Directed Technical Change and Renewable Energies:
Policy Incentives to Promote
Solar Innovations

This report addresses the question of what we can learn from public interventions in Europe to promote technical change in renewable energy. What are the experiences of various policy initiatives in recent decades? Are the different mechanisms self- reinforcing or competing? Could there be positive spillover effects from fossil-energy technology to renewable technologies?

The report construct panel data with micro- and macro-observations from the 12 European countries Austria, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, Great Britain over a 26-year period plus a presample period of 10 years, and estimate how energy prices, public direct investments in renewables, feed-in tariffs, R&D subsidies, financial support to consumers, and spillovers from internal knowledge stocks affect patenting in solar photovoltaic energy.

The regression analysis is conducted over the years 1990–2015. In total, we consider about 7,000 patents for 2,100 firms specialising in only solar technology or innovating in two or more energy technologies.