Diffusion of Renewable Energy Technology on Spanish Farms: Drivers and Barriers

Abstract

[Abstract] The aim of this paper is to identify the drivers and barriers of on-farm adoption of renewable energy systems (RES) in Spain and to determine how the existing mix of policies (subsidies, regulation and communication) affected the decisions of the farmers. The analysis is based on the results of a national survey that was completed by 719 farmers, representing the main types of farms and production regions. Statistically significant correlations have been observed between the probability of on-farm RES adoption and variables such as the use of contract farming, interest in new technologies and risk tolerance. Findings suggest that the diffusion of on-farm RES was at an early stage. Farmers are hesitant to adopt RES because the level of economic and regulatory uncertainty is perceived as too high in relation to the return and payback time typical of RES investments. Tailored business models and financing solutions should be implemented and promoted to overcome the described issues. Furthermore, relevant and reliable information should be available within farmers’ most common professional networks such as cooperatives and farmers’ associations. These aspects should be combined or even prioritized over providing direct economic incentives when producing on-farm RES supporting policies.