What drives social contagion in the adoption of solar photovoltaic technology

Increasing the use of renewable energy is central to address climate change. Recent research has suggested the existence of social contagion in the adoption of solar panels, which may contribute to accelerate the transition to a low-carbon economy. While the existing literature has focused on residential adoption only, we extend the analysis to private firms and farms, and include solar panels with different characteristics. We exploit a unique large dataset providing detailed information on about 60,000 solar installations in Switzerland, including their specific location at the street level and details on the timing of the technological adoption, and couple it with rich socioeconomic data at the municipality level. Our detailed data allow us to adopt an empirical strategy addressing the main threats to identification associated with social contagion, including homophily and reflection. We find that households’ decisions to adopt the solar technology are dependent on pre-existing adoption, and in particular on spatially close and recent installations. Firms and farms solar PV adoptions react to neighboring PV panels, although in a lesser extent than households. Furthermore, companies are more influenced by panels installed by other companies, compared to panels installed by households. By distinguishing between building-integrated and building-attached PV systems and including capacity categories, we provide evidence that both learning and imitation are important components of social contagion. As a result, our findings provide new insights on the mechanisms of social contagion and how they could be leveraged with targeted interventions.