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Abstract

State policy incentives for solar power have grown significantly in the past several years. This paper uses county level panel data to investigate whether state policy incentives are effective in increasing residential solar PV capacity. Empirical findings show that tax incentives, rebates, solar-specific mandates, and loan financing programs are important drivers of residential PV adoption. These results suggest that policy incentives play a significant role in encouraging wider use of solar energy. Results also point to a significant positive relationship between hybrid vehicle sales and residential PV adoption, indicating the importance of pro-environmental preference as a predictor of solar PV demand.

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