When households go solar : determinants of uptake of a photovoltaic scheme and policy insights

Abstract

The need to reduce dependence on fossil fuels has resulted in escalating interest in renewable energy generation. Yet few countries have seriously tested household potential to produce energy from PV panels. Propelled by mandatory EU targets for renewable energy, and constrained with limited territory, the Government of Malta launched a subsidy scheme with a view to encouraging PV installation by households. The scheme reached the desired adoption levels within a very short period of time. The study takes an entire-country dimension to assess the determinants of household investment in PV panels. A unique dataset is specifically constructed for this study. We find that the prevalence of younger households, higher incomes, dwelling ownership and unshared roof space results in higher rates of uptake. Neither higher educational levels nor the participation in other environmental schemes (recycling) contribute any explanatory power to uptake of PV panels. Pro-government sentiment (captured by voting outcomes) significantly and positively influences the take-up of the grant and installation of PV panels. We conclude by identifying some pointers for policy makers interested in harvesting the potential of households.