The world could be entering an era of carbon neutral, decentralised electricity production; fuelled by plummeting prices of solar photovoltaic systems, and the empowerment of property owners and small-scale investors. The entry of individual homeowners poses however challenges for the further diffusion of photovoltaics, as they are likely to bring new mechanisms onto the power market; whether it be “folk” ways of economic reasoning and risk evaluation, or if it implies higher transaction costs due to small-scale investments and increased difficulties of obtaining and processing information.
The aim of this study is to enter the everyday nitty-gritty of being a prospective small-scale solar electricity producer in Sweden. By collecting interview data from market actors and industry experts, as well as survey data from the municipal energy advisors, a picture of the contemporary landscape for domestic photovoltaic electricity production is drawn.
The findings emphasise notions from innovation system theory–that a range of issues inflict uncertainty on a novel technology, and thereby barriers against its diffusion; most noticeably in this study due to complicated and short-term legislation, perceived technical complexity, difficulties predicting economic performance, as well as troubles finding and selecting suppliers.
To gain legitimacy on the Swedish residential PV market, a web tool, which intends to aid homeowners prior to an investment with economic and technical calculations, is prototyped and presented. Three checklists are made to guide homeowners step-by-step: to find and select installer, estimate yield, and orientate in the legislation.
Swedish policy makers are advised to simplify and ensure a long-term legislative framework. To reduce the abstraction perceived by homeowners, firms are recommended to develop business models, which could include service of the technical equipment, electricity yield guarantees, and administrative work.
It is ultimately concluded that legitimation of a novel technology, in general, could be strengthened by establishing several functions: accessible and continuously updated information sources, standard ways of calculating profitability, simplified legislative frameworks, as well as marketplaces or functions to help consumers find and select suppliers. These aspects become increasingly important when the consumer group consist of individuals (rather than firms), and early in a diffusion process when peer effects remain small.
© ERIK WALLNÉR 2015
Full report available here.