The Impact of State Policy on Deployment and Cost of Solar PV: A Sector-Specific Empirical Analysis

37 Pages Posted: 25 Nov 2012

See all articles by Gireesh Shrimali

Gireesh Shrimali

Monterey Institute of International Studies

Steffen Jenner

University of Tuebingen; Harvard University

Date Written: November 25, 2012

Abstract

Using a panel database for 27 programs in 16 U.S. states over 1998-2009, we assess the impact of 12 state-level policies on the cost and deployment of solar photovoltaic (PV) technologies for two sectors defined by system sizes: residential (< 10kW) and commercial (10 − 100kW). We first examine the impact of policies on the deployment of solar PV. We show that cash incentives increase the deployment of commercial systems. We also show that interconnection standards potentially promote the deployment of residential systems, whereas property tax incentives potentially foster the deployment of commercial systems. We next examine the impact of policies on the cost of solar PV, and show that the key policies have different effects on costs. The cost of residential systems declines faster if there are cash or property tax incentives in place, whereas the presence of interconnection standards potentially accelerates the decline in commercial system costs. Further, states with a renewable portfolio standard see residential system costs potentially declining slower than states without such a policy. As solar PV is at the brink of becoming cost competitive, our findings would assist regulators in fine-tuning their set of support tools.

Keywords: solar PV deployment, solar PV cost, state policy impact, econometric analysis

JEL Classification: C23, H23, Q42, Q48

Suggested Citation

Shrimali, Gireesh and Jenner, Steffen, The Impact of State Policy on Deployment and Cost of Solar PV: A Sector-Specific Empirical Analysis (November 25, 2012). USAEE Working Paper No. 12-142, Available at SSRN: https://ssrn.com/abstract=2180498 or http://dx.doi.org/10.2139/ssrn.2180498

Gireesh Shrimali (Contact Author)

Monterey Institute of International Studies ( email )

460 Pierce Street
Monterey, CA 93940
United States

Steffen Jenner

University of Tuebingen ( email )

Wilhelmstr. 19
72074 Tuebingen, Baden Wuerttemberg 72074
Germany

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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