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Renewable Energy Support Through Feed-in Tariffs: A Retrospective Stakeholder Analysis

Author

Listed:
  • Majid Hashemi

    (Department of Economics Queen’s University Canada)

  • Glenn P. Jenkins

    (Department of Economics, Queens University, Kingston, Ontario, Canada and Cyprus International University, North Cyprus)

  • Frank Milne

    (Department of Economics, Queens University, Kingston, Ontario, Canada)

Abstract

This study develops a generalized evaluation framework that can be used to quantify the financial, economic, stakeholder, and environmental impacts of renewable energy support programs. The application of this framework is demonstrated by evaluating the Feed-In Tariff (FIT) program for solar distributed energy resources (DER) in Ontario, Canada. Our analysis reveals that although Ontario’s FIT program has successfully promoted the adoption of solar DER across communities, considering all the criteria of cost-benefit analysis, including optimal timing, economic resource efficiency, environmental cost-effectiveness, and distributional impacts, this policy has been a complete failure. The program has led to a significant cross-subsidization from program non-participants to participants and losses to the Canadian economy in return for insignificant environmental benefits. The losses would have been reduced by approximately 50 percent if the program had been delayed and implemented in 2016 instead of 2010. The lessons from this analysis provide insights for designing future policies to reduce greenhouse gas emissions.

Suggested Citation

  • Majid Hashemi & Glenn P. Jenkins & Frank Milne, 2023. "Renewable Energy Support Through Feed-in Tariffs: A Retrospective Stakeholder Analysis," Development Discussion Papers 2023-08, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4607
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    References listed on IDEAS

    as
    1. Bureau, Dominique & Quinet, Alain & Schubert, Katheline, 2021. "Benefit-Cost Analysis for Climate Action," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 12(3), pages 494-517, October.
    2. Chun-Yan Kuo & Glenn Jenkins, 2007. "The Economic Opportunity Cost Of Capital For Canada - An Empirical Update," Working Paper 1133, Economics Department, Queen's University.
    3. Yatchew, Adonis & Baziliauskas, Andy, 2011. "Ontario feed-in-tariff programs," Energy Policy, Elsevier, vol. 39(7), pages 3885-3893, July.
    4. Beck, Marisa & Rivers, Nicholas & Wigle, Randall, 2018. "How do learning externalities influence the evaluation of Ontario's renewables support policies?," Energy Policy, Elsevier, vol. 117(C), pages 86-99.
    5. Crago, Christine L. & Grazier, Emma & Breger, Dwayne, 2023. "Income and racial disparities in financial returns from solar PV deployment," Energy Economics, Elsevier, vol. 117(C).
    6. Benjamin Dachis & Jan Carr, 2011. "Zapped: The High Cost of Ontario's Renewable Electricity Subsidies," e-briefs 117, C.D. Howe Institute.
    7. Kevin Rennert & Frank Errickson & Brian C. Prest & Lisa Rennels & Richard G. Newell & William Pizer & Cora Kingdon & Jordan Wingenroth & Roger Cooke & Bryan Parthum & David Smith & Kevin Cromar & Dela, 2022. "Comprehensive evidence implies a higher social cost of CO2," Nature, Nature, vol. 610(7933), pages 687-692, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    renewable energy subsidy; distributed energy resources; feed-in tariff; stakeholder analysis; benefit-cost analysis; Ontario; Canada.;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • 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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