Berkeley Lab study explores supply-side barriers to solar adoption equity

Although there is growing interest in policies and programs to ensure that the benefits of solar power are equitably reaching households of all income levels, lower income households are still less likely to go solar.

Some of the causes for this are well-documented and unsurprising. For example, income is unequally distributed among households, and low and moderate income (LMI) households have less cash, are less able to finance installations, are less likely to own their home, and are less aware of the opportunity.

But we looked at a further possibility – that solar marketers are not trying as hard to sell to LMI households. If LMI households were more aggressively targeted by marketers, they would have higher awareness and might be more likely to go solar, despite the barriers. LMI can be defined in various ways; for the purpose of this study, we focus on households living in Census tracts with median incomes below 80% of the statewide median income.

Using data from a “solar quote platform” operated by Energy Sage, we checked to see where quote requests were coming from, based on neighborhood income levels. Quote platforms connect interested households with a network of installers who choose whether to submit quotes to specific customers. Our analysis was based on 663,740 quotes submitted to 192,970 customers in 36 states and Washington, DC.

We found a number of things.

1. LMI households are less likely to pursue PV adoption in the first place. Bid requests from Census tracts with income levels below the state median are about 16 percent lower than elsewhere.
2. Installers are less likely to pursue LMI customers. Customers in LMI tracts who do submit requests receive around 10 percent fewer quotes, on average, than customers in non-LMI tracts.
3. LMI customers are less likely to close the deal. Customers in LMI tracts are about 30 percent less likely to close deals than customers in non-LMI tracts when controlling for the number of quotes received. However, our analysis suggests that LMI customers would be more likely to close deals if they received a similar number of quotes as higher-income customers.

While much policy has focused on addressing the barriers that limit demand from LMI households and communities, there have been few if any similar efforts to encourage more supply. Some strategies could include offering marketers incentives to give more quotes to LMI customers, training marketers to understand the unique needs of LMI customers, and helping LMI customers navigate the solar adoption process.

The Berkeley Lab study, Income-targeted marketing as a supply-side barrier to low-income solar adoption, is published in the journal iScience, and is available for free download.

For questions on the report, feel free to contact Eric O’Shaughnessy at Lawrence Berkeley National Laboratory (720-381-4889, [email protected]) or Galen Barbose ([email protected]).

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