Transitioning from illegal rooftop dwellings to solar PV: Market-based incentive design and techno-economic analysis

Abstract

Renewable energy plays a crucial role in achieving net-zero emissions. As an island with a high population density, Taiwan has increasingly favored rooftop solar photovoltaic (PV) systems over ground-mounted installations due to land-use competition. However, illegal rooftop dwellings in urban areas pose significant obstacles to renewable energy deployment. This study proposes a market-based incentive scheme for rooftop solar adoption to encourage property owners to shift away from illegal rooftop dwellings. We construct market supply curves for illegal rooftop rental housing based on real-world rental data and conduct a techno-economic analysis to examine the required government subsidy. The results provide empirical evidence for an important nonlinearity in the supply curves, implying that linearity-based policy frameworks may not be effective in achieving optimal results. We also identify that opportunity costs linked to rental loss constitute a substantial portion of total costs, deterring the owners from adopting the shift. The findings indicate that the existing feed-in-tariff policy is inadequate to incentivize property owners to deploy rooftop solar panels. The proposed scheme embraces the three dimensions of sustainable development—economic, social, and environmental, which could benefit cities worldwide with illegal rooftop structures.