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Solar Bait: How U.S. States Attract Solar Investments from Large Corporations

Abstract:
Past solar adoption literature has focused primarily on households without significant attention to the potential of commercial properties as sites for solar generation. We examine firms' decisions to install solar panels on their properties using state and firm level data from the U.S. We are interested in the effects of state level characteristics, including policies and regulations, on firm decisions regarding solar investments. We find that state characteristics that influence the return-on-investment from solar installations, most notably solar intensity, are important for commercial adoption decisions. Further, the results suggest that certain state level policies, including solar carve-outs in renewable portfolio standards, financing programs and tax breaks, can incentivize firms to install solar panels. Across different model specifications, we observe that firm installation decisions are correlated with personal electric vehicle ownership rates. This may indicate a 'green' business marketing strategy, whereby firms install solar to improve their social responsibility image.

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Keywords: Solar adoption; Corporate solar; State solar policies; Renewable portfolio standards; Solar renewable energy credits

DOI: 10.5547/01956574.41.2.jcoh

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Published in Volume 41, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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