European Union member states have ambitions to encourage renewable energy plants, such as those based on solar photovoltaics (PV). However, legal uncertainty and the direct and indirect costs associated with investment are often barriers to installation, particularly for small and medium-sized installations. Financial incentivization has been a popular policy choice to stimulate investment to date. However, reducing cost-related uncertainty in the plant authorization procedure may also encourage uptake. Now, Federica Daniele, Stefano Clò and colleagues from the Bank of Italy and University of Florence present insights on the impact of authorization simplification reforms that took place in Italy during the 2009–2013 period.
Daniele, Clò and colleagues consider the impact of introducing authorization exceptions for the construction of medium-sized PV plants in 2008. They use a stacked differences-in-differences approach and consider administrative microdata on all known mid-sized renewable energy plants built in Italy, responsible for over 90% of cumulative capacity installed between 2009 and 2013. The team record an associated increase in installed PV capacity by almost 29% at the municipal level in the first nine months following the reforms, and — importantly — that this association is not due to shifts in investment from small to medium-sized plants. The findings shed light on the impact that regulatory simplification may have as a policy tool for PV expansion, while raising questions for further research on the associated social welfare implications of such amendments.
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