What do adoption patterns of solar panels observed so far tell about governments’ incentive? Insights from diffusion models

The fast worldwide spread of renewable energies is one of the key ingredients of the international response to the threats of global warming and climate change. However, the diffusion of solar photovoltaic panels (SPP), the only renewable energy technology currently available to households, shows a strict dependence from the support of public incentive. By upgrading previous research relying upon data up to 2006, in this paper we apply diffusion models to an extended dataset on SPP adoptions (26 countries between 1992-2016) for identifying the temporal profile of the major domestic shocks in SPP markets, mostly occurred after 2007, while focusing on the role of public interventions in influencing scale and shape of SPP adoption curves. Results show that the SPP market started everywhere without the assistance of continued public media support, so that its initial lifecycle was essentially sustained by word-of-mouth communication, while almost everywhere the largest part of market growth resulted from massive positive shocks occurred between 2007 and 2016, possibly due to incentive measures. Our findings also suggest that, though necessary, these public incentives were often badly designed, resulting in late, short-term, responses to external stimuli, such as the cogent pressure of international deadlines, in the absence of a well-established long-term plan. The limited temporal persistency of public actions, causing the market to be dominated by incentive-forced waves followed by negligible post-incentive adoptions, would indicate the emergence, at least in some countries, of an “addiction to incentive” phenomenon, and therefore a deleterious role of expectations.