Association for Public Policy Analysis & Management

Panel: Policy for Clean Energy Technology Innovation and Diffusion

(Natural Resource, Energy, and Environmental Policy)

The development of clean energy technologies is an essential strategy to address long-term environmental problems such as climate change. Government policies that facilitate the deployment and diffusion of these technologies can not only correct the negative externality of carbon emissions but also promote technological improvement and innovation. Despite the clear economic rationale, developing efficient policy that supports clean energy technologies is always a challenge for policymakers. It requires solid understanding of consumer behaviors, technological progress, market structure and dynamics. The goal of this panel is to inform the design of government policy tools that aim to promote clean energy technology adoption. It is comprised of three papers that examine clean energy technology diffusion from different perspectives.

The first paper focuses on identifying the socially optimal level of government subsidy of residential solar photovoltaics (PV). This research develops an integrated framework that incorporates two streams of benefits from subsidizing consumer use of solar PV: the direct environmental benefits from induced adoption of solar PV, and the indirect benefits that result from induced learning and cost reduction with a follow-on impact on increased adoption (and later carbon emissions). The analysis proposes a dynamic schedule of federal subsidy that declines over time and maximizes the discounted net social benefits. The second paper also focuses on the adoption of solar PV. It presents a predictive model that incorporates economic/cost and informational/social factors to explain solar PV diffusion decision-making. This research also includes an empirical investigation of third-party ownership (TPO), an incentive program that offers zero-down financing for solar PV adoption. The third paper examines consumers’ knowledge and perception about plug-in electric vehicles (PEV) and their effect on the adoption decision. The paper also shows that one’s knowledge about the PEV purchase incentives also influences the intent to adopt the technology. Its finding provides insights into the social obstacles to consumer adoption of PEVs and how policy interventions could be used to correct for misperception of the technology.