Lawrence Berkeley National Laboratory

Entrepreneurs in certain industries tend to locate new businesses in relatively affluent areas. Preferences to site businesses in affluent areas can reduce low-income household access to certain products. Some argue that business siting patterns could explain inequitable consumption patterns, though such causal claims are often empirically weak. Here, we explore whether business siting patterns partly explain inequitable adoption of rooftop solar photovoltaics in California. We show that solar business formation drives an immediate and sustained increase in local solar adoption, including in low-income areas. However, solar business siting patterns have only weak impacts on solar adoption equity. The data show how solar businesses headquartered in low-income areas nonetheless install solar for relatively affluent customers. Customer-level adoption inequity partly offsets the potential equity gains of siting more businesses in low-income areas. We discuss how the emergent nature and unique business model of rooftop solar help explain these nuanced results.