Social interactions and the adoption of solar PV: evidence from cultural borders

This paper investigates the role of ‘social spillovers’ – people learning from and imitating the behaviour of other people – in the adoption of new technologies, with a focus on solar energy.

The researchers examined the influence of the centuries-old language border between the French and German-speaking parts of Switzerland on the uptake by households and businesses of solar photovoltaics (PV), following the implementation of a generous nationwide feed-in-tariff for solar PV that makes installation more financially attractive. They find that the language border has a negative impact on the uptake of solar PV: there are 20% fewer solar installations in the region close to the language border.

To further analyse the mechanisms at work, the study examines whether the magnitude of the border effect varies depending on the language skills of the population. The authors consistently find that the language border has less of an impact on the uptake of solar installations in locations where a relatively high proportion of inhabitants speak the language of the other side, and a much stronger effect where relatively few inhabitants speak the language of the other side, with less uptake of solar PV in these latter locations.

This result confirms that the language border acts as a barrier to social interactions and, eventually, to the adoption of new technologies. These findings are important for policymakers as understanding how the adoption of clean technologies spreads is crucial to guide policymaking in the effort to tackle climate change.

Key points for decision-makers

• This paper provides evidence that social spillovers play a very important role in the adoption of a new technology such as solar photovoltaics.
• The evidence suggests that the generous feed-in tariff that Switzerland implemented in 2008 to promote the generation of electricity from renewable sources is less effective in influencing households and businesses to install solar PV in locations where social interactions are lower.
• In line with the pre-existing literature, the authors relate social interactions to the opportunity to learn from, and imitate, other households that have already adopted a new technology.
• In municipalities where a relatively large proportion of people speak the language of the other side of the nearby French–German language border, the border has no statistically significant effect on solar installations.
• However, the border has a much stronger effect where relatively few inhabitants speak the language of the other side, inhibiting uptake of solar PV.
• The effect is very localised and tends to vanish once extending the analysis to a radius of 15km or more either side of the border.
• The results point to an underexplored benefit of teaching foreign languages at school.
• While this paper focuses on the strong language barrier between the French-speaking and the German-speaking parts of Switzerland, its results may also have implications for other cultural boundaries, for instance those related to race and ethnicity or religion. These could be the subject of future research.