Strike While the Rebate Is Hot: Savvy Consumers and Strategic Technology Adoption Timing

28 Pages Posted: 17 Feb 2018

See all articles by D Cale Reeves

D Cale Reeves

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

Varun Rai

University of Texas at Austin - LBJ School of Public Affairs

Date Written: February 6, 2018

Abstract

The California Solar Initiative (CSI) rebate program disbursed more than two billion dollars in incentives to install solar photovoltaics (PV) over roughly a decade, and was implemented using “stepdowns” that decreased rebates as pre-determined installed capacity goals were reached. However, the exact dates (i.e., timing) of the step-down events were not known. Despite this, recent analyses find evidence of an “announcement effect” wherein consumer adoption is “pulled-forward” across these stepdown events. Using unique data from our recent household-level survey on the decision-making process for these very consumers, we compare the decision-making processes of pulled-forward consumers to their counterparts that adopt just after a rebate stepdown.

We examine and compare behavioral drivers of 194 residential PV adoptions within a narrow window of eight CSI rebate stepdown events, and find evidence that a sub-set of pre-stepdown adopters engage in more “savvy” decision-making behaviors from their post-stepdown counterparts, including strategic adoption timing. Given these behavioral differences, we conclude that future analyses should carefully consider aspects of individual decision-making processes as potential confounders and control for them if possible. Experience is identified as a potential pathway through which this non-negligible subset of adopters may gain the ability to execute savvy decision-making behaviors; future research should assess the degree to which policy implementation can explicitly leverage this pathway.

Keywords: solar photovoltaics, technology adoption, decision making, rebate pass-through, announcement effect, consumer behavior

Suggested Citation

Reeves, D Cale and Rai, Varun, Strike While the Rebate Is Hot: Savvy Consumers and Strategic Technology Adoption Timing (February 6, 2018). Available at SSRN: https://ssrn.com/abstract=3119133 or http://dx.doi.org/10.2139/ssrn.3119133

D Cale Reeves (Contact Author)

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

Varun Rai

University of Texas at Austin - LBJ School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

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