Risk Premium for Solar Energy: A Survey Study in Ankara, Turkey

As climate change emerges today as the biggest human made catastrophe ever, it is widely understood that dependency on fossil fuels should be decreased and share of renewables should be increased to significant levels. In this... [ view full abstract ]

As climate change emerges today as the biggest human made catastrophe ever, it is widely understood that dependency on fossil fuels should be decreased and share of renewables should be increased to significant levels. In this regard, solar energy arises as one of the most abundant, widespread and sustainable sources of energy. Despite the fact that solar energy sector is one of the fastest growing sectors of energy trade, its share in total energy consumption is still too far from effective levels. Higher accounting costs (valid for the time being), economic dislocation and social/cultural factors are some of issues forming a resistance toward widespread utilization of renewables.
Residential photovoltaic applications, with their advantages over central energy production (e.g. dispersed investments), have a crucial importance for widespread diffusion of solar energy technology and this study mainly aims to investigate preferences of households in Ankara (Turkey) for photovoltaic systems with their willingness to pay and find out clues to increase the motivation to install these systems. The study uses data from a household survey throughout Ankara to explore the relation between household characteristics and their preferences. The survey includes New Ecological Paradigm Scale to measure environmental concern and Self-Reported Proenvironmental Behaviour Scale to gather information about the behavioral patterns of the respondents. Demographic information and other household characteristics such as monthly income, household size, electricity consumption and general knowledge level on solar technologies have been collected to assess their relation with the preferences and make an approximate calculation of willingness to pay for photovoltaic systems using stated preferences data. The results of this study are expected to reveal some valuable input for policy makers to determine diffusion policies for photovoltaics; set subsidies, increase awareness etc