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Interstate protectionism: the case of solar renewable energy credits

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  • Jed J. Cohen
  • Levan Elbakidze
  • Randall Jackson

Abstract

Solar Renewable Energy Credits (SRECs) are financial instruments created by state policies to offer incentives for generating solar energy. In an effort to support in‐state solar energy sectors and boost local employment opportunities, some states have closed off their SREC markets to out‐of‐state solar facilities. We examine the merits of such protectionist policy from the protectionist state's perspective. We find that SREC market closure leads to higher in‐state SREC prices and greater solar installation, and is associated with lower electricity prices. The study illustrates the economic incentives for protecting in‐state SREC markets from out‐of‐state solar energy producers.

Suggested Citation

  • Jed J. Cohen & Levan Elbakidze & Randall Jackson, 2022. "Interstate protectionism: the case of solar renewable energy credits," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 717-738, March.
    • Handle: RePEc:wly:ajagec:v:104:y:2022:i:2:p:717-738
    DOI: 10.1111/ajae.12248
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    More about this item

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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