It’s All Local? How Sub-State Policies Affect Western US Residential Solar Adoption

Abstract: This paper adds to the literature by investigating whether municipal, county, and utility policies drive residential solar photovoltaic (PV) adoption. While previous studies have investigated the effects of state policies, none have do so while including policies at the sub-state level. I employ spatial econometric techniques, which recently have been used to empirically account for the peer effects and spatial clustering that have been found in residential markets. Results from the largest residential solar market in the US suggest that after controlling for solar resource, environmental preference, and other demographic information, the local policies are an important driver in the residential solar PV market: the average solar policy stimulates a 6.0-7.9% percent increase in installed residential capacity. Further, the residential market exhibits a moderate amount of spatial autocorrelation