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Energy transition in Germany and regional spill-overs: The diffusion of renewable energy in firms

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  • Horbach, Jens
  • Rammer, Christian

Abstract

The success of transitioning energy consumption towards renewables highly depends on the willingness and ability of firms to adopt energy technologies that use renewable sources. Existing studies focus on the role of regulation and energy markets to explaining the diffusion of green energy. This paper looks at the specific role of the firms' regional environment in this process. We use a unique database combining the Community Innovation Survey 2014 for Germany and district-level data on renewable energy plants, the attitudes of a region's population towards 'green issues' and other control variables. We find that geographical proximity to electricity production based on renewable energy sources and the orientation of a region towards 'green issues' are both correlated to such innovations. Therefore, not only "hard" regulation measures such as the renewable energy law are relevant for renewable energy innovations. Our results show that subsidies for eco-innovation, high energy costs and regional knowledge spill-overs are linked to a rapid adoption of renewable energy by firms.

Suggested Citation

  • Horbach, Jens & Rammer, Christian, 2018. "Energy transition in Germany and regional spill-overs: The diffusion of renewable energy in firms," Energy Policy, Elsevier, vol. 121(C), pages 404-414.
  • Handle: RePEc:eee:enepol:v:121:y:2018:i:c:p:404-414
    DOI: 10.1016/j.enpol.2018.06.042
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    More about this item

    Keywords

    C25; O31; Q20; R11; Eco-innovation; Community Innovation Survey; Renewable energy; Innovation diffusion; Mixed-effects probit regression;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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