SESS PROJECT REPORT

To study the factors influencing consumer to adapt

a solar installation

SECTION A GROUP NO 1

ABHISHEK LANJEWAR PGP/23/002

AJAY BOYAT PGP/23/003

G KARTHIKEYAN PGP/23/015

GOPIKA RADHAKRISHNAN PGP/23/016

PRASHANT YADAV PGP/23/037

PRIYA SABLEY PGP/23/038

Introduction ................................................................................................................................ 2
Literature Review....................................................................................................................... 3
Hypothesis.................................................................................................................................. 4
Methodology .............................................................................................................................. 4
Sampling: ............................................................................................................................... 4
Questionnaire ............................................................................................................................. 5
Analysis of the responses ........................................................................................................... 6
Conclusion ................................................................................................................................. 8
Introduction
It has been well established that global warming is not a myth anymore since the negative
effects of climate change are becoming well too apparent. Fourth industrial revolution is not
helping the accelerating depletion of natural resources either. Therefore, to address this
concern, businesses are beginning to modify their ways of operations and societies are also
becoming more concerned with the natural environment. They are choosing green practices
like use of solar energy etc. to have minimal detrimental impact on the environment. According
to International Energy Agency (2011), solar energy has many technological applications like
solar photovoltaics, solar hot water and concentrated solar power.

With the Jawaharlal National Solar Mission (2015), India is planning to farm 100 GW+ of solar
power by 2022. We have achieved 14 GW solar installation base by the end of 2017 and its
cumulative solar photovoltaic installation base was 23 GW as of mid-2018. The advantage of
promoting solar panel use is due to the tropical climate of some regions in India which means
more energy can be harnessed through sun’s radiation. For the purpose of this study, we are
restricting ourselves to only Maharashtra state where Maharashtra I solar power plant is
operational with a nameplate capacity of 67 MW.

It is believed that individual consumers’ segment can’t be neglected as it will be playing a

crucial role in the future in ensuring the survival of solar industry, therefore, the focus of this
study is to find if there is a correlation between intentions of purchasing behaviour of an
individual and influence of government support/subsidies/initiatives and derive some insights
from it. Apart from this we will also study factors like cost, maintenance cost/effort, social
influence, environmental concern etc. and try to come up with some incentives to spur the
growth of the industry.

With help of Depth interview with some of the participants we identified a few sets of concerns
which were government subsidy and bureaucracy, Cost, Maintenance, Social Influence
Environmental concern, Installation efforts and Aesthetics. These were factors which were
identified will be understood in depth using a survey and analysing the degree of influence by
each of the factor.

Even with all the promotions to use clean sources of energy such as solar energy, wind energy
and hydropower etc., the full-scale use of these are still very much at infancy stage. The shift
to cleaner energy sources can only be driven by various technical, financial and institutional
constraints. Despite the government’s effort to encourage solar panel usage, several factors are
affecting the solar photovoltaic industry, most crucial of them might be the barriers to the
adoption of domestic solar panel because of human resistance to change and acceptance of the
solar technology. These barriers may prove to be the bottleneck that affect the growth of this
industry in India.

Literature Review
Theory of Reasoned Action (1975) or TRA by Fishbein and Ajzen’s has been basis of various
consumer behaviour studies main aim was to forecast and gain insight into individual’s
intention to purchase i.e. to point out which factor drives consumer to buy concerned product
or service. According to Gotschi et al. (2010) and Ng et al. (2009), TRA is a great theory to
predict green purchase behaviour. For example, Abdul Wahid et al., 2011 applied TRA to
explain factors influencing the green purchase behaviour.

While applying TRA it is important to check whether current scenario / product met the three
assumption of TRA theory. First, consumers are assumed to evaluate the impact of their actions
before they make decision to perform or not of a specific behaviour. Second, consumers are
assumed realistic individuals and would make efficient use of information accessible to them.
Third, purchase intention is assumed to be totally under consumer’s control (Fishbein & Ajzen,
1975). According to TRA, beliefs are the antecedent of attitude and subjective norms.
Consequently, both attitude and subjective norms determine behavioural intention and then
actual behaviour. Similar to TRA, Diffusion of Innovation Theory (DIT) is further extension
to study which help to understand the adoption of new product / technology. But this DIT study
is out of scope of current research and can be done in future.

Nik Abdul Aziz et.al. studied the factor influencing the consumer intention to purchase green
energy (solar panel) found out that only four variables, perceived cost and maintenance,
product knowledge and experience, social norms and product benefits show direct impacts on
consumers’ solar panel purchase intention which was consistent with the previous research.
But their study also shows insignificant relation with perceived government policies which is
in consistent with past studies.

Various socioeconomic factors involved in the adoption of solar-energy technologies were

considered by Sparrow (1977). However, the small and geographically diverse sample presents
difficulties. Thus, region-specific differences in both consumer attitudes and relative
importance of decision criteria would be expected. Cesta and Decker (1978) in an exploratory
survey, chose a sample of individuals which include users, manufacturers and suppliers. They
identified factors such as product cost, extent of government support, product quality, cost of
energy, and publicity concerning solar systems which have positive or negative correlation
with sale of the solar product.

Hypothesis
Following the literature, in country like India, government support for green energy is given
state-wise. Depending on the region and geographical factor state budget varies. The extent to
which this factor influence also varies. In order to study the influence of government
support/subsidies/initiatives this study will be restricted to only one India.

With help of Depth interview with some of the participants we identified a few sets of concerns
which were refined. These were factors which were identified will be understood in depth. We
started with following assumptions

There is no impact of government support/subsidies/initiatives on consumer buying behaviour

of solar products

There is no impact of cost on consumer buying behaviour of solar products

There is no impact of maintenance cost/effort on consumer buying behaviour of solar products

There is no impact of social influence on consumer buying behaviour of solar products

There is no impact of environmental concern on consumer buying behaviour of solar products

There is no impact of installation efforts on consumer buying behaviour of solar products

There is no impact of aesthetics on consumer buying behaviour of solar products

Methodology
Sampling:
This study is correlational and it is done in non-contrived settings. Survey was created using
Google form and data was collected. Random sampling was used to get responses. Sampling
size was determined based on number of variables. Since in literature, advised number of
respondents is 20 x number of variables.

With help of Depth interview with some of the participants we identified a few sets of concerns
which were government subsidy and bureaucracy, Cost, Maintenance, Social Influence
Environmental concern, Installation efforts and Aesthetics. These were factors which were
identified will be understood in depth using a survey and analysing the degree of influence by
each of the factor.
The questionnaire was divided into subsections to collect consumer demographic profile and
all seven variables to be measured. All the responses were measured in Likert-type scale; 1 for
strongly disagree to 5 for strongly agree.

We have incorporated question which are inverse of the related factors to avoid people
responding casually.

Questionnaire
Government initiative

• Government subsidy played an important role in buying a solar rooftop

• The effort to get the application form, fill it in and post it would prevent me from
adopting solar product

Cost

• Solar panels are very expensive preventing many to buy it

• I would be willing to pay much higher prices to protect the environment.
• It is very difficult to switch electricity tariffs, and this would prevent me from
adopting

Maintenance effort

• Solar products require a lot of maintenance

Social influence

• My friends and relatives are adopting solar products, that is why I want to buy one

Environmental concern

• When I use green electricity in my household, I reduce air pollution. When I use
green electricity in my household, I fight climate change.
• The seriousness of environmental problems is exaggerated by environmentalists

Installation efforts

• Solar rooftops are difficult to install

Aesthetics

• It is important that solar products should be presentable.

• Solar products should not reduce aesthetic value of my house
Analysis of the responses
Out of all the responses obtained only 24.72% of the respondents had solar panel installed
while the rest 75.28% did not. This data is of the more privileged class so the actual data
would be far lesser if we calculate for the whole population of the country. The reason for not
installing the solar panel as mostly stated by the respondents were:

• Solar panels and other solar products are more expensive as compared to the
conventional products.

• It is difficult to switch electricity tariffs, which would prevent people from adopting it.

• Living in a rented home or quarters.

• Too many forms to fill and people are unaware of the process and the subsidies being
provided by the government.

• Solar products require a lot of maintenance.

• Installation of a solar panel requires lot of effort.

The people who have installed the solar panels at their homes were majorly due to social
factors, Government’s efforts and environmental concern.

• Friends, relatives and people in the social circle are adopting solar products.

• The subsidies provided by the government.

• People are often willing to spend much higher prices to protect the environment.

Solar Panels installed at home

25%

75%

Yes No
 Factors that prevent people from adopting Solar on a 5 point likert scale
3.5
3
2.5
2
1.5
1
0.5
0

Factors that prevent people from adopting Solar on a 5 point likert scale

This chart represents the average of the ratings provided by the respondents. As seen by the
chart people are not impacted by the cost of maintenance, aesthetics of the products or how
they reduce the aesthetics of their house or the difficulty of installation of the panels. Factors
like Installation by people in the social circle positively impacts them.

These reasons were analysed by multilinear regression on the four categories of reasons. These
categories were cost and maintenance of the solar panel, Social influence factors, Difficulty
and Government related factors and Environment factors, with the reasons mentioned above.

Furthermore, the results of multilinear regression of the responses showed that when we see
social factors, reasons like solar panels should be presentable or adding aesthetic value to the
house were negatively correlated to installation of panel while installation of solar panels by
friends, relative and other people in the social circle positively impacted the installation.

Government subsidies played a positive role in the adoption of the solar panels while some
factors like intense paperwork and lack of knowledge of the process, difficulty to switch
electricity tariffs and the intense paperwork required to get the solar panel prevented people
from adoption.

We have seen a positive response in the environmental factors, people feel more responsible
and feel that they contribute to the environment by installing solar panels or switching to the
more non-conventional and environment friendly ways. However, people are not willing to pay
the premium price that the solar panel installation requires and so some external help or
government subsidies help in this regard.

Conclusion
The people are aware of the harm that we cause to the environment and feel that solar and other
environmentally friendly energy sources need to be adopted and the new generation is more
aware of the problem as shown by the demographics of the result. But at the same time people
are not willing to pay the price that installation of solar panels requires. So, the subsidies
provided by the government plays an important role. Also, people are not aware of the existing
subsidy schemes being provided by the government so the government need to spread
awareness regarding the same.
References
Kumar, V., Hundal, B. S., & Kaur, K. (2019). Factors affecting consumer buying behaviour of solar water
pumping system. Smart and Sustainable Built Environment.

Aggarwal, A. K., Syed, A. A., & Garg, S. (2019). Factors driving Indian consumer’s purchase intention
of roof top solar. International Journal of Energy Sector Management.

Qader, I. K. A., & Zainuddin, Y. (2010). Intention to Purchase Green Electronic Products: The
Consequences of Perceived Government Legislation, Media Exposure and Safety &Health Concern
and the Role of Attitude as Mediator. International Journal of Innovation, Management and
Technology, 1(4), 432.

Labay, D. G., & Kinnear, T. C. (1981). Exploring the consumer decision process in the adoption of solar
energy systems. Journal of consumer research, 8(3), 271-278.

Aziz, N. S. N. A., Wahid, N. A., Sallam, M. A., & Ariffin, S. K. (2017). Factors Influencing Malaysian
Consumers' Intention to Purchase Green Energy: The Case of Solar Panel. Global Business and
Management Research, 9(4s), 328-346.

Azizan, S. A. M., & Suki, N. M. (2013). Consumers’ intention to purchase green product: Insights from
Malaysia. World Applied Sciences Journal, 22(8), 1129-1134.

Hartmann, P., & Apaolaza-Ibáñez, V. (2012). Consumer attitude and purchase intention toward green
energy brands: The roles of psychological benefits and environmental concern. Journal of business
Research, 65(9), 1254-1263.