Disentangle the price dispersion of residential solar photovoltaic systems

Evidence from Germany

authored by: Tobias Kraschewski, Tim Brauner, Maximilian Heumann, Michael H. Breitner
Abstract: Although Germany has the largest capacity of installed residential photovoltaic (PV) systems in Europe, comprehensive evidence on transparent pricing information remains missing. This study disentangles why PV quote prices are subject to significant dispersion and analyzes which factors influence particularly low- and high-priced systems in Germany. We create a comprehensive cross-sectional dataset of 19 561 PV system quotes from 2011 to 2022 and use regression analyses to investigate the effects of system characteristics, installation scope, and location-related parameters on quoted prices. Our results reveal highly volatile annual price dispersion consistent over 11 years and large price differences despite similar system characteristics. Applying hedonic regression techniques, we reveal spatially fine-resolved price heterogeneity with up to 20 % difference in the German PV market. System characteristics such as battery usage, installation scope, and system capacity have the most significant effect sizes and are instead control variables. More insightful, the installer density shows price-lowering effects, whereas more PV installations per region, higher solar radiation, and higher labor wages cause price-increasing effects. Quantile regression results reveal that installer density promotes the price reduction of high-priced systems more. Scaffolding, AC installation, and elevation are significant price-increasing factors but with small effect sizes. Finally, DC optimizers affect the levels of high-priced systems more than low-priced ones.
Organisation(s): Institute of Computer Science for Business Administration
Institute of Economic Policy
Type: Article
Journal: Energy economics
Volume: 121
ISSN: 0140-9883
Publication date: 05.2023
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: Economics and Econometrics, General Energy
Sustainable Development Goals: SDG 7 - Affordable and Clean Energy
Electronic version(s): https://doi.org/10.1016/j.eneco.2023.106649 (Access: Open)