Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/274533 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
W.E.P. - Würzburg Economic Papers No. 105
Publisher: 
University of Würzburg, Department of Economics, Würzburg
Abstract: 
Government support for green technologies and renewable energy in particular has become an integral cornerstone of economic policy for most industrialized economies. Due to competitive price determination and supposedly higher efficiency, auctions have in recent years widely succeeded feed-in-tariffs as the primary support instrument (del Rio & Linares, 2014; REN21, 2021). However, literature still struggles to produce causal evidence to validate mostly descriptive findings for efficiency gains. Yet, this evidence is needed as a foundation to provide robust recommendations to policy makers (Grashof et al., 2020). By utilizing a difference-in-differences approach, this paper provides such evidence for a German photovoltaic (PV) auctioning program which came into effect in 2015. Results for this natural experiment confirm that cost-effectiveness improved significantly while previous literature shows that capacity expansion remained high. Results additionally show that falling prices for PV panels were the primary driver of cost reductions and wages also exert high influence on support price. Input cost development therefore indeed strongly influences support level which was the aim with introducing competitive auctions. Interest rate development cannot be linked to support level development, most probably due to the low interest environment in considered period.
Subjects: 
auctions
feed-in-tariffs
photovoltaic (PV)
renewable energy policy
policy valuation
difference-in-differences
JEL: 
Q48
Q55
Q58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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