Solar energy on all suitable roof areas? Homeowners’ acceptance of government subsidies and smart energy services in Germany

Abstract Background Photovoltaic (PV) systems are nowadays a central pillar in the expansion of renewable energy in Germany. Nevertheless, further significant growth in renewable energy will be needed in the future to meet the national emission reduction targets set by the German government. Homeowners play a crucial role in the expansion of PV capacity. In a discrete choice experiment, we empirically examine the impact of a large number of dimensions on homeowners’ PV adoption, including attributes that have received less attention in the literature so far, such as the included (smart energy) services, government subsidies, and forms of financing. Results Our results show that increasing levels of smart energy services for PV systems increase respondents’ valuation of smart energy services, while increasing the access rights of the contractual partner has a negative impact on the valuation. The latter negative effect is mitigated by an element of co-determination. Furthermore, our results point to the importance of government subsidies as a measure to increase PV adoption. Participants preferred one-time (or continuous) payments over continuous (or one-time) payments when government grants amounted to 40% (or 10%) of the investment cost; they were indifferent between both forms when subsidies amounted to 20% of the investment cost. Homeowners clearly preferred loan financing to self-financing only at an effective interest rate of 1.03%, as opposed to 3.53%. This result indicates a limited effectiveness of this subsidy measure, which is designed to overcome the problem of high investment costs from a conceptual point of view. Our results also show that homeowners are not so heterogeneous when it comes to the importance they attach to certain attributes related to PV adoption. Decisions were made independent of socio-demographic characteristics, but are related in some cases to the homeowners’ value orientations and risk inclination. Conclusions Homeowners are more likely to adopt smart energy services when they are involved in the typically automated processes through decision prompts. Financial factors are of pivotal role. There is a need to tailor financing strategies, as preferences for subsidy schemes vary with the level of financing. In addition, low-interest loans are ineffective in reducing the high upfront costs of PV deployment. Smart energy services have great potential, but there are also some caveats.