Performance of Renewable Energy Policies - Evidence from Germany's Transition to Auctions

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: W.E.P. - Würzburg Economic Papers ; No. 105

Classification and Topics

• Classification: Wirtschaft ; Energy: Government Policy ; Environmental Economics: Technological Innovation ; Environmental Economics: Government Policy
• Subject: auctions ; feed-in-tariffs ; photovoltaic (PV) ; renewable energy policy ; policy valuation ; difference-in-differences

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Geßner, Daniel
• Event: Veröffentlichung
• (who): University of Würzburg, Department of Economics
• (where): Würzburg
• (when): 2023

Further information

• DOI: doi:10.25972/OPUS-32542
• Handle: http://hdl.handle.net/10419/274533
• URN: urn:nbn:de:bvb:20-opus-325426
• Last update: 10.03.2025, 11:42 AM CET