2/29/24 – Why didn’t Uncle Phil and Aunt Viv go Solar?

Image source: Tesla

Solar energy is one of the most salient ways one can reduce one’s carbon footprint and often saves money on electric utility bills. However, access to solar panels is unevenly distributed by race, even for households with similar income. According to a 2019 Nature Sustainability study by University of California-Berkeley researchers, Black- and Hispanic-majority census tracts show significantly fewer solar installations when compared with no majority or White-majority census tracts. These results hold even after controlling for household income and homeownership, with Black- and Hispanic-majority census tracts being 61% and 45% less likely than no majority census tracts to own rooftop solar and White-majority census tracts being 37% more likely to install solar panels. The study focuses on measuring this access disparity and does not speculate on the cause.

While differences in solar panel access isn’t as severe an energy justice issue as energy poverty, it is still an important problem because solar panels have been shown to increase home values by 15–17% according to a 2017 Energy Economics study of home sales in Arizona by University of Maryland and University of International Business and Economics-China researchers. In 2024, based on the average Arizona home value, that would be a $60,000–70,000 premium on a $13,000 investment after federal tax credits. There are many potential reasons for this gap in solar panel access that one could hypothesize and measure, such as differences in credit scores (and the cost of financing home improvements, solar or otherwise) and wealth accumulation (and not income) across different racial groups. Note that employment rates are similar across all racial groups, although Black men are slightly less likely than other groups to be employed and much more likely to be incarcerated. The social fact of lower adoption of solar panels by Black- and Hispanic-households could also be the outcome of small differences in initial exposure to solar panel technology and the result of the process of technology diffusion in a community.

Because understanding how a system works is the first step to changing outcomes in a desired direction, it’s helpful to know how trends grow within a community. One of the earliest research papers on this topic was by Zvi Griliches who, in his 1957 Ph.D. dissertation at the University of Chicago, studied how new hybrid corn varieties were sold in Northern vs. Southern farms in the U.S. He noticed that there’s a predictable S-curve in the adoption of a new technology (in this case hybrid corn seeds) that could potentially be measured in order to forecast total market size for a technology.

Here’s Griliches’ formula:

P is the percentage of the market for expected sales, K is the total market size, and a is a constant of integration and b is a growth rate parameter.

To learn more about logistic differential equations, the Khan Academy has a good lecture on this topic. In most real-world business situations, it is extremely difficult to measure the market size of a new technology in the initial stages just from the data before a few percent (<10%) of the population has adopted it because of the huge uncertainties in identifying new customers, but quantitative marketers will try anyway.

These ideas were expanded upon and popularized many decades later by Everett Rogers, who as a communications and journalism professor and author of Diffusion of Innovations, focused more on the characteristics of the people who adopt innovations earlier and later in time rather than the math. He popularized the famous breakdown of markets in terms of a bell curve or ‘innovators’, ‘early adopters’, ‘early majority’, ‘late majority’, and ‘laggards.’ In some ways, the Rogers’ approach is no different than identifying trendsetters outside of technology — like in music or fashion — but it’s not always the case that ‘innovators’ play that role in every domain, whether technology, music, art, fashion, etc. A fun exercise for the reader is to self-identify in these groups for a particular trend, like when you got your first smartphone, when you started wearing wide leg jeans in current decade (for women) or straight leg jeans (for men), or whether you’re a top 40 fan or into indie artists.

Geoffrey Moore, the management consultant and author, expanded on these ideas in Crossing the Chasm and highlighted one of the main reasons that new products fail in the marketplace — there’s often a huge gap between reaching the ‘early adopters’ of a trend vs. reaching the ‘early majority.’ Early adopters are willing to make tradeoffs in functionality or pay higher prices and sacrifice in one area because they value some characteristic of the new technology very highly versus the early majority who will only adopt a new technology when it offers cost or productivity improvements.

So differences in solar access across races in the U.S. could be due to the fact that there simply isn’t enough representation of Blacks or Hispanics among the innovator and early adopter groups. These groups are largely self-selected. For new technologies, the innovators and early adopters tend to be engineers and their friends and family — it’s a core value of the ethical hacker-entrepreneur to test their own products or ‘eat their own cooking’. This is why it’s important for everyone to have access to the knowledge needed for scientific and technical careers like math at least at the pre-calculus level in high school (or calculus in college for engineers who want to pursue a graduate degree), whether or not any person of any race chooses to pursue engineering as a profession. Organizations like National Society of Black Engineers or Society of Hispanic Professional Engineers are safe spaces and supportive communities for engineers to connect with engineering leaders and for students to develop their leadership skills. There are also numerous other pathways into technical careers for those who don’t like math — like associates degrees or electrician apprentice programs recognized by unions like the International Brotherhood of Electrical Workers (IBEW) for working on the electrical grid or Laborers International Union of North America (LIUNA) for rooftop solar installers.

Engineers aren’t the only early adopters — tech journalists are often also a great knowledge source about new technologies. Leading Black tech journalists and influencers like Marques Brownlee play a significant role in spreading awareness and knowledge of new technologies. Solar access is also a finance issue and so leading Black personal finance journalists like Michelle Singletary play an influential role in teaching people how to build good credit and prepare to make large purchases. For solar technologies, another cohort of early adopters are environmentalists — the people who like recycling, composting, locally-grown food, and organic and natural materials for clothing, consumer products, and product packaging — and they’re not only engineers.

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