The comparative effectiveness of residential solar incentives

Daniel C. Matisoff and Erik P. Johnson

Energy Policy, 2017, vol. 108, issue C, 44-54

Abstract: We use temporal and spatial variation to evaluate the effectiveness of nearly all (over 400) state and utility incentives that promote the installation of residential solar photovoltaic (PV) panels. Using a unique data set that values a wide array of solar incentives including cash incentives, tax credits, and solar renewable energy credits, we evaluate and compare the impact of incentives using a standardized net present value of each incentive. We pair these data the amount of new residential solar installations within each state and year to examine the relationship between incentive type and new residential PV installations. We find that each additional dollar of incentives has led to on average, an additional 500 W of additional installed capacity per thousand residential electric customers. This effect is enabled by the presence of net metering and financing availability. Direct cash incentives, when coupled with financing initiatives and net metering, drive much of the impact on installations. Results are consistent with research that shows that incentive salience may drive variation in effectiveness. Results suggest that approximately 67% of state and utility incentives, up to $1.9 billion over 11 years, were likely spent on incentives that did not increase residential solar PV installations.

Keywords: Financial incentives; Solar technology; Solar incentives; Subsidies; Tax salience; Incentive salience; Solar financing; Renewable Energy policy (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421517303166
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:108:y:2017:i:c:p:44-54

DOI: 10.1016/j.enpol.2017.05.032

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().