First, a small correction: Protestant faith has 10% reduced idea cost as opposed to technology cost. This is still pretty powerful bonus, as there are very few other ways to reduce the idea cost, and it's typically not very difficult to keep abreast with technological developments if you are in a Christian-following technology group.
Let's list the properties of each denomination of Catholicism first:
- Tolerance of the True Faith: +1 (i.e. -1 revolt risk in the province of your own faith)
- Tolerance of Heretics: -1 (i.e. +1 revolt risk in provinces of other Catholic denominations)
Apart from these bonuses, you also have a possibility in participating in Papal politics -- controlling cardinals and ultimately the Curia itself.
Controlling cardinals confer small, but appreciable bonuses to prestige, legitimacy, papal influence and even technology cost. The Papal controller also gets an additional diplomat, larger advisor pool, additional leader slot, more papal influence and prestige. On top of that, the Papal controller can dissolve royal marriages without a stability hit, can excommunicate catholic rulers and can call crusades (until 1650). Pretty significant laundry list of bonuses, to be sure -- only if you play and win the Papal game.
- National Tax Modifier: +10% (a moderately powerful boost)
- Idea costs: -10%
Switching the state religion confers also a significant lump sum of cash, as well as a heavy stability hit. Apart from that, there's not much additional benefits for protestant nations.
- Trade Efficiency: +10% (interesting choice only if you are trade-oriented)
- Advisor Pool: +1 (one additional advisor to choose from)
Similar to Protestant, you receive a substantial amount of money upon switching, together with reduced stability.
If you are a minor nation, it's going to be difficult to have more than one or at most two cardinals in the Curia at any given time, and becoming the Papal controller is probably a pipe dream. So, if you can't compete with the big boys and everybody else around has converted, it might be a good idea for you to do that too.
Countries in the Germanic, Scandinavian, British and West Slavic culture groups are much more likely to switch religion than others; conversely, Latin and Iberian cultures are much less likely to do so. If you play Bohemia, for example, it will be virtually impossible not to switch to Protestantism.
If you are the Catholic Defender of Faith and/or control the Curia, spontaneous conversion of provinces cannot occur[verification needed].
Other minor factors also control how often provinces switch, like whether you have or not Religious or Innovativeness ideas.
If you are determined to stay Catholic but a lot of your provinces start to switch, wait for the Counter-Reformation event, which fires around 20 years after the start of the Reformation. If you take the decision, you will receive additional missionaries and increased missionary strength, at the cost of slightly increased future technology expenditures.
Be advised that switching religions is going to be a tremulous time for your realm: expect events reducing stability and increased revolt activity for a number of years. Don't take the decision unless a sizeable portion of your nation has flipped or if you are in a precarious position (overextended, targeted by a coalition, depleted manpower pool).
- If you have Germanic, Scandinavian, West Slavic or British culture and are not powerful enough to consistently control the Curia, it's probably best to switch.
- If you are trade-oriented or a republic, switching might be best for you too.
- If you are a pious Catholic from France, Iberia or Italy, the Defender of Faith or control the Curia, stay catholic.
- If you are determined to stay Catholic in the face of significant province switching, consider embracing the Counter-Reformation.