Assessing the transaction costs of residential solar photovoltaic acquisition

Abstract

Generating electricity from solar photovoltaics (PVs) has massive potential, but realising this potential will require a genuine understanding of transaction costs associated with the adopters' acquisition of the technology. The objective of this study is thus to empirically assess the transaction costs that solar PV adopters carry when proceeding with an acquisition process. Data on transaction costs, expressed as time spent on 14 sub-tasks, for residential building-mounted PV systems in southern Sweden (acquired 2015–2021) were collected through online surveys targeting owners of single-family and multi-family buildings. The results show that the median time spent for the acquisition of PV was 45 h for single-family building owners, 36 h for multi-family building owners and 86 h for the multi-family housing cooperatives. However, the distribution of time spent on acquiring solar PV systems varies considerably, and several adopters spent >100 h on the process. The most time-demanding part of the acquisition process for single-family and multi-family building owners alike is the initial preparation task, which includes scoping information on feasibility and constructional and technical aspects, followed by the task of selecting and maintaining contacts with PV suppliers and installers. In all, the transaction costs reflect a low frequency, high asset specificity, as well as uncertainty associated with PV acquisition.