Economic and social utility of installing photovoltaic systems on affordable-housing rooftops: A model based on the game-theory approach

Abstract

Due to the needed transition to a low-carbon economy, the cutback in dependency on fossil fuels will depend, among other things, on how much renewable electricity can be produced by photovoltaic (PV) systems, which require huge surfaces. This emphasizes the importance of using building rooftops. The current study examines the viability of installing PV systems on rooftops of affordable-housing buildings in Israel. To plan and optimize PV system installation projects, we analyze the determinants of process efficiency, detect planning difficulties, and consider the actions needed to enhance the welfare of various types of stakeholders (“players”). Using game-theory tools, these players are identified on the basis of fifteen semi-structured interviews that allow us to analyze their key and supporting roles and to define the parameters of their utility functions. The “game” is analyzed as both simultaneous and serial, and its outcomes show that the potentially crucial key player is the Ministry of Construction and Housing (MOCH), which may choose between leasing the rooftops or purchasing the systems. Due to the positive externalities of installing PV systems, the project serves as a social, energy, and economic engine for low-socioeconomic-status tenants. Analysis of the model in the case study shows that, on average, every transfer of 10% of PV system income to tenants will reduce household energy expenditure by 4.6% of gross household income, thus alleviating energy poverty while strengthening trust and cooperation among all players.