Examining the Influence of Solar Panel Installers on Design Innovation and Market Penetration

Abstract

This work uses an agent-based model to examine how installers of photovoltaic (PV) panels influence panel design and the success of residential solar energy. It provides a novel approach to modeling intermediary stakeholder influence on product design, focusing on installer decisions instead of the typical foci of the final customer (homeowners) and the designer/manufacturer. Installers restrict homeowner choice to a subset of all panel options available, and, consequentially, determine medium-term market dynamics in terms of quantity and design specifications of panel installations. This model investigates installer profit-maximization strategies of exploring new panel designs offered by manufacturers (a risk-seeking strategy) versus exploiting market-tested technology (a risk-averse strategy). Manufacturer design decisions and homeowner purchase decisions are modeled. Realistic details provided from installer and homeowner interviews are included. For example, installers must estimate panel reliability instead of trusting manufacturer statistics, and homeowners make purchase decisions based in part on installer reputation. We find that installers pursue new and more-efficient panels over sticking-with market-tested technology under a variety of panel-reliability scenarios and two different state scenarios (California and Massachusetts). Results indicate that it does not matter if installers are predisposed to an exploration or exploitation strategy—both types choose to explore new panels that have higher efficiency.