In Australia, diverse neighborhoods are passing on solar panels but are weirdly obsessed with heat pumps.
March 20, 2026
Original Paper
Ethnic Diversity and Small-Scale Renewable Energy Penetration: Implications for Australian Neighborhoods
SSRN · 6443484
The Takeaway
This research identifies a surprising 'substitution effect' where the demographic makeup of a neighborhood changes the specific type of green technology residents choose. It challenges the assumption that environmental adoption is driven purely by income or education, showing that cultural diversity shifts preferences between visible and invisible renewable technologies.
From the abstract
This study examines how ethnic diversity influences the adoption of small-scale renewable energy technologies across Australian neighborhoods. Using postcode-level panel data from 2006–2021, we address endogeneity with multiple instrumental variable estimators, including mean-based IV and instrumental quantile regressions (IVQR). The results indicate that greater ethnic diversity reduces the uptake of solar photovoltaics (PVs) and solar water heaters but increases the adoption of air-source heat