Abstract

In the last decade, feed-in tariffs have been the method of choice for policymakers trying to accelerate the diffusion of solar photovoltaics (PV). Despite the overall effectiveness of feed-in tariffs, actual adoption rates have shown surprising regional differences, pointing to the presence of peer influence and regional spillover effects. For future diffusion of photovoltaics, understanding these social influences on the decision to adopt is key. Several studies have used revealed preference approaches to discern peer effects in PV adoption, proving their existence but leaving open questions about underlying psychological mechanisms. We close this gap by conducting a survey among potential PV adopters in one of the top three fastest-growing European solar markets and find that two types of social norms, descriptive and injunctive norms and their underlying interplay, play an important role in explaining PV adoption decision and diffusion patterns. Our findings have significant policy implications – as an alternative to following the shotgun approach of uniform nationwide incentives, policymakers should consider inducing snowball effects by facilitating the creation of regional hot spots. Such programs, which may be supported through co-investments between federal and local authorities, would effectively complement existing policy approaches.