The role of incentives' policies, word of mouth and "0$ marketing budget" in photovoltaic technology diffusion.

Abstract

Considering the increasing importance of green technologies today, I decided to analyze which are the mechanisms that underline their diffusion. In particular I analyzed a widespread green innovation, that is solar power technology. I mainly focused on incentives and word of mouth effect as drivers for the diffusion of this kind of technology. Starting from a global point of view, I focused on Italian photovoltaic market. Moreover I developed a mathematical model able to assess the importance of incentives' policies and peer effect in solar power technology diffusion rate. In the second part of my dissertation I described how word of mouth process has influenced the solar power adoption process and how the peer effect is present nowadays in one of the most innovative companies like Tesla. This company, through the strategy " 0$ marketing budget" is basing its marketing strategy almost entirely on costumers' positive experiences.