Association for Public Policy Analysis & Management

Local governments are relatively agile policy makers and can potentially make significant contributions to climate change mitigation through local legislation.  In addition to policies to reduce energy use (e.g. promoting walkable development), local governments can introduce policies that make it easier for households to generate emission-free electricity from solar photovoltaic (PV) panels installed on their own homes.  Streamlining permitting processes for solar PV can significantly reduce overall costs of installing the system (Burkhardt et al., 2015), and potentially reduce time and cost burdens on households.  Local financial incentives for solar PV systems can also significantly increase PV installations (Li and Yi, 2014), and several localities have joined networks such as ICLEI that provide tools and support for city governments working to increase sustainability across several dimensions.

Policies supporting residential solar are currently being reviewed in many jurisdictions due to the overwhelming success of solar PV incentive programs.  Now is a key time to determine which, if any, policies are most essential to preserve the appeal of solar PV.  This research examines the extent to which local legislation to promote installation of solar PV panels has been able to impact actual installation rates, relative to the impacts of state or federal policies and new ownership models.  Very few existing studies have examined the effects of local policies on installed solar at a city level, and none have considered the combined impacts of local policies and availability of third party ownership (TPO) models, including solar leasing and power purchase agreements.  TPO can significantly increase the predictability of returns on investment for households installing solar while decreasing upfront costs, and can open the market to new segments of the population (Drury et al., 2012). 

This study uses fixed effects modelling to examine cities in California.  Modelling will determine whether solar installations in cities rose significantly after the passage of local regulations including expedited permitting and financial incentives, whether installations increased after TPO became widely available in California, and whether there are interactions between these two areas.  To fill a gap in longitudinal data on local legislation to support PV, I utilize a combination of surveys, partial databases, and publicly available city-level information to build a complete picture of historical changes in relevant policies from 2003 to 2013.  The longitudinal approach used by the current research will show how newly implemented policies and TPO options changed local installation rates, and in turn will best inform local decision-makers which policies are instrumental for continuing to increase solar PV capacity.