The objective of this thesis is to understand how changes in electricity prices influence household investment decisions in solar photovoltaic (PV) installations. By analyzing data from 2016 to 2022 at the municipal level, the study examines the impact of both variable and fixed three-year electricity price contracts on the installation of solar PV systems among Swedish households.The results provide valuable insights for policymakers, investors, and other stakeholders seeking to promote sustainable energy transition. Understanding how households base their investment decisions on electricity prices can contribute to the development of effective strategies to encourage solar PV installations.The findings indicate a statistically significant relationship (p<0,01) between both types of contracts and the installed solar PV capacity. An increase of 0,01 krona in electricity prices is associated with a 4,754 W increase in installed capacity per single-family house for variable price contracts and a 2,692 W increase for fixed three-year contracts. However, it is worth noting that the fixed three-year contracts exhibit a certain level of unreliability, making thevariable price contracts more suitable as the explanatory variable. Moreover, the study reveals that households show some degree of present bias when making solar PV investments.