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Title: Rules of the rooftop: Platform design and price reductions in an online solar photovoltaic marketplace in the United States

Abstract

Residential solar photovoltaic (PV) customers typically obtain price quotes directly from installers, a process with high consumer search costs that enable price dispersion and can discourage adoption. Recently, however, customers are increasingly shopping for PV using third-party online platforms that make it easier to obtain and compare quotes from multiple installers. While early evidence indicates that these platforms make the PV market more transparent and lower prices, the literature suggests that market outcomes are critically linked to detailed aspects of platform design. In this study, we econometrically analyze a unique dataset of quotes offered in the online PV marketplace EnergySage to investigate how four changes to the platform design have influenced quote prices and transaction prices. We find that the largest reductions in quote prices ($0.11/ W) and transaction prices ($0.15/W) were associated with the introduction of a price guidance information feature for installers. While educating and informing customers has repeatedly emerged as a policy priority for bolstering PV markets, these results suggest that the same should be true on the supply side. We also find that customers are willing to pay higher transaction prices for systems with higher-quality panels, dispelling concerns that online PV marketplaces lead to a 'racemore » to the bottom' phenomenon by emphasizing price at the expense of quality.« less

Authors:
; ; ;
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Solar Energy Technologies Office (EE-4S)
OSTI Identifier:
1482897
Report Number(s):
NREL/JA-6A20-72194
Journal ID: ISSN 2214-6296
Grant/Contract Number:  
AC36-08GO28308
Resource Type:
Journal Article: Accepted Manuscript
Journal Name:
Energy Research and Social Science
Additional Journal Information:
Journal Volume: 48; Journal Issue: C; Journal ID: ISSN 2214-6296
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
14 SOLAR ENERGY; 29 ENERGY PLANNING, POLICY, AND ECONOMY; solar energy; pricing; platform design; consumer search

Citation Formats

Leibowicz, Benjamin D., Punjabi, Kunal, O’Shaughnessy, Eric, and Margolis, Robert. Rules of the rooftop: Platform design and price reductions in an online solar photovoltaic marketplace in the United States. United States: N. p., 2019. Web. doi:10.1016/j.erss.2018.10.010.
Leibowicz, Benjamin D., Punjabi, Kunal, O’Shaughnessy, Eric, & Margolis, Robert. Rules of the rooftop: Platform design and price reductions in an online solar photovoltaic marketplace in the United States. United States. doi:10.1016/j.erss.2018.10.010.
Leibowicz, Benjamin D., Punjabi, Kunal, O’Shaughnessy, Eric, and Margolis, Robert. Fri . "Rules of the rooftop: Platform design and price reductions in an online solar photovoltaic marketplace in the United States". United States. doi:10.1016/j.erss.2018.10.010.
@article{osti_1482897,
title = {Rules of the rooftop: Platform design and price reductions in an online solar photovoltaic marketplace in the United States},
author = {Leibowicz, Benjamin D. and Punjabi, Kunal and O’Shaughnessy, Eric and Margolis, Robert},
abstractNote = {Residential solar photovoltaic (PV) customers typically obtain price quotes directly from installers, a process with high consumer search costs that enable price dispersion and can discourage adoption. Recently, however, customers are increasingly shopping for PV using third-party online platforms that make it easier to obtain and compare quotes from multiple installers. While early evidence indicates that these platforms make the PV market more transparent and lower prices, the literature suggests that market outcomes are critically linked to detailed aspects of platform design. In this study, we econometrically analyze a unique dataset of quotes offered in the online PV marketplace EnergySage to investigate how four changes to the platform design have influenced quote prices and transaction prices. We find that the largest reductions in quote prices ($0.11/ W) and transaction prices ($0.15/W) were associated with the introduction of a price guidance information feature for installers. While educating and informing customers has repeatedly emerged as a policy priority for bolstering PV markets, these results suggest that the same should be true on the supply side. We also find that customers are willing to pay higher transaction prices for systems with higher-quality panels, dispelling concerns that online PV marketplaces lead to a 'race to the bottom' phenomenon by emphasizing price at the expense of quality.},
doi = {10.1016/j.erss.2018.10.010},
journal = {Energy Research and Social Science},
number = C,
volume = 48,
place = {United States},
year = {Fri Feb 01 00:00:00 EST 2019},
month = {Fri Feb 01 00:00:00 EST 2019}
}

Journal Article:
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