Peer Effects on Photovoltaics (Pv) Adoption and its Impact on Air Quality in Poland

The article studies the patterns of diffusion of residential rooftop photovoltaics (PV) systems in Poland and the effects of such technology on local air quality. First, I apply a panel econometric analysis to estimate the impact of peer effects. I lag the difference in time between a submitted PV installation request and installation completion, and I control for endogenous group formation and correlated unobserved variables with a set of fixed effects. Second, I use the difference-in-differences method to analyse the variability in exposure to treatment, i.e. an installed base in a particular area, to observe the effects of PV diffusion on air quality. I find that peer effects are important for the diffusion of PV systems, as adding one installation in the previous month increases the probability of a new PV adoption in the same area by an average of 0.06 pp. Next, I demonstrate that areas with PV installations present saw a decreased number of days in which PM10 emissions exceeded daily limits by 1.3 – 1.8 days per month, on average. My study has relevant policy implications as peer effects (1) allow for the creation of local networks of stakeholders that would enhance the diffusion of clean energy sources, and (2) create clusters of installations in well-developed regions, showing the need to intensify support efforts in underdeveloped areas