Wind electricity subsidies = windfall gains for land owners? Evidence from a feed-in tariff in Germany

Arbeitspapier

In 2013, around 121 billion US-Dollar were spend worldwide to promote the investment into renewable energy sources. The most prominent support scheme employed is a feed-in tariff, which guarantees a fixed price for electricity produced by renewable energies sources, usually for around 15 years after the installation of the plant. We study the incidence of wind turbine subsidies, due to a feed-in tariff in Germany, into land prices to shed light on who benefits from the subsidies. In order to identify the incidence share we exploit quasi-experimental variation in wind strength across 270 non-urban counties combined with an institutional reform and use an Instrumental Variable estimator based on administrative transactionprices. We find that between 15 and 20% of expected wind turbine profits are capitalized into land prices. Using the estimated incidence share of 15%, we find that wind turbine subsidies account for roughly 4% of overall agricultural income of land owners in 2007.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1568

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Incidence ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Business Taxes and Subsidies including sales and value-added (VAT) ; Renewable Resources and Conservation: Government Policy ; Alternative Energy Sources
• Subject: incidence ; subsidy ; renewable energy ; wind turbines ; land prices

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haan, Peter ; Simmler, Martin
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/130611
• Last update: 10.03.2025, 11:44 AM CET