Policy subsidies drive solar innovation far more than market forces alone
A study of European patent filings reveals that government incentives—feed-in tariffs, R&D grants, and consumer subsidies—are far more effective at spurring solar technology breakthroughs than price signals alone. The finding suggests policymakers have a proven tool to accelerate the clean energy transition, though it comes at public cost.
Originaltitel: Directed technical change and renewable energies: policy incentives to promote solar innovations
<p>This paper examines how policy incentives and relative price signals are associated with firm-level solar photovoltaic (PV) innovation. Building on the induced innovation and directed technical change traditions, we analyze biadic patent applications-defined as inventions protected both in Europe and in at least one major non-European jurisdiction for 12 European countries over 1980-2015. We estimate Poisson models to assess how electricity prices, R&D support, public direct investments, feed-in tariffs and financial support to consumers affect patent application in solar PV technology. Considering both intensive and extensive margin, our empirical results provide strong support for induced innovation and directed technical change mechanisms at the firm level.</p>