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Perceived cost the main factor discouraging household solar use

28 May 2021

  • Perceived ease of use, relative advantage of use, tech awareness, perceived behavioural control have positive impact 

By Ruwan Laknath Jayakody    Among the factors that have an impact on the decision to adopt the use of solar energy technology for household purposes, the perceived ease of use, the relative advantage of using such, awareness of the technology, and perceived behavioural control had a positive impact while the perceived cost had a negative impact, a study found. These findings were made by Ceylon Electricity Board (CEB) Electrical Superintendent (Energy Management) U.C. Bandara and T.S.M. Amarasena who is attached to the University of Sri Jayewardenepura, in an article published recently in the Vidyodaya Journal of Management titled “Factors Influencing Solar Energy Technology Adoption by Households in the Western Province”. Bandara and Amarasena note that in order to preserve the ecological balance of the planet, owing to the rapidly increasing energy demand and growing concerns pertaining to such, it is necessary to motivate users to opt for renewable energy sources and technologies. In this regard, Bandara and Amarasena point out that solar power, deriving from the sun's radiation, is an abundant and reliable energy source that is renewable and pollution free. Sustainable energy needs serious attention, Bandara and Amarasena add, as the energy cost is always rising, the human population is increasing, the environment is being polluted, and resources are being depleted. According to “Efficiency analysis of combined biomass and solar energy in Lithuania” (2013) by V. Katinas, J. Karbauskaite, E. Perednis, and R. Valancius, the International Energy Agency has estimated that in 2050, about 11% of the worldwide electricity production would be provided by solar energy. Sri Lanka’s annual average solar irradiation, Bandara and Amarasena mention, is in the range of 5.5 kilowatt hour (kWh) metres per day and is found throughout the year with low seasonal variations. According to the Department of Meteorology, solar irradiation that arrives at the ground level depends mainly on the day of the year, the latitude of the location, and on atmospheric transmittance, also termed as the clearness index. Since Sri Lanka is near the equator and is getting sunlight throughout the year without much seasonal variations, people, Bandara and Amarasena add, have the possibility of using solar energy throughout the year without interruption. According to the CEB, Sri Lanka is as of 2016, 98.4% electrified with grid electricity and they already have an electricity supply to energise their households and equipment. Therefore, Bandara and Amarasena note that introducing solar panels to the same consumer/user base will be a major challenge which however, as per the National Energy Policy of the Sustainable Energy Authority, must be addressed in order to face the upcoming energy crisis and for purposes of energy security. Devices that convert daylight without delay into power are called, Bandara and Amarasena explain, solar photovoltaics (PV) or solar cells. The conversion of light (photons) to electricity (voltage), is a physical technique referred to by M. Taylor, K. Daniel, A. Ilas, and E. Young in “Renewable power generation cost” (2014) as the “photovoltaic impact”. The average per capita electricity consumption increased to 540 units in 2014 from 519 units (kWh per person) in 2013. The total electricity sales increased from 10,621 gigawatt hours (GWh) in 2013 to 11,063 GWh in 2014. The average daily consumption of electricity in 2014 was 30.3 GWh while in 2013 it was 29.1 GWh. The trend of using renewable energy sources has increased with time to a considerable degree, Bandara and Amarasena observe, adding that solar power is the most common method used in terms of renewable energy sources. The installed capacity in megawatts as well as the number of solar connections, have, according to Bandara and Amarasena, increased. With the introduction of the net metering concept, the opportunity to produce electricity using renewable energy is possible even for small investors, Bandara and Amarasena note. Relative advantage, Bandara and Amarasena explain, is the degree and extent to which an innovation is perceived as better than the idea it supersedes or its closest alternative, and according to E.M. Rogers’ “Diffusion of Innovations” (1983), can be measured in economic and financial terms, social prestige and status factors, comfort and convenience, and satisfaction. The greater the perceived relative advantage of an innovation, the higher its rate of adoption, Rogers notes. However, as explained in “Social cognition” (1991) by S. Fiske and S. Taylor, if people strive towards relatively simple and heuristic methods of decision-making, it is plausible that not all innovation attributes are rated before making the decision to reject or adopt an innovation, and thereby a decision to adopt might be taken based on the little information processing. There is also, Bandara and Amarasena add, the consumers’ attitude and perception regarding the potential expectations about the innovation or the technology’s benefits. Relative advantage is positively related to the innovation’s rate of adoption, Bandara and Amarasena elaborate. The majority of the users, as explained by Bandara and Amarasena, consider renewable energy from an environmental perspective and the benefit for future generations. Perceived behavioural control is, according to I. Ajzen's “Residual effects of the past on later behaviour: Habituation and reasoned action perspectives” (2002) and C. Armitage and M. Conner’s “Efficacy of the Theory of Planned Behaviour: A meta analytic review” (2001), the degree and extent to which a person feels able to engage in a particular behaviour, with two key aspects in this regard being how much control a person has over his/her behaviour and how confident a person feels about being able to perform or not perform the said behaviour, and it is thereby determined by the individual’s beliefs regarding the power of both situational and internal factors to facilitate performing the said behaviour. As per R. Wiser and S. Pickle’s “Green marketing, Renewables, and Free Riders: Increasing Customer Demand for a Public Good” (1997), to switch between an alternative energy technology, consumers have to do a number of calculations regarding its cost, change in living standards, and changes to other socio-economic parameters. The attitude towards using, acts as a mediator between the behavioural intention to buy and the perceived ease of use and perceived usefulness, and the attitude towards behaviour therefore acts as a mediator between beliefs, evaluations, and behavioural intention, Bandara and Amarasena observe. Individual behaviours are not only impacted by the progressions of valuation and expectations but also by the belief of the technology, Bandara and Amarasena note. Ajzen opines that perceived behavioural control belief starts with the inner force of the individual, such as self-sufficiency while the outer force controls external conditions, and explains further that after a specific attitude is formed, people need to evaluate the higher relative advantage and higher perceived behavioural control. Ease of use can be defined, Bandara and Amarasena explain, as the degree to which users easily understand, operate, and maintain a new technology. M. Fishbein and I. Ajzen explain in “Belief, attitude, intention, and behaviour: An introduction to theory and research” (1975) that the ease of public use of renewable energy can be ensured by using an effective quality control mechanism and by understanding the living standards of the target group while A.H. Seyal and M. Rahim note in “A preliminary investigation of the electronic data exchange adoption in Bruneian small business organisations” (2006), that wider public support and the use of renewable energy are possible if users find the technology to be user friendly, family friendly, and identical to their standard of living, as the decision to implement new technology is based on its perceived ease of use. The users’ acceptance of new technology is based on their perceived ease of use which is influenced by the users’ opinion regarding the installation, the regular use, the maintenance, and the recycling of the new technology, Bandara and Amarasena add. The use of solar energy has, according to Bandara and Amarasena, numerous technical barriers to end users and as a result, mass users show unwillingness to invest in solar energy. J. Stephenson and M. Loannou point out in “Social acceptance of renewable electricity developments in New Zealand” (2010) that family and community-friendly renewable technology will positively influence the intention to use renewable energy. Also, Bandara and Amarasena mention that the usage policy and maintenance should be simple to understand. Awareness is, Bandara and Amarasena emphasise, the degree to which users are conscious of the current new technology and its benefits and weaknesses, and the extent to which they can keep track of the updates regarding new technologies. Therefore, creating awareness of the product is important to the customer, Fishbein and Ajzen note. The information gap makes the acceptance of new technology less likely, Bandara and Amarasena observe. Adoption can therefore be defined as the acceptance and continued use of a product, service, or idea, Bandara and Amarasena explain. According to E. Rogers and F. Shoemaker’s “Communications in Innovation” (2001), consumers go through a series of processes in knowledge, conviction, decision. and confirmation before they are ready to adopt a new product or service, and the adoption or rejection of an innovation begins when the consumer becomes aware of the innovation. In “Changes in consumer behaviour over the product life cycle” (2002), J. Howard and W. Moore stressed that in adoption, consumers must become aware of the new brand. Thus, more knowledgeable consumers are assumed to be more willing to adopt, Bandara and Amarasena explained. The cost of renewable energy incorporates, Bandara and Amarasena note, both a holistic outlook on the initial requirement to set up the machines as well as their periodic costs. According to the “Determinants of Electronic Data Interchange Adoption in the Transportation Industry” (1997) by G. Premkumar, K. Ramamurthy. and M.R. Crum, in terms of the cost of the technology, the higher its cost, the lower its value to the users, and the lower its rate of usage. Price and costs are one of the single-most important factors that influence consumer adoption of innovation, as if consumers are to use new technologies, the technologies must be reasonably priced relative to alternatives; otherwise, the acceptance of the new technology may not be viable from the standpoint of the consumer, Bandara and Amarasena point out. Seyal and Rahim found that there is a direct and significant relationship between the cost and the adoption of technology. Therefore, the higher the benefit-to-cost ratio, the positive the intention to switch to renewable energy (solar energy). Since the minimum investment required to install renewable energy can be higher, availing economic incentives to ease the financial burden from the users has been suggested as average users are reluctant to pay more than 5% when compared to their existing energy expenses on conventional energy, which is a negative attitude that may in turn reduce the users’ intention to switch to renewable energy, Bandara and Amarasena further observe. According to the Frankfurt School of Finance and Management’s “Global trends in renewable energy investment” (2012), in the adoption of solar energy technology from conventional energy technologies, a socially oriented process and an individual’s perception plays a vital role. The usage of technology is largely influenced by, as Bandara and Amarasena have point out, multidimensional forces such as regulatory, economic dimensions and societal forces. In this study, a simple random sampling technique was employed by Bandara and Amarasena, and the population was selected and drawn from the annual population statistics issued from the Western Provincial Council. This list of populations was sorted by the different local government bodies throughout the Western Province. They were randomly picked and the data were gathered. The main data collection tool of this study was a questionnaire survey. All households of the Western Province except for the ones which already use solar power were the target population. Due to the cost factor, the main target of the household was the employee or the person who spends on the house or its head. Only potential consumers have been considered for the survey. According to the Department of Census and Statistics, the total number of households in the Western Province is 1,466,488 (Colombo District – 566,524, Gampaha District – 598,420, and Kalutara District – 301,544). There are 40 divisional secretariat divisions (DSDs) in the Western Province (Colombo – 13, Gampaha – 13, and Kalutara – 14). The 40 DSDs have 566 grama niladhari divisions (GNDs). More than 1,000 questionnaires (350 each among the 13 DSDs in Colombo and Gampaha, and 300 among the 14 DSDs in Kalutara) were distributed randomly among Western Province households during a three-month period. A data set of 384 questionnaires was analysed. The questionnaire also comprised questions to measure the following constructs: relative advantage, perceived behavioural control, the perceived ease of use, the awareness of the technology, the perceived cost, and the intention to adopt. A five-point scale, which was categorised as one equals strongly disagree, two equals disagree, three equals neither agree nor disagree, four equals agree, and five equals strongly agree, was used to measure the domain of the constructs. When the relationship between the relative advantage and the intention to adopt solar energy was investigated, a positive influence and significant path was demonstrated from the perceived ease of use and the intention to use solar energy technology. Relative advantage was found by Bandara and Amarasena to be the second most important factor. Concerns regarding environmental benefits, environmental involvement and its benefits over individual benefits, the decrease of air pollution due to solar consumption, the decrease of the production of the carbon footprint, reducing pressure on energy production, and the competitive advantage to the country have an effect on solar energy adoption, Bandara and Amarasena explain. When the impact of perceived behavioural control on the intention to adopt solar energy technology was tested, the results suggested that the impact is positive and statistically significant and influential. This finding is consistent with the technology acceptance model and the diffusion of innovation theory of Rogers. However, perceived behavioural control, according to Bandara and Amarasena’s findings, is the least important factor. The impact of the perceived ease of use on the intention to adopt solar energy technology when tested, suggested that the impact is negative and statistically significant and influential. The greater the ease of use the new technology is perceived to have, the more likely it is to be adopted, according to Stephenson and Loannou. Therefore, Bandara and Amarasena stated that manufacturers and suppliers of solar energy can provide a simple and easy to use product. The perceived ease of use was found by Bandara and Amarasena to be the most important factor in adoption. Testing the impact of awareness on the intention to adopt solar energy technology, suggested that the impact is positive and statistically significant. This will, Bandara and Amarasena claim, increase the people’s concern due to the recalling power of the technology, recognition, and imaging. Having tested the impact of the perceived cost on the intention to adopt solar energy technology, the results suggested that the impact is negative and statistically significant. Perceived costs, Bandara and Amarasena note, reduce the intention to adopt solar technology, adding further that if the cost is high, the adoption of the technology will reduce. From a managerial perspective, these findings, Bandara and Amarasena emphasise, provide support for investment decisions for the investors who are interested in the green energy concept with the environment friendliness, as well as for decisions concerning the improvement of renewable energy, which could be taken into consideration for residential needs. Moreover, Bandara and Amarasena also propose that the Government, as a duty, should focus on alternative energy sources which can be catered for in the upcoming crisis, such as wind and geothermal.  


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