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Solar bait: How states attract solar investments from large corporations

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  • Cohen, Jed J.
  • Elbakidze, Levan
  • Jackson, Randall

Abstract

Past solar adoption literature has focused primarily on households without significant attention to the potential of commercial properties as sites for solar generation. We examine firms’ decisions to install solar panels on their properties using state and firm level data from the U.S. We are interested in the effects of state level characteristics, including policies and regulations, on firm decisions regarding solar investments. We find that state characteristics that influence the return-on-investment from solar installations, most notably solar intensity, are important for commercial adoption decisions. Further, the results suggest that certain state level policies, including solar carve-outs in renewable portfolio standards, financing programs and tax breaks, can incentivize firms to install solar panels. Across different model specifications, we observe that firm installation decisions are correlated with personal electric vehicle ownership rates. This may indicate a ‘green’ business marketing strategy, whereby firms install solar to improve their social responsibility image.
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Suggested Citation

  • Cohen, Jed J. & Elbakidze, Levan & Jackson, Randall, 2018. "Solar bait: How states attract solar investments from large corporations," 2018 Annual Meeting, August 5-7, Washington, D.C. 274449, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea18:274449
    DOI: 10.22004/ag.econ.274449
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    References listed on IDEAS

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    1. Sylvia Trendafilova & Kathy Babiak & Kathryn Heinze, 2013. "Corporate social responsibility and environmental sustainability: Why professional sport is greening the playing field," Sport Management Review, Taylor & Francis Journals, vol. 16(3), pages 298-313, July.
    2. 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.
    3. Wiser, Ryan & Barbose, Galen & Holt, Edward, 2011. "Supporting solar power in renewables portfolio standards: Experience from the United States," Energy Policy, Elsevier, vol. 39(7), pages 3894-3905, July.
    4. Matisoff, Daniel C. & Johnson, Erik P., 2017. "The comparative effectiveness of residential solar incentives," Energy Policy, Elsevier, vol. 108(C), pages 44-54.
    5. Overholm, Harald, 2015. "Spreading the rooftop revolution: What policies enable solar-as-a-service?," Energy Policy, Elsevier, vol. 84(C), pages 69-79.
    6. Wei, Max & Patadia, Shana & Kammen, Daniel M., 2010. "Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?," Energy Policy, Elsevier, vol. 38(2), pages 919-931, February.
    7. Menz, Fredric C. & Vachon, Stephan, 2006. "The effectiveness of different policy regimes for promoting wind power: Experiences from the states," Energy Policy, Elsevier, vol. 34(14), pages 1786-1796, September.
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    Cited by:

    1. 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).
    2. Yunguo Lu & Lin Zhang, 2023. "Environmental information disclosure and firm production: evidence from the estimated efficiency of publicly listed firms in China," Journal of Productivity Analysis, Springer, vol. 59(1), pages 99-119, February.
    3. Wilson, Christian & Caldecott, Ben, 2023. "Investigating the role of passive funds in carbon-intensive capital markets: Evidence from U.S. bonds," Ecological Economics, Elsevier, vol. 209(C).
    4. Jed J. Cohen & Levan Elbakidze & Randall Jackson, 2022. "Interstate protectionism: the case of solar renewable energy credits," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 717-738, March.
    5. Cohen, Jed J. & Azarova, Valeriya & Kollmann, Andrea & Reichl, Johannes, 2021. "Preferences for community renewable energy investments in Europe," Energy Economics, Elsevier, vol. 100(C).
    6. Hirsh Bar Gai, Dor & Shittu, Ekundayo & Attanasio, Donna & Weigelt, Carmen & LeBlanc, Saniya & Dehghanian, Payman & Sklar, Scott, 2021. "Examining community solar programs to understand accessibility and investment: Evidence from the U.S," Energy Policy, Elsevier, vol. 159(C).

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    More about this item

    Keywords

    Resource and Environmental Policy Analysis; Natural Resource Economics; Productivity Analysis and Emerging Technologies;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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