Association for Public Policy Analysis & Management

Both in the U.S. and around the globe, utilization of renewable energy (RE) has been an indispensable part of the overall solution to humans’ ever increasing energy need and global climate change. Given the recent setback in Obama’s Clean Power Plan and the uncertainties brought about by the Trump administration, prospect for strong RE policies at the federal level has been grim. During the past two decades, however, states have taken the initiative in experimenting with RE policies. Some lead the nation in integrating RE sources into their existing energy infrastructure. Others are more content with conventional ways of energy production. Overall, in the study of RE policies, now is the opportune time to focus on the states, learn from state-level experiments, and find out what policies have been effective.

Motivated by the above policy imperative, this paper looks into existing empirical literature [1] and finds largely mixed conclusions on the effectiveness of different state-level RE policies [2]. Instead of adding to one side of the debate, this paper digs into the conceptual and methodological setup of previous studies and investigates the factors that may have contributed to the mixed conclusions. By applying alternative identification strategies and model specifications to panel data on state renewable energy and policies from 1990 to 2015, this paper is able to produce and compare across parallel analytical results. It finds that conclusions on policy effectiveness are highly sensitive to certain aspects of the research design, such as identification of the casual relation and measures for policy outcomes and key explanatory variables. These, in turn, reflect researchers’ different understanding of the policy context.

To further address this inconsistency, this paper resorts to the broader qualitative and quantitative literature [3] that review state RE policies more comprehensively with regard to policy design, implementation and enforcement, and to the techno-economic characteristics of renewable electricity. Combining empirical findings with conceptual development, this paper concludes that reliability of empirical results can be improved by more accurately reflecting contextual information in structured statistical analyses. Towards this end, this paper proposes a generic analytical framework that can serve as a common basis for future studies on state RE policies.