Supporting Solar: The Causal Impact of Subsidies on Domestic Photovoltaic Installations
12:00 - 13:30
Fondazione Eni Enrico Mattei | Palazzo Stelline | Corso Magenta 63 | Milan, Italy
Aurélien Saussay (Assistant Professorial Research Fellow, Grantham Research Institute, London School of Economics and Political Science); Misato Sato (Assistant Professorial Research Fellow, Grantham Research Institute, London School of Economics and Political Science)
Wednesday, 31st May 2023
12:00 – 13:30
Fondazione Eni Enrico Mattei
Corso Magenta 63, Milan
Domestic renewable energy systems have enjoyed considerable government support in Europe and the United States. Yet despite their ubiquity, there is a gap in evaluating their effectiveness. We examine the impact of the 2017 Home Energy Loan & Grant Scheme (HELS) in Scotland using administrative data on the universe of domestic solar photovoltaic installations in the United Kingdom since 2008. Exploiting the devolved nature of renewable energy support policy in the UK, we implement a matching strategy between Scottish and English locales to provide a causal assessment of the scheme’s effectiveness. Our findings are three-fold. First, the HELS increased domestic solar photovoltaic installations. Second, the HELS’ funding ceiling biased installation sizes downward. Third, a complementary distributional analysis reveals that the vast majority of the HELS benefits accrued to the top three deciles by house value.
Aurélien Saussay is Assistant Professorial Research Fellow in the Grantham Research Institute at the London School of Economics. He currently holds a Leverhulme Early Career Fellowship (2022-2025). His research focuses on the interaction between economic inequality and climate change mitigation policies, in order to address the social and political acceptance challenges that hamper the implementation of effective decarbonisation.
Misato Sato is Assistant Professorial Research Fellow at the Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science. She is also Deputy Director of the Centre for Climate Change Economics and Policy, a Co-Editor of the Environmental and Resource Economics journal, and a DIW Fellow. Her research explores the barriers to delivering a rapid low carbon transition, particularly for industrial sectors.