 When the carrot goes bad: The effect of solar rebate uncertaintyEnergy Economics, 2019, vol. 81, issue C, 886-898 Abstract: Although meant to encourage investment in solar photovoltaic (PV) systems, some incentive policies may themselves become a barrier in instances where policy-related uncertainty is present, as potential solar adopters delay their investment until uncertainty is resolved. This study utilizes a quasi-experimental setting to quantify the effect of solar policy uncertainty. Focusing on the California Solar Initiative's residential rebate program, I exploit the temporary exhaustion of funds within one of the utility territories as an exogenous source of increased uncertainty and estimate that it leads to a 67% drop in rebate applications in an average ZIP code-week. There is considerable heterogeneity in this effect depending on household income and PV system size. Among households that are least likely to invest in PV without a rebate incentive, program participation drops by up to 69%. This suggests potentially significant loss in program effectiveness due to lower PV adoption and underscores the importance of accounting for uncertainty in policy evaluations. Keywords: Energy policy; Uncertainty; Rebates; Renewable energy; Solar photovoltaic systems (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:81:y:2019:i:c:p:886-898 DOI: 10.1016/j.eneco.2019.05.028 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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