What Drives Renewable Energy Adoption in EU Countries? Evidence on the Differential Effects of Economic, Structural and Energy Factors

Abstract

The transition to renewable energy is a central objective of the European Union’s energy and climate policies, yet adoption rates differ significantly across Member States. This study analyses the economic, structural, and energy determinants of renewable energy adoption in the EU-27 over the period 2008–2023, using panel data models with country and year fixed effects and clustered standard errors. The results indicate that the relationship between renewable energy and its main determinants is limited and heterogeneous across countries. Most explanatory variables do not exhibit consistent and statistically significant effects across model specifications. In particular, research and development expenditure does not show a robust impact, while GDP per capita is associated with negative coefficients in several specifications, suggesting the presence of structural constraints and path dependency. Energy-related variables also display weak and unstable relationships. The findings suggest that renewable energy adoption is shaped by context-specific and heterogeneous dynamics rather than by uniform drivers. The study contributes by highlighting the limited explanatory power of standard macroeconomic indicators and supports the need for differentiated policy approaches across Member States.