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I Spot, I Adopt! Peer Effects and Visibility in Solar Photovoltaic System Adoption of Households

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  • Rode, Johannes
  • Müller, Sven

Abstract

We study variation of peer effects in rooftop photovoltaic adoption by households. Our investigation employs geocoded data on all potential adopters and on all grid-connected photovoltaic systems set up in Germany through 2010. We construct an individual measure of peer effects for each potential adopter. For identification, we exploit exogenous variation in two dimensions of photovoltaic system roof appropriateness of neighbors: their inclination and their orientation. Using discrete choice models with panel data, we find evidence for causal peer effects. However, the impact of one previously installed PV system on current adoption decreases over time. We also show that visible PV systems cause an increase in the odds of installing which is up to three times higher in comparison to all PV systems. At rural locations visibility may be less important, which indicates that word-of-mouth communication plays a stronger role.
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  • Rode, Johannes & Müller, Sven, 2020. "I Spot, I Adopt! Peer Effects and Visibility in Solar Photovoltaic System Adoption of Households," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 119280, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:119280
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/119280/
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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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