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The impact of solar subsidies on California's non-residential sector

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  • Frey, Elaine F.
  • Mojtahedi, Saba

Abstract

Understanding how policies can be used to induce technological change, specifically in the area of renewable energy, is crucial for reaching environmental goals. This paper examines the impact of subsidies from the California Solar Initiative (CSI) on non-residential adoption of solar panels. We find evidence that firms do respond to higher solar subsides by increasing their intensity of solar energy. A 10% increase in the subsidy amount leads to an increase in solar capacity by between 1.36% and 2.55%. In addition, although peer effects seem to play an important role in solar adoption decisions, we do not find evidence of peer effects in the intensity of adoption. Both of these findings add a unique perspective to the growing literature on solar energy. This study is also of interest to policy makers who must understand the benefits and costs associated with higher subsidies for inducing technology adoption.

Suggested Citation

  • Frey, Elaine F. & Mojtahedi, Saba, 2018. "The impact of solar subsidies on California's non-residential sector," Energy Policy, Elsevier, vol. 122(C), pages 27-35.
    • Handle: RePEc:eee:enepol:v:122:y:2018:i:c:p:27-35
    DOI: 10.1016/j.enpol.2018.07.020
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    Cited by:

    1. Liu, Da & Liu, Yumeng & Sun, Kun, 2021. "Policy impact of cancellation of wind and photovoltaic subsidy on power generation companies in China," Renewable Energy, Elsevier, vol. 177(C), pages 134-147.
    2. Best, Rohan & Burke, Paul J., 2023. "Small-scale solar panel adoption by the non-residential sector: The effects of national and targeted policies in Australia," Economic Modelling, Elsevier, vol. 120(C).
    3. Tang, Songlin & Zhou, Wenbing & Li, Xinjin & Chen, Yingchao & Zhang, Qian & Zhang, Xiliang, 2021. "Subsidy strategy for distributed photovoltaics: A combined view of cost change and economic development," Energy Economics, Elsevier, vol. 97(C).
    4. Yu-Ling Hsiao, Cody & Ai, Dan & Wei, Xinyang & Sheng, Ni, 2021. "The contagious effect of China’s energy policy on stock markets: The case of the solar photovoltaic industry," Renewable Energy, Elsevier, vol. 164(C), pages 74-86.
    5. Reindl, K. & Palm, J., 2021. "Installing PV: Barriers and enablers experienced by non-residential property owners," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    6. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    7. Pedro I. Hancevic & Hector H. Sandoval, 2023. "Solar Panel Adoption in SMEs in Emerging Countries," Working Papers 222, Red Nacional de Investigadores en Economía (RedNIE).
    8. Fan, Lurong & Ma, Ning & Zhang, Wen, 2023. "Multi-stakeholder equilibrium-based subsidy allocation mechanism for promoting coalbed methane scale extraction-utilization," Energy, Elsevier, vol. 277(C).

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