What Determines the Adoption of Technologies for Renewable Energy Generation Across Countries?

I provide evidence about the effects of induced biased technical change as a main determinant of solar and wind energies adoption. This study presents an empirical framework based on an input demand function for electricity production. Implementing this model helps us to understand what is driving the decision of electricity generators to adopt solar and wind energies. The data used for this study was a cross country panel dataset on 29 OECD countries between 1990 and 2015. I test three mechanisms that may be driving the adoption of these technologies: 1) a pure substitution effect between renewable energies and fuel; 2) induced technological change and innovation; 3) fuel taxes. The results show that induced technical change is the main driver to increase the rate of adoption of solar and wind energies