Something new under the sun. A spatial econometric analysis of the adoption of photovoltaic systems in Italy

This paper analyses factors that determine the adoption of photovoltaic systems (PV) in Italy. We employ a spatial econometric approach applied to province-level data for 2015-2021 to identify the main determinants of PV adoption and to gauge both the potential bias deriving from spatial dependence and the spillover effects affecting neighboring areas in PV diffusion. We test different spatial econometric models and different types of economic, social and demographic variables. We add new regressors to consider the role of housing market dynamics (volume of sales and price of transaction) as a possible driver of PV adoption. We find that the housing market and electricity consumption are important positive determinants of PV adoption, whereas social capital and socio-demographic indicators do not provide statistical evidence of being major drivers of PV adoption. We confirm that other economic factors, like average income, can explain PV diffusion, whereas solar irradiation does not show to play a critical role. We do not find an important role of policies on energy efficiency and renewable energy in the housing sector, but our data timeframe covers a period after the very high incentives from the ‘Conto Energia’ and, at the same time, prevents us from observing the possible effects of the ‘Superbonus 110’ introduced in 2021. Moreover, our findings indicate that spatial dependence exists between neighboring areas in PV adoption, suggesting that spatial econometric models can be robust empirical approaches for interpreting PV deployment in studies at the regional or sub-regional level.