ANALYSIS OF THE FACTORS INFLUENCING THE INSTALLATION OF SOLAR HOT WATER HEATERS IN HOMES (ENERGY, TAX CREDIT, ECONOMETRIC, PROBIT)

Policy-makers have mandated tax incentives at both the federal and state level in order to encourage the use of solar energy for household water heating. The influence of these credits, and current energy costs, on the probability of solar installation has not been analyzed at the household level. This analysis examines the influence of education, income, the level of the tax credit, energy costs, concern about the energy problem, pro-solar attitudes, and solar radiation availability. Results indicate that energy costs and the tax credit are important factors in the decision to install solar. Individuals with more than a high school education have a higher probability of installation. Net present value analyses indicate that tax credits may be higher than necessary in several western states to encourage solar installation in all-electric homes.

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