The Willingness to Pay for Residential PV Plants in Italy: A Discrete Choice Experiment

Abstract

PV energy generates economic and environmental benefits (e.g., energy cost-saving, GHG emissions reduction, etc.), which can be capitalized into market prices. There is, therefore, growing interest in assessing the value that PV systems add to solar homes (i.e., homes equipped with PV production plants) market prices. Although the number of solar homes has experienced rapid growth in Europe and Italy, literature investigating the impact of PV power plants on home values is still very limited. This paper aims to fill this gap. We implement a Discrete Choice Experiment (DCE) approach to estimate individuals’ WTP for different typologies of domestic PV plants, which vary in technical characteristics. Our findings show that homebuyers are willing to pay a price premium for solar homes, ranging from some 3% to some 15%, depending on PV panels’ characteristics. These results can provide a wealth of recommendations to different interested parties such as homeowners, homebuyers, realtors, and governments, seeking knowledge on the capitalization effect of residential PV plants on the housing market to implement cost-effective investment strategies or design optimal policy incentives.