Saving and subsidies for solar panel adoption in Nepal

Abstract

ABSTRACT Greater use of household solar-panel systems has the potential to improve energy access and affordability while reducing the risk of climate change. This article uses a survey of 6,000 households in Nepal, a developing economy, to enhance understanding of the factors driving solar-system uptake by households. A key contribution is the breadth of analysis. We find important influences for economic, social, and locational factors. In contrast, physical dwelling aspects, such as roof material, appear to be less important. Social influences explain extra variation in solar-panel uptake, when comparing social and economic influences, although some variables could be classified in multiple categories. For example, membership in a women’s saving and credit cooperative is a socioeconomic factor that is associated with greater solar-panel adoption. Socioeconomic factors may be the most important for future policy innovations, given that existing policy already focuses on location. For instance, this article finds that solar adoption has been much higher in the most supported regions for the Renewable Energy Subsidy Policy.