WPCRESEARCH
Kelly Bishop crossing arms in front of her while smiling under solar panels in black short sleeve dress
Kelly Bishop
Associate Professor of Economics

The Hidden Hurdles
to Going Green?

A new model reveals why many homeowners delay investing in innovative, sustainable technology — and how policy could help bridge the gap.
Investing in energy-efficient housing technology such as solar panels, smart appliances, and green heating, ventilation, and air conditioning systems is better for the environment and your wallet. So why aren’t more homeowners adopting eco-friendly tech?

“There are many reasons, but one people often overlook is timing — someone may not invest in an energy-efficient feature today, but they’re willing to buy a house that already has it a few years later,” says Associate Professor of Economics Kelly Bishop. “So, people can bundle these decisions.”

Timing and trade-offs

Bishop, a microeconomist specializing in environmental, urban, and labor economics, partnered with student Ozgen Kiribrahim-Sarikaya (PhD Economics ’25) to create a cohesive model incorporating both ways a person can invest in energy-efficient housing technology: choosing a new home with green attributes, or changing the homes they already live in.

As more cities across the country push to adopt sustainable housing and technology initiatives, Bishop and Kiribrahim-Sarikaya’s model provides insights that can help policymakers understand how, when, and why households invest in energy-efficient technology while highlighting barriers to investing in green tech, including a lack of information on its benefits, investment-related risks, anticipation of lower prices in the future, and nonmonetary risks such as stress, time, and hassle.

While researching the adoption of solar panels in Arizona, Bishop and Kiribrahim-Sarikaya found that income is the No. 1 factor preventing homeowners from investing in it.

Income gaps in access

“Higher-income people are more likely to invest, possibly due to being less credit-constrained, which means they can pay up front for the installation cost,” Bishop says.

In Arizona, tax credits that go toward solar installation are not fully refundable if a household’s tax liability does not exceed the amount they could get back in the subsidy, which can lead to lower-income homeowners not receiving their tax refund. Because of this model, higher-income households receive more tax credits than those with lower incomes, decreasing investment-related risks for those in a higher income bracket.

Since a household’s income affects its ability to take advantage of solar-related tax credits, Bishop hopes their research provides helpful takeaways for policymakers considering sustainability initiatives. She credits part of the disconnect to engineers who don’t plan for the realities of being a homeowner, especially because many families don’t stay in their homes long enough to reap the financial benefits of an investment.

Someone may not invest in an energy-efficient feature today, but they’re willing to buy a house that already has it a few years later.
— Kelly Bishop
Associate Professor of Economics
“Are their savings going to be realized? Will a future buyer pay for this?” asks Bishop. “There are a lot of issues with exposing yourself to risk.”

And even for those who can afford the initial investment in green housing technology, there are barriers: a lack of information on the technology and resources available for homebuyers, such as audits of a home’s energy cost, and risks related to future energy cost increases and subsidy changes.

As Arizona continues to prioritize sustainable initiatives, Bishop and Kiribrahim-Sarikaya’s research offers insight into the many factors influencing a homeowner’s decision to invest in energy-efficient housing technology regardless of the long-term environmental and fiscal benefits.

“It’s a hugely complicated problem for the homeowner to think about all of the related costs and benefits,” says Bishop.

— Molly Loonam
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