Wind energy deployment in the U.S.: An empirical analysis of the role of federal and state policies

Using a 50-state panel dataset covering the years 1990–2011, we empirically examine the effectiveness of national and state-level policies that encourage wind energy deployment in the U.S. This study is the first to use econometric techniques to examine both the impact of the flagship federal policy – the production tax credit – and the influence of the production tax credit on the effectiveness of state-level policies. First, we show that the national production tax credit alone has been effective in promoting wind energy deployment – 1.4GW per year on average – in the U.S. Second, we show that production tax credit influences the effectiveness of state-level policies in promoting wind deployment. For example, in the presence of the production tax credit, mandatory green power option increases wind deployment in a state by 200MW per year on average. Third, we show that the array of renewable energy resources within a given state positively influences the responsiveness to state and national wind policies.