Profits or preferences? Assessing the adoption of residential solar thermal technologies

Solar thermal technologies offer the potential to meet a substantial share of residential water and space heating needs in the EU, but current levels of adoption are low. This paper uses data from a large sample of German households to assess the effects of geographic, residence, and household characteristics on the adoption of solar thermal water and space heating technologies. In addition, the impact of solar thermal technology adoption on household energy expenditures is estimated after controlling for observed household heterogeneity in geographic, residential, and household characteristics. While evidence is found of moderate household energy expenditure savings from combined solar water and space heating systems, the findings generally confirm that low in-home energy cost savings and fixed housing stocks limit the diffusion of residential solar thermal technologies. Little evidence is found of differential adoption by distinct socio-economic groups.