Solar power in Malta : forecasting household investment

Abstract

Climate change is an urgent issue that has risen to the top of legislators' agendas all around the world. Solar energy is emerging as an important component of the renewable energy mix but Malta's shift to renewables is still lagging. Therefore, this study sought to delve into the factors that motivate and hinder uptake among the Maltese, and dig deeper into interventions that can increase solar panel uptake. To this end, an online questionnaire was distributed, yielding 814 participants. Beyond conventional data collection for econometric modelling, the questionnaire contains embedded experimental components aimed at elucidating the intent behind solar panel adoption. The analytical toolkit encompasses logit and Ordinary Least Squares (OLS) estimation methods, together with an analysis of means derived from the experimental data. The empirical findings currently underscore several key determinants. In terms of motives, factors such as dwelling type and household size are significant determinants of solar panel investment decisions. On the other hand, barriers such as panel density in one’s locality and solar panel cost are found to be a significant determinant of solar panel investment. Moreover, demographics such as age, and living in Gozo are found to significantly impact solar panel adoption. Furthermore, when it comes to intent, positively believing in the benefits of solar panels, gross electricity bill, household members, extra roof space availability, household income, solar panel cost, government trust, gender, age, being involved in household decisions, and living in Gozo are statistically significant. Additionally, the analysis of means reveals that reduced interest rates on loans and enhanced Feedin-Tariff (FiT) incentives positively encourage individuals toward solar investments. This research currently offers valuable insights for policymakers, advocating for a more robust FiT scheme and targeted interventions that currently address the specific factors influencing both solar panel adoption and intent.