Renewable Energy Promotion: Usual Claims and Empirical Evidence - Green Energy and Efficiency: An Economic Perspective - page 328

costs minus positive externalities) for RES-E, but market operators (investors,
generators, suppliers and consumers) are guided by the incentives provided by the
market, where decisions are taken on the basis of private and not social costs
(unless, of course, policy measures internalize those externalities). Public support to
renewable energy levels the playing

eld with respect to conventional electricity,
internalizes the positive externalities of renewable energy in the decisions taken by
economic actors and allows renewable energy to penetrate the electricity market [ 2 ].
In those countries with an already large penetration of renewable energy in their
electricity mix, there is substantial concern about the policy costs of RES-E support
and limiting those costs has also become a policy priority both for developed and
developing countries [ 3 ]. Governments all over Europe are concerned about the
increasing expenditure on renewable energy, which is deemed unsustainable in the
short-term [ 4 ]. Therefore, the cost-effectiveness of support for RES-E is a main
criterion to assess the success of policy instruments, together with effectiveness,
which refers to the ability of an instrument to reach a RES-E target.
Academia has tried to respond accordingly, and there is already a voluminous
literature on the analysis of the effectiveness and cost-effectiveness of RES-E
support. This literature has been both theoretical and empirical. The later has been
based on different methodologies, including case studies and model simulations.
However, there are still some general claims which are largely unsupported with
empirical data. Other statements are at least arguable or refutable on theoretical
grounds. Based on a throughout review of the theoretical and empirical literature,
the aim of this chapter is to discuss some usual claims about renewable energy
promotion and to reply to them. The results of the analysis suggest fruitful avenues
for further research on the topic.
Accordingly, the rest of this chapter is structured as follows. The next section
discusses eight usual claims about RES-E promotion and replies to them on either
theoretical or empirical grounds. The chapter closes with some concluding remarks.

2 Usual Claims and Replies

The eight usual claims discussed in this section follow the same structure. For each
of them, we rst discuss their rationale and, then, immediately after, we provide a

critical discussion on them (

“ reply ” ). The following table summarizes the claims

and the replies (Table 1 ).