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Cost-effectiveness of policies supporting solar panels in Indiana

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  • Sesmero, Juan P.
  • Jung, Jinho
  • Tyner, Wallace E.

Abstract

We adopt a real options approach to quantify transfers to households that are sufficient to induce adoption of solar panels. These transfers are then combined with the panels’ production capacity to obtain a measure of cost-effectiveness of alternative policies that are either in effect, or currently being considered by State governments. Alternative policies are then ranked based on their cost-effectiveness. Generally we find that a combination of net metering and peak-pricing is more cost-effective than the federal tax credit and the solar loan interest tax deduction.

Suggested Citation

  • Sesmero, Juan P. & Jung, Jinho & Tyner, Wallace E., 2015. "Cost-effectiveness of policies supporting solar panels in Indiana," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205792, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea15:205792
    DOI: 10.22004/ag.econ.205792
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    References listed on IDEAS

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    1. 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.
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    Resource /Energy Economics and Policy; Risk and Uncertainty;

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