Date of Award

Spring 5-21-2016

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Kathy Krynski

Second Advisor

Kayla Arnold

Third Advisor

PJ Glandon

Abstract

Solar energy is a renewable energy source with unlimited potential. Solar technology takes energy from sunlight and converts it to electricity. Solar has become more popular in recent years as concern about climate change has increased, since solar energy is regarded as a clean energy source. It produces no CO2 emissions, which are said to contribute to the greenhouse effect and global warming. However, solar energy has not been cost-effective. It has been heavily subsidized in California in an effort to reach clean energy goals. In this paper, I wish to explore how the price of solar energy affects demand. I will focus on the residential market for solar in California, specifically the solar photovoltaic (PV) systems purchased by homeowners and put on their roofs. With this data, we can analyze the current incentive structure, explore what factors affect demand, and determine the elasticity of demand for residentially-owned solar PV systems. This will allow us to recommend policies aimed at maximizing solar energy demand to achieve clean energy goals.

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