much to not worry about future power bills.

share
The latest research suggests that in Australia, rooftop solar photovoltaics are more likely to be adopted by middle-class households
Print Friendly, PDF & Email

The Conversation

The latest research suggests that in Australia, rooftop solar photovoltaics are more likely to be adopted by middle-class households

The rate of growth in residential rooftop solar photovoltaics (PV) in Australia since 2008 has been nothing short of breathtaking.

Our new research suggests that the households most likely to join in the solar spree are those that are affluent enough to afford the upfront investment, but not so wealthy that they don’t worry about their future power bills.

Australia now has the highest penetration of residential rooftop PV of any country in the world, with the technology having been installed on one in five freestanding or semi-detached homes. In the market-leading states of Queensland and South Australia this ratio is about one in three, and Western Australia is not far behind, with one in four having PV.

The explosion in rooftop PV uptake since 2008. Derived from Clean Energy Regulator data.

While PV panels give households more control over their electricity bills, and each new installation helps reduce greenhouse gas emissions, the market’s rapid expansion has posed significant challenges for the management of the electricity system as a whole.

Unlike other industries where goods can be warehoused or stockpiled to manage fluctuations in supply and demand, electricity is not yet readily storable. Storage options such as batteries are now commercially available, but haven’t yet reached widespread use.

This means that a system operator is required to keep the grid balanced in real time, ideally with just the right amount of capacity and backup to manage shocks in supply or demand.

Securing the right amount of generation capacity for the electricity grid relies on long-term planning, informed by accurate supply and demand forecasts. Too much investment means excessive prices or assets lying idle (or both). Too little means longer, deeper or more frequent blackouts.

But as solar panels spread rapidly through the suburbs, the job of forecasting supply and demand is getting much harder.

This is because the commercial history of residential rooftop PV has been too short, and the pace of change too fast, for a clear uptake trend to be established. Previous attempts to predict the market’s continuing growth have thus entailed a lot of guesswork.

Why do people buy solar panels?

One way to improve our understanding is to talk to consumers directly about their purchasing intentions and decisions. The trick is to find out what prompts householders to take that final step from considering investing in solar panels, to actually buying them.

This was the approach we took with our research, published today in the international journal, Renewable and Sustainable Energy Reviews.

We analysed data from a survey of more than 8,000 Queensland households in 2014 and 2015, part of a survey series commissioned by an industry group now known as Energy Queensland.

Comparison of motivational factors between surveyed PV intenders and adopters. Bondio, Shahnazari & McHugh (2018)

We found that the decision to go solar was driven largely by housholds’ concerns over rising electricity bills and the influence that economic life events have over perceptions of affordability.

But the households that tended to adopt PV were also those that were affluent enough not to be put off by the relatively large upfront cost.

This combination of having access to funds, while at the same time being concerned about future electricity prices, appears to be a broadly middle-class trait.

While the upfront cost of PV can deter lower-income households, this can be overcome by receiving an offer that is too good to refuse, or if concerns about ongoing electricity bills are acute – particularly in the case of retirees.

Electricity price uncertainty is a particular concern for retirees, who typically have a lower income. We found that retirees were more likely than non-retirees to invest in solar panels, all else being equal. Retirees, like many people who invest in solar power, seem to view buying solar panels as being like entering into a long-term contract for electricity supply, in that it provides price certainty over the life of the PV system.

We also found that while the idea of self-sufficiency was important for developing an intention to buy solar panels, this motivation later fell away among households that went ahead and bought them. This could be because householders who buy solar panels, but find themselves still relying significantly on the grid, may conclude that self-sufficiency isn’t achievable after all.

About one-third of those who said they intended to buy solar panels cited environmental concerns as a reason for their interest.

Yet this factor did not significantly increase the odds of them going on to adopt the technology. This suggests that when it comes to the crunch, household finances are often the crucial determining factor.

We also found the chances of adopting solar panels were highest for homes with three or four bedrooms.

Smaller homes may face practical limitations regarding roof space, whereas homes with five bedrooms or more are likely to be more valuable, suggesting that these householders may sit above a wealth threshold beyond which they are unconcerned about electricity bills.

But perhaps our most important finding is that analysis of household survey data can be useful to forecasters.

Knowing who is adopting rooftop PV – and why – should enable better predictions to be made about the technology’s continuing expansion, including the crucial question of when the market might reach its saturation point.

Source: The Conversation. Reproduced with permission.

Print Friendly, PDF & Email

13 Comments
  1. Rod 4 months ago

    I don’t think we are any where near saturation point yet.
    I’ve just put a 6.5kW array on a rental for what could have been $3,800 (I opted for a hybrid inverter, so a bit more) Jinko and Sungrow.

    Environmental concerns are up there but the cost is now so low it is almost a no brainer to landlords too.
    I am also starting to see solar in wealthier suburbs. Maybe it is approaching status symbol territory. “My system is bigger than yours”. Or maybe the economics are too much to ignore for the higher income group as well.
    Also, many people are starting to upgrade or up size their systems.

    • john 4 months ago

      The survey i linked to does support your assumption yes people when able are intending to upgrade and yes are intending to add batterys.

    • George Darroch 4 months ago

      Unless government and industry team up to get in the way (they may try at a certain point), 21% of households and a much smaller percentage of businesses is not an upper bound. We could easily reach 50% within a decade if current trends continue.

  2. john 4 months ago

    8000 out of how many in Qld perhaps 550000 and how many post codes were selected?
    .015% of installs does not give me confidence in the findings.
    If one targets the known higher social economic suburbs the conclusion would be only these people install PV.
    I am not saying this is what happened however just a question.
    My answers are in the data from the survey. It does cover the state and is extensive. One interesting aspect is the awareness growing from the surveys, which have been going of for a few years now.

    https://www.ergon.com.au/__data/assets/pdf_file/0020/206417/QHES-2017-Full-Report.pdf

    • Peter Campbell 4 months ago

      8000 is a very respectable sample size if the rest of the survey design is good.

  3. Pedro 4 months ago

    I recently went to a residential site of a house with great views, where a 30kW system was being installed. I was informed by the installer that the system may reduce their bill by 50% and was only put on because the neighbours objected to the intended palm trees on a roof top garden. So solar was a plan B for this customer and was cheaper than the ducted air con system.

    Personally I would have employed a better architect knowledgeable in solar passive design and had the PV system integrated into the design of the house.

    Anecdotally the price of energy for wealthy people living in very affluent suburbs is not much concern even if their bills are in the thousands of dollars/month. It seems there is more concern about the look of panels on the roof.

    • George Darroch 4 months ago

      30kW? Huge.

      • Pedro 4 months ago

        Huge for a domestic system.

    • PLDD 4 months ago

      I don’t think just the wealthy are worried about the aesthetics. Most house owners spend a lot on the appearance of their houses and panels on tilt racks rarely look good.

      We have just built our house and have panels and took the efficiency hit by mounting them at the same angle as the roof (2 degrees) because they would have ruined the whole look of the house.

      Not certain why “solar is cheaper than ducted air con”. Wouldn’t a solar powered reverse cycle aircon system be the most efficient option – cheap beat and cooling. A solar powered heat pump with hydronic underfloor would be the best type of heat (not cheap) but the house would need a decent passive solar design for the summer.

      In our area installers are frequently putting in pretty big systems (20K+) on expensive houses – they tend to have the roof real estate to house the panels.

      • Pedro 4 months ago

        I dont know much about the costs of ducted air con, but the installer mentioned it in passing. It was a very big 4 storey house. I get your point about aesthetics. That is always a hard one to judge. Personally i do not like the look of panels jammed all over the roof in 5 different facing sub arrays, but it gets the bill down.

  4. solarguy 4 months ago

    It is up to the networks to invest in utility scale battery storage to balance over supply of energy from roof top solar which can injected into the grid at peak times.

    • PLDD 4 months ago

      I thought a few of the bigger retailers had solar/battery offerings which head in that direction. No upfront cost installs and a model that shares the benefit with the consumer and gives the retailer distributed storage.

      The SA Government seems to be heading forward with their two schemes – installing 50,000 social housing battery and solar systems to act as a distributed generation and storage resource. Plus 40,000 connected batteries on subsidized loans to existing PV owners.

      Interesting examples of how this part of the market is changing.

Comments are closed.