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 aspects of the international response to the threats of global warming. However, the diffusion of solar photovoltaic panels (SPPs) shows strict dependence on public incentive support. We apply diffusion models to SPP adoptions (26 countries between 1992 and 2016) to identify the temporal profile of the major domestic shocks in SPP markets whilst focusing on the role of public interventions in influencing the scale and shape of SPP adoption curves. The results show that the SPP market started in all countries considered without the assistance of a strong innovation component so that its initial lifecycle was essentially sustained by imitation. The largest part of its market growth, however, resulted from massive positive shocks that occurred between 2007 and 2016, possibly attributed to incentive measures. These public incentives were often poorly 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, indicate the emergence of an addiction to incentive phenomenon and, therefore, a deleterious role of expectations.