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Determinants of investments in solar photovoltaic: Do oil prices really matter?

Valérie Mignon (), Margaux Escoffier, Emmanuel Hache () and Anthony Paris

No 2019-28, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper investigates the determinants of solar photovoltaic (PV) deployment in the electricity mix for a panel of OECD and BRICS countries from 1997 to 2016 by paying particular attention to the impact of oil market conditions. Relying on a nonlinear, regime-switching specification, we show that rising oil prices stimulate PV deployment only if their growth rate is important, above 6.7%. Although we find that various other determinants matter—with the influence of some of them depending on the situation on the oil market—public policies play a crucial role. In particular, our findings show that feed-in-tariffs should be encouraged to ensure a continuous fight against climate change, whatever the dynamics followed by oil prices.

Keywords: Solar photovoltaic; Renewables deployment; Oil prices; Panel smooth transition regression (search for similar items in EconPapers)
JEL-codes: C23 C24 Q4 Q42 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-ore and nep-reg
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