IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v58y2016icp590-607.html
   My bibliography  Save this article

An economic impact analysis of state solar incentives for improving financial performance of residential solar photovoltaic systems in the United States

Author

Listed:
  • Lee, Minhyun
  • Hong, Taehoon
  • Koo, Choongwan

Abstract

Although the global new renewable energy (NRE) market has shown remarkable growth during the past decade, NRE policies and incentive schemes should continue to support NRE market and to achieve NRE targets from the long-term perspective. In particular, solar policies and incentive schemes still remain vital to the deployment of the residential solar photovoltaic (PV) system in the United States (U.S.) due to its high initial investment cost. The previous study conducted an economic and environmental assessment of the residential solar PV system considering state solar incentives in the U.S.; however, it did not suggest any improvement scenarios for state solar incentives. To solve this limitation, this study aimed to conduct an economic impact analysis of state solar incentives for improving financial performance of residential solar PV systems in the U.S. Towards this end, this study established 16 scenarios for improving state solar incentives and quantified cash incentive rates for each scenario which can satisfy the threshold performance levels in the U.S. As a result, this study could suggest more suitable tax incentives and cash incentive rates for achieving the economic feasibility of the residential solar PV system in each target city of the U.S.

Suggested Citation

  • Lee, Minhyun & Hong, Taehoon & Koo, Choongwan, 2016. "An economic impact analysis of state solar incentives for improving financial performance of residential solar photovoltaic systems in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 590-607.
    • Handle: RePEc:eee:rensus:v:58:y:2016:i:c:p:590-607
    DOI: 10.1016/j.rser.2015.12.297
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032115016809
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2015.12.297?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sawhney, Rapinder & Thakur, Kaveri & Venkatesan, Bharadwaj & Ji, Shuguang & Upreti, Girish & Sanseverino, John, 2014. "Empirical analysis of the solar incentive policy for Tennessee solar value chain," Applied Energy, Elsevier, vol. 131(C), pages 368-376.
    2. Burns, John Edward & Kang, Jin-Su, 2012. "Comparative economic analysis of supporting policies for residential solar PV in the United States: Solar Renewable Energy Credit (SREC) potential," Energy Policy, Elsevier, vol. 44(C), pages 217-225.
    3. Sarzynski, Andrea & Larrieu, Jeremy & Shrimali, Gireesh, 2012. "The impact of state financial incentives on market deployment of solar technology," Energy Policy, Elsevier, vol. 46(C), pages 550-557.
    4. Mayr, Dieter & Schmid, Erwin & Trollip, Hilton & Zeyringer, Marianne & Schmidt, Johannes, 2015. "The impact of residential photovoltaic power on electricity sales revenues in Cape Town, South Africa," Utilities Policy, Elsevier, vol. 36(C), pages 10-23.
    5. Ismail, Abdul Muhaimin & Ramirez-Iniguez, Roberto & Asif, Muhammad & Munir, Abu Bakar & Muhammad-Sukki, Firdaus, 2015. "Progress of solar photovoltaic in ASEAN countries: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 399-412.
    6. Croucher, Matt, 2010. "Optimal Deployment of Solar Index," The Electricity Journal, Elsevier, vol. 23(9), pages 75-81, November.
    7. Reichelstein, Stefan & Yorston, Michael, 2013. "The prospects for cost competitive solar PV power," Energy Policy, Elsevier, vol. 55(C), pages 117-127.
    8. Swift, Kenton D., 2013. "A comparison of the cost and financial returns for solar photovoltaic systems installed by businesses in different locations across the United States," Renewable Energy, Elsevier, vol. 57(C), pages 137-143.
    9. Shrimali, Gireesh & Jenner, Steffen, 2013. "The impact of state policy on deployment and cost of solar photovoltaic technology in the U.S.: A sector-specific empirical analysis," Renewable Energy, Elsevier, vol. 60(C), pages 679-690.
    10. Kumar Sahu, Bikash, 2015. "A study on global solar PV energy developments and policies with special focus on the top ten solar PV power producing countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 621-634.
    11. Comello, Stephen & Reichelstein, Stefan, 2016. "The U.S. investment tax credit for solar energy: Alternatives to the anticipated 2017 step-down," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 591-602.
    12. Hong, Taehoon & Koo, Choongwan & Kwak, Taehyun, 2013. "Framework for the implementation of a new renewable energy system in an educational facility," Applied Energy, Elsevier, vol. 103(C), pages 539-551.
    13. Coffman, Makena & Wee, Sherilyn & Bonham, Carl & Salim, Germaine, 2016. "A policy analysis of Hawaii's solar tax credit," Renewable Energy, Elsevier, vol. 85(C), pages 1036-1043.
    14. Ahmad, Salman & Tahar, Razman Mat & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Rahim, Ruzairi Abdul, 2015. "Role of feed-in tariff policy in promoting solar photovoltaic investments in Malaysia: A system dynamics approach," Energy, Elsevier, vol. 84(C), pages 808-815.
    15. Jung, Jinho & Tyner, Wallace E., 2014. "Economic and policy analysis for solar PV systems in Indiana," Energy Policy, Elsevier, vol. 74(C), pages 123-133.
    16. Nevin, Rick & Watson, Gregory, 1998. "Evidence of rational market valuations for home energy efficiency," MPRA Paper 35343, University Library of Munich, Germany.
    17. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    18. Koo, Choongwan & Hong, Taehoon & Lee, Minhyun & Kim, Jimin, 2016. "An integrated multi-objective optimization model for determining the optimal solution in implementing the rooftop photovoltaic system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 822-837.
    19. Li, Hui & Yi, Hongtao, 2014. "Multilevel governance and deployment of solar PV panels in U.S. cities," Energy Policy, Elsevier, vol. 69(C), pages 19-27.
    20. Dusonchet, L. & Telaretti, E., 2015. "Comparative economic analysis of support policies for solar PV in the most representative EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 986-998.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Volodymyr Babich & Ruben Lobel & Şafak Yücel, 2020. "Promoting Solar Panel Investments: Feed-in-Tariff vs. Tax-Rebate Policies," Manufacturing & Service Operations Management, INFORMS, vol. 22(6), pages 1148-1164, November.
    2. Hong, Taehoon & Koo, Choongwan & Oh, Jeongyoon & Jeong, Kwangbok, 2017. "Nonlinearity analysis of the shading effect on the technical–economic performance of the building-integrated photovoltaic blind," Applied Energy, Elsevier, vol. 194(C), pages 467-480.
    3. Pereira da Silva, Patrícia & Dantas, Guilherme & Pereira, Guillermo Ivan & Câmara, Lorrane & De Castro, Nivalde J., 2019. "Photovoltaic distributed generation – An international review on diffusion, support policies, and electricity sector regulatory adaptation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 30-39.
    4. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.
    5. de Oliveira, Lucas Guedes & Aquila, Giancarlo & Balestrassi, Pedro Paulo & de Paiva, Anderson Paulo & de Queiroz, Anderson Rodrigo & de Oliveira Pamplona, Edson & Camatta, Ulisses Pessin, 2020. "Evaluating economic feasibility and maximization of social welfare of photovoltaic projects developed for the Brazilian northeastern coast: An attribute agreement analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    6. Simsek, Yeliz & Mata-Torres, Carlos & Guzmán, Amador M. & Cardemil, Jose M. & Escobar, Rodrigo, 2018. "Sensitivity and effectiveness analysis of incentives for concentrated solar power projects in Chile," Renewable Energy, Elsevier, vol. 129(PA), pages 214-224.
    7. Nguyen, Ly & Kinnucan, Henry W., 2019. "The US solar panel anti-dumping duties versus uniform tariff," Energy Policy, Elsevier, vol. 127(C), pages 523-532.
    8. Jiehui Yuan & Wenli Yuan & Juan Yuan & Zhihong Liu & Jia Liao & Xunmin Ou, 2023. "Policy Recommendations for Distributed Solar PV Aiming for a Carbon-Neutral Future," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    9. Bai, Bo & Wang, Yihan & Fang, Cong & Xiong, Siqin & Ma, Xiaoming, 2021. "Efficient deployment of solar photovoltaic stations in China: An economic and environmental perspective," Energy, Elsevier, vol. 221(C).
    10. La Monaca, Sarah & Ryan, Lisa, 2017. "Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling," Energy Policy, Elsevier, vol. 108(C), pages 731-741.
    11. José Claudio Isaias & Pedro Paulo Balestrassi & Guilherme Augusto Barucke Marcondes & Wesley Vieira da Silva & Carlos Henrique Pereira Mello & Claudimar Pereira da Veiga, 2021. "Project Portfolio Selection of Solar Energy by Photovoltaic Generation Using Gini-CAPM Multi-Criteria and Considering ROI Covariations," Energies, MDPI, vol. 14(24), pages 1-21, December.
    12. Hong, Taehoon & Lee, Minhyun & Koo, Choongwan & Jeong, Kwangbok & Kim, Jimin, 2017. "Development of a method for estimating the rooftop solar photovoltaic (PV) potential by analyzing the available rooftop area using Hillshade analysis," Applied Energy, Elsevier, vol. 194(C), pages 320-332.
    13. Elie, Luc & Granier, Caroline & Rigot, Sandra, 2021. "The different types of renewable energy finance: A Bibliometric analysis," Energy Economics, Elsevier, vol. 93(C).
    14. Lee, Minhyun & Hong, Taehoon & Jeong, Jaewook & Jeong, Kwangbok, 2018. "Development of a rooftop solar photovoltaic rating system considering the technical and economic suitability criteria at the building level," Energy, Elsevier, vol. 160(C), pages 213-224.
    15. Lee, Minhyun & Hong, Taehoon & Jeong, Kwangbok & Kim, Jimin, 2018. "A bottom-up approach for estimating the economic potential of the rooftop solar photovoltaic system considering the spatial and temporal diversity," Applied Energy, Elsevier, vol. 232(C), pages 640-656.
    16. Fikru, Mahelet G., 2019. "Electricity bill savings and the role of energy efficiency improvements: A case study of residential solar adopters in the USA," Renewable and Sustainable Energy Reviews, Elsevier, vol. 106(C), pages 124-132.
    17. Herath, N. & Tyner, W.E., 2019. "Intended and unintended consequences of US renewable energy policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    18. Lee, Minhyun & Hong, Taehoon & Yoo, Hyunji & Koo, Choongwan & Kim, Jimin & Jeong, Kwangbok & Jeong, Jaewook & Ji, Changyoon, 2017. "Establishment of a base price for the Solar Renewable Energy Credit (SREC) from the perspective of residents and state governments in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1066-1080.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Minhyun & Hong, Taehoon & Yoo, Hyunji & Koo, Choongwan & Kim, Jimin & Jeong, Kwangbok & Jeong, Jaewook & Ji, Changyoon, 2017. "Establishment of a base price for the Solar Renewable Energy Credit (SREC) from the perspective of residents and state governments in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1066-1080.
    2. Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part one – Review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1379-1393.
    3. Pereira da Silva, Patrícia & Dantas, Guilherme & Pereira, Guillermo Ivan & Câmara, Lorrane & De Castro, Nivalde J., 2019. "Photovoltaic distributed generation – An international review on diffusion, support policies, and electricity sector regulatory adaptation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 30-39.
    4. Yoo, Hyunji & Hong, Taehoon & Jeong, Kwangbok & Ji, Changyoon, 2018. "Estimation of the optimal government rebate for promoting the photovoltaic system in multi-family housing complexes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 720-728.
    5. Koo, Choongwan & Hong, Taehoon & Jeong, Kwangbok & Ban, Cheolwoo & Oh, Jeongyoon, 2017. "Development of the smart photovoltaic system blind and its impact on net-zero energy solar buildings using technical-economic-political analyses," Energy, Elsevier, vol. 124(C), pages 382-396.
    6. Monica Castaneda & Sebastian Zapata & Andres Aristizabal, 2018. "Assessing the Effect of Incentive Policies on Residential PV Investments in Colombia," Energies, MDPI, vol. 11(10), pages 1-17, October.
    7. Dobrotkova, Zuzana & Surana, Kavita & Audinet, Pierre, 2018. "The price of solar energy: Comparing competitive auctions for utility-scale solar PV in developing countries," Energy Policy, Elsevier, vol. 118(C), pages 133-148.
    8. Jägemann, Cosima & Hagspiel, Simeon & Lindenberger, Dietmar, 2013. "The Economic Inefficiency of Grid Parity: The Case of German Photovoltaics," EWI Working Papers 2013-19, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    9. An, Jongbaek & Lee, Minhyun & Yeom, Seungkeun & Hong, Taehoon, 2020. "Determining the Peer-to-Peer electricity trading price and strategy for energy prosumers and consumers within a microgrid," Applied Energy, Elsevier, vol. 261(C).
    10. Jia, Teng & Dai, Yanjun & Wang, Ruzhu, 2018. "Refining energy sources in winemaking industry by using solar energy as alternatives for fossil fuels: A review and perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 278-296.
    11. Coffman, Makena & Wee, Sherilyn & Bonham, Carl & Salim, Germaine, 2016. "A policy analysis of Hawaii's solar tax credit," Renewable Energy, Elsevier, vol. 85(C), pages 1036-1043.
    12. Flowers, Mallory E. & Smith, Matthew K. & Parsekian, Ara W. & Boyuk, Dmitriy S. & McGrath, Jenna K. & Yates, Luke, 2016. "Climate impacts on the cost of solar energy," Energy Policy, Elsevier, vol. 94(C), pages 264-273.
    13. Lazzeroni, P. & Olivero, S. & Repetto, M., 2017. "Economic perspective for PV under new Italian regulatory framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 283-295.
    14. MacDougall, Hillary & Tomosk, Steve & Wright, David, 2018. "Geographic maps of the impact of government incentives on the economic viability of solar power," Renewable Energy, Elsevier, vol. 122(C), pages 497-506.
    15. 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).
    16. García-Álvarez, María Teresa & Cabeza-García, Laura & Soares, Isabel, 2018. "Assessment of energy policies to promote photovoltaic generation in the European Union," Energy, Elsevier, vol. 151(C), pages 864-874.
    17. An, Jongbaek & Hong, Taehoon & Lee, Minhyun, 2022. "Determining the optimal trading price of electricity for energy consumers and prosumers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    18. Zhou, Dequn & Chong, Zhaotian & Wang, Qunwei, 2020. "What is the future policy for photovoltaic power applications in China? Lessons from the past," Resources Policy, Elsevier, vol. 65(C).
    19. Libo Zhang & Qian Du & Dequn Zhou, 2021. "Grid Parity Analysis of China’s Centralized Photovoltaic Generation under Multiple Uncertainties," Energies, MDPI, vol. 14(7), pages 1-19, March.
    20. Dirk Johan van Vuuren & Annlizé L. Marnewick & Jan Harm C. Pretorius, 2021. "A Financial Evaluation of a Multiple Inclination, Rooftop-Mounted, Photovoltaic System Where Structured Tariffs Apply: A Case Study of a South African Shopping Centre," Energies, MDPI, vol. 14(6), pages 1-26, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:58:y:2016:i:c:p:590-607. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.