De Groote, Olivier and Verboven, Frank (2018) Subsidies and time discounting in new technology adoption: Evidence from Solar Photovoltaic Systems. TSE Working Paper, n. 18-957, Toulouse

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Abstract

We study a generous program to promote the adoption of solar photovoltaic (PV) systems through subsidies on future electricity production, rather than through upfront investment subsidies. We develop a tractable dynamic model of new technology adoption, also accounting for local market heterogeneity. We identify the discount factor from demand responses to variation that shifts expected future but not current utilities. Despite the massive adoption, we find that households significantly discounted the future benefits from the new technology. This implies that an upfront investment subsidy program would have promoted the technology at a much lower budgetary cost.

Item Type: Monograph (Working Paper)
Sub-title: Evidence from Solar Photovoltaic Systems
Language: English
Date: September 2018
Place of Publication: Toulouse
JEL Classification: C51 - Model Construction and Estimation
Q48 - Government Policy
Q58 - Government Policy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 12 Jun 2019 08:11
Last Modified: 07 Oct 2021 12:41
OAI Identifier: oai:tse-fr.eu:32966
URI: https://publications.ut-capitole.fr/id/eprint/32545

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