The Influence of State-Level Renewable Energy Policy Instruments on Electricity Generation in the United States :;a Cross-Sectional Time Series Analysis

Since the late 1990s, state governments in the U.S. have diversified policy instruments for encouraging the electric power industry to deploy renewable sources for electricity generation. While observing the increasing number of new renewable energy policies at the state level governments, this study raised two research questions: (1) how do state governments intervene in the renewable energy market? and (2) how do various policy approaches taken by state governments affect renewable energy development? To answer for these questions, this study attempts to identify the trends and variations in renewable energy policy designs among states in terms of the combination of aggregate level policy instruments used by state authorities. Additionally, this study aims to examine and compare the effectiveness of policy instruments in the deployment of renewable energy sources for electricity production. This study examined 18 state legislative, renewable energy related regulations, programs, or financial incentives existing between 2001 and 2010 in 48 states. Those 18 individual renewable energy policies were classified into three types of policy instruments: command-and-control, market-based, and information instruments. For the analysis, this study measured the amount and share of the electricity generation from nonhydro renewable sources as renewable energy policy effects. In order to isolate policy effects, this study also considered state specific characteristics such as natural endowment, economic and political environments, and the market conditions of electric power industries in different states. This study employed fixed-effects models to analyze cross-sectional time series data. The results showed that states\u27 adoption of diverse command-and-control types of policy instruments have significantly influenced the increase of both the amount and share of renewable electricity, while informative policy tools helped increase the share of renewable sources used by electric power producers. However, diversif