What drives disparities in the diffusion of residential PV and battery systems? A spatial econometric analysis in the context of dynamic regulatory arrangements

Distributed PV plays an increasingly important role in the decarbonization of energy systems, yet its uneven patterns of diffusion may have implications for cost efficiency and distributional fairness. This paper investigates the drivers shaping the diffusion of small-scale, building-integrated PV systems (SBI-PV) and small-scale battery energy storage systems (S-BES) in Germany. A spatial econometric analysis was conducted by running consecutive cross-sectional regressions across 400 districts (i.e., NUTS-3,regions) spanning more than two decades, thereby assessing how the impact of drivers has been evolving under changing regulatory framework conditions. The study finds a highly relevant impact of endogenous interaction effects on SBI-PV diffusion, whereas interaction effects among error terms play a more important role in S-BES diffusion. The findings also show how several exogenous drivers can be connected either to the presence of single- and two-family homeowners (STFHO) and/or to socioeconomic and attitudinal factors (e.g., foreign population, age, income, education, political inclinations), which affect the capability and inclination to adopt such technologies. In contrast, drivers related to cost-efficient deployment patterns, such as spatial differences in PV generation potential and local power demand, appear to play a minor role. Finally, the paper discusses how regulatory changes may enhance the future deployment of SBI-PV and S-BES in terms of cost efficiency and distributional fairness.