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What Drives States to Support Renewable Energy?

Why do states support electricity generation from renewable energy sources? Lyon/ Yin (2010), Chandler (2009), and Huang et al. (2007) have answered this question for the adoption of renewable portfolio standards (RPS) at the U.S. state level. This article supplements their work by testing the core hypotheses on the EU27 sample between 1990 and 2010. Furthermore, the article asks why the majority of EU states relies on feed-in-tariffs (FIT). The study conducts logistic time series cross-section regression analyses that run on a hazard model. Evidence in support of private interest theory and public interest theory is provided. (a) The existence of a solar energy association increases the probability of a state to adopt regulation. (b) Solar radiation, and (c) the unemployment rate also increase the odds. (d) Electricity market concentration decreases the probability of transition. Keywords: Energy policy, Renewable energy, Electricity, Feed-in-tariff, Hazard model, Public Choice

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Energy Specializations: Energy Access – Sustainable Development and Distributed Energy; Renewables – Policy and Regulation; Energy and the Environment – Other

JEL Codes:
Q01 - Sustainable Development
Q52 - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
Q59 - Environmental Economics: Other

Keywords: Energy policy, renewable energy, electricity, feed-in-tariff, hazard model, Public Choice

DOI: 10.5547/01956574.33.2.1

References: View References

Published in Volume 33, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.