Addressing Biases that Impact Homeowners' Adoption of Solar Panels

11 Pages Posted: 12 Apr 2021

See all articles by Howard Kunreuther

Howard Kunreuther

National Bureau of Economic Research (NBER); University of Pennsylvania - Wharton Risk Management and Decision Processes Center

Anna Polise

University of Pennsylvania

Quinlyn Spellmeyer

University of Pennsylvania

Date Written: April 9, 2021

Abstract

Solar power is now economically competitive with fossil fuels in many countries, yet relatively few homeowners have installed solar panels on their property. A principal reason for this behavior stems from cognitive biases—such as myopia, inertia and herding—that cause consumers to avoid investing in long-term measures, even those that are financially attractive to them and produce social benefits such as reducing the long-term consequences of climate change. A behavioral risk audit can demonstrate ways to address these cognitive biases, in concert with short-term economic incentives and social influences. We focus on the installation of solar panels, an issue that has relevance to residents in the United States and the European Union, and to property owned by businesses and governments.

Keywords: climate change, solar energy, solar power, cognitive biases, myopia, behavioral risk audit

JEL Classification: H31,Q42,Q54

Suggested Citation

Kunreuther, Howard C. and Kunreuther, Howard C. and Polise, Anna and Spellmeyer, Quinlyn, Addressing Biases that Impact Homeowners' Adoption of Solar Panels (April 9, 2021). Available at SSRN: https://ssrn.com/abstract=3823268 or http://dx.doi.org/10.2139/ssrn.3823268

Howard C. Kunreuther (Contact Author)

National Bureau of Economic Research (NBER)

University of Pennsylvania - Wharton Risk Management and Decision Processes Center ( email )

3819 Chestnut Street
Suite 130
Philadelphia, PA 19104
United States
215-898-4589 (Phone)

Anna Polise

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Quinlyn Spellmeyer

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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