Innovation Effects of Support Schemes for Renewable Electricity

Abstract

The aim of the current research is twofold: 1) to provide a conceptual framework to analyze and classify the innovation effects of instruments to support electricity from renewable energy sources (RES-E) by considering different analytical perspectives and, 2) based on a thorough review of the empirical literature, to compare the innovation effects of different RES-E support instruments, with respect to the different innovation dimensions resulting from those perspectives (technological diversity; research, development and demonstration (RD&D) investments; learning effects and technological competition). No instrument scores well in all innovation dimensions, although feedin tariffs (FITs) score highly in a majority of them. In particular, FITs are more likely to feed back into previous stages of the innovation process than other deployment support schemes, mostly due to their proven capacity to create markets for renewable energy technologies, which activates all the innovation dimensions. Our results do not support the usual claim of a combination of deployment instruments for technologies with different maturity levels. Indeed, the evidence suggests that we should use FITs for technologies with different maturity levels, combined with public RD&D support for the least mature. The impact of deployment instruments on private RD&D investments calls for a better coordination and integration between public RD&D and deployment support. However, the evidence of the impact of support schemes on some of those dimensions is scarce and, thus, more research is required.