Access to Alternatives : Increasing Rooftop Solar Adoption With Online Platforms

Residential solar installation prices, which are set on a case-by-case basis, remain both relatively high and variable despite significant declines in solar panel manufacturing costs. In this paper, I estimate a structural model of the solar installation market to quantify market power and to evaluate the welfare effects of connecting buyers and sellers through an online platform. I find that the platform yields a $1,451 increase in consumer surplus by increasing the number of installation bids each household receives. Households with higher energy consumption attract relatively more bids and reap the largest benefits from the platform. Counterfactual simulations yield two main results: 1) an increase from one to five bids per project causes a 15.5% ($4,000) reduction in gross installation prices and a 33% increase in the number of solar installations, and 2) the solar Investment Tax Credit—which is scheduled to be eliminated in 2022—improves total welfare by mitigating market power in addition to reducing pollution externalities from electricity generation