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Solar power is contagious, study finds

People are more likely to install a solar panel on their home if their neighbours have one, according to a Yale and New York University study in the journal Marketing Science. 

The researchers studied clusters of solar installations throughout California from January 2001 to December 2011 and found that residents of a particular zip code are more likely to install solar panels if they already exist in that zip code and on their street.

“We looked at the influence that the number of cumulative adoptions—the number of people who already installed solar panels in a zip code—had on the probability there would be a new adoption in that zip code,” said Kenneth Gillingham, the study’s co-author and assistant professor of economics at the Yale School of Forestry & Environmental Studies. “Our approach controls for a variety of other possible explanations, including clustering of environmental preferences or marketing activity.”

They calculated that 10 extra installations in a zip code increase the probability of an adoption by 7.8 percent. If there is a 10 percent increase in the total number of people with solar panels in a zip code—the “installed base”—there will be a 54 percent increase in the adoption of solar panels.

“These results provide clear evidence of a statistically and economically significant effect,” said Bryan Bollinger, the other co-author and assistant professor of marketing at New York University Stern School of Business.

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