Heterogeneous Solar Capacity Benefits, Appropriability, and the Costs of Suboptimal Siting

Steven Sexton, Justin Kirkpatrick, Robert Harris and Nicholas Muller

Journal of the Association of Environmental and Resource Economists, 2021, vol. 8, issue 6, 1209 - 1244

Abstract: This paper estimates that pollution damages avoidable by solar capacity vary considerably across zip codes in the United States and that they are uncorrelated with solar subsidy levels in each state. We estimate that $1 billion in avoided pollution damages would be gained annually from optimal siting of installed rooftop solar capacity. States are shown to appropriate a minority of these benefits from their solar investments because of interstate electricity and air pollution flows. This paper further measures the energy value of solar capacity across the United States and finds that rooftop solar does not relieve grid congestion.

Date: 2021
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