Access to Alternatives: Increasing Rooftop Solar Adoption With Online Platforms

Abstract

As of 2016, only 1.1% of U.S. rooftops had solar panels despite government subsidy support and falling hardware costs. In this paper, I estimate a structural model of the residential solar PV market using new detailed data on seller bids and consumer choices. The results illustrate that search/informational frictions are an important barrier to solar PV adoption for two reasons: (1) installers can charge higher markups and (2) consumers fail to connect with high-quality sellers in the market. Counterfactuals simulations show that solar PV adoption increases by 84% when buyers can solicit additional price quotes through an online platform.