Differing Effects of Financial Incentives on Residential Solar Panel Installations

Zoe Hobbs and Dr. Erik Johnson, Department of Economics, Carthage College, 2001 Alford Park Dr, Kenosha WI 53140

Carbon emissions are one of the largest pollutants in the world, and much of this comes from using non-renewables like coal to generate electricity. Financial incentives are a common policy tool to try to encourage the adoption of renewable energy such as solar photovoltaics (PV), otherwise known as solar panels, but there are many types of incentives with different payment times and levels of effort. Because some types of incentives may be more attractive to consumers than others, this study aims to determine which type of financial incentive is most efficient at increasing residential solar PV installations. To determine if lower effort, upfront incentives such as direct cash and sales tax incentives are more effective at increasing installations at a lower cost, this study uses a fixed effects regression of incentive and installation data from 13 states. The results show that direct cash incentives as well as tax credits are the only significant incentive types that encourage the adoption of solar PV out of the five types that are assessed in this study. These findings can help inform policymakers of the best policy options to consider in order to encourage the most solar PV adoption at the lowest cost.

Additional Abstract Information

Presenter: Zoe Hobbs

Institution: Carthage College

Type: Poster

Subject: Economics

Status: Approved

Time and Location

Session: Poster 5
Date/Time: Tue 12:30pm-1:30pm
Session Number: 4146