The Economics of Renewable Energy Expansion for Rural Households

Abstract

Cities’ energy consumption increases as they grow. Also, as cities aspire to become ”smart,” green solar and wind energy will play a critical role in achieving their objectives. Civilization has required continual transition in the world over time, and as a result, infrastructure must be continuously changed to keep up with demands. The current study is unique in that it presents valuable data that will help rural households enhance their understanding of how solar panels as renewable energy may affect household energy costs and empirical findings that will persuade households to replace electricity with solar energy. Thus, the key aim of this study is to analyze the moderating effect of socio-economic factors such as household size, average age, and household income between household energy cost and solar energy usage. A total of 180 households were selected for data collection through convenience sampling using a structured questionnaire. The renewable energy access was measured through binary variables with two values (0,1), and household energy cost was measured by taking the mean value of electricity bills for the last twelve months. Linear regression was applied for hypotheses testing. The study’s findings indicate that renewable energy access has a significant negative effect on household energy cost with a -0.712-beta value which depicts that using solar energy has 71.2 percent less energy cost for that household. Similarly, the demographic factors also have a significant moderating effect between renewable energy access and household energy cost, and all these findings are statistically significant. Therefore, based on empirical findings, the current study suggested that the authorities should promote the installation of solar panels on the roofs of future buildings, particularly public buildings and housing societies, to reduce energy costs and address environmental concerns.