Sunny days: Spatial spillovers in photovoltaic system adoptions

Highlights: • Spatial spillovers play an important role in residential PV adoption decisions. • Observing a neighboring PV installation increases future installation 16.5–17.1%. • Policymakers may use this multiplier to encourage small-scale solar generation. Spatial spillovers – peer effects from neighboring actions on one's own decisions – play an important role in the diffusion of technologies, particularly the adoption of residential photovoltaic (PV) systems and have important implications for renewable energy policies meant to encourage small-scale solar energy generation. Existing research notes spillovers manifest at large spatial scales but evidence at smaller scales is currently absent. In this work, we examine if spatial spillovers in residential PV system adoptions exist at small scales – specifically within one's nearest set of neighbors – using spatially explicit data on residential PV installations from Baltimore, MD. We find strong evidence for the existence of spatial spillovers, with a neighboring installation increasing PV system adoption likelihood by 16.5–17.1 percent. The results indicate the presence of a potential multiplier effect that can be targeted by policymakers interested in encouraging solar energy development to meet renewable energy goals.