Regional Differences in the Determinants of Residential Photovoltaic Expansion: A Spatial Econometric Analysis of Germany and Italy

Achieving net-zero emissions requires significant expansion of renewable energy sources. Among these sources, photovoltaic (PV) energy is particularly important. However, the factors driving regional PV expansion remain insufficiently understood, as existing models often overlook regional disparities and spillover effects. This study investigates regional residential PV expansion in Germany and Italy. By utilizing extensive spatial datasets encompassing socio-demographic, economic, and physical factors and citizen attitudes, we apply Spatial Econometric Models to analyze 3 million PV systems. Our findings reveal substantial regional variations in the determinants of PV adoption. A municipality-level case study confirms these results, demonstrating even stronger spatial effects on a finer spatial scale. This approach highlights that national feed-in tariffs may lead to suboptimal fund allocation by failing to address regional differences. The tailoring of national policies to local needs and the local PV expansion stages may enhance PV deployment effectiveness.