On the Effectiveness of Feed-In Tariffs in the Development of Photovoltaic Solar

Tinbergen Institute Discussion Paper 14-156/VI

28 Pages Posted: 22 Dec 2014

See all articles by Elbert Dijkgraaf

Elbert Dijkgraaf

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus University Rotterdam, SEOR-ECRi

Tom van Dorp

Solarplaza International BV

Emiel Maasland

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: December 19, 2014

Abstract

Growing concern for climate change and rising scarcity of fossil fuels prompted governments to stimulate the development of renewables. This paper empirically tests whether feed-in tariff (FIT) policies have been effective in the development of photovoltaic solar (PV), explicitly taking into account structure and consistency of FITs. Panel data estimations are employed for 30 OECD member countries over the period 1990-2011. We find a positive effect of the presence of a FIT and the development of a country’s share of PV in the electricity-mix. This effect increases if policies are consistent. Tariff height is the most important characteristic of a FIT, but other characteristics such as cost level, duration of contract and restrictions on capacity levels can also not be neglected if the goal is to increase effectiveness of FITs.

Keywords: Photovoltaic solar, Feed-in tariffs, Policy-consistency, Design characteristics

JEL Classification: C23, G11, H23, N70, Q42, Q48

Suggested Citation

Dijkgraaf, Elbert and van Dorp, Tom and Maasland, Emiel, On the Effectiveness of Feed-In Tariffs in the Development of Photovoltaic Solar (December 19, 2014). Tinbergen Institute Discussion Paper 14-156/VI, Available at SSRN: https://ssrn.com/abstract=2541588 or http://dx.doi.org/10.2139/ssrn.2541588

Elbert Dijkgraaf (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus University Rotterdam, SEOR-ECRi ( email )

P.O. Box 1738
H 7-34
Rotterdam, 3000 DR
Netherlands
+31 10 4082590 (Phone)
+31 10 4089650 (Fax)

HOME PAGE: http://www.ecri.nl

Tom Van Dorp

Solarplaza International BV ( email )

Emiel Maasland

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 10 408 1513 (Phone)

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