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The impact of the German feed-in tariff scheme on innovation: Evidence based on patent filings in renewable energy technologies

Christoph Böhringer, Alexander Cuntz, Dietmar Harhoff () and Asane-Otoo, Emmanuel

Energy Economics, 2017, vol. 67, issue C, 545-553

Abstract: Over the last two decades, feed-in tariffs have pushed the massive expansion of electricity from renewable energy sources in Germany. Between 1991 and 1999, feed-in tariffs were prescribed through the Electricity Feed-in Law – the so-called Stromeinspeisungsgesetz (SEG) – at relatively moderate rates. From 2000 onwards, the SEG was replaced by the Renewable Energy Sources Act – the so-called Erneuerbare-Energien-Gesetz (EEG) – with much higher subsidy rates. The rise in subsidies to renewable power generation under the EEG came along with a substantial increase in electricity prices provoking an intense public debate on the benefits of renewable energy promotion. In our regression analysis, we assess one popular justification for feed-in tariffs: the demand-side effect of induced innovation. We find that the innovation impact of the German feed-in tariff scheme over the last two decades supports the positive innovation hypothesis. However, the inducement effect of the feed-in tariff scheme under the EEG is not significantly different from that of the SEG. Given the drastic cost of the EEG, we caution against the appraisal of the EEG feed-in tariff scheme solely on the grounds of its impact on technological innovation.

Keywords: Renewable energy promotion; Feed-in tariffs; Innovation (search for similar items in EconPapers)
JEL-codes: C23 H23 O38 (search for similar items in EconPapers)
Date: 2017
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