The effect of renewable energy investments on economic growth: An application for EU countries and Turkey

The increase in population, technological innovations, changes in living standards and the increasing energy need due to these reasons have pushed countries to new searches. The fact that the majority of energy needs are met by fossil fuels has caused countries to face environmental problems and climate crisis. On the other hand, the fact that fossil fuels will be depleted in the future has caused the problem of energy supply security. For these reasons; countries with energy deficit need to determine the potential of domestic and renewable energy resources and highlight green energy-based policies. In the empirical part of the study, panel data analysis was applied to determine the relationship between renewable energy investments and economic growth. Renewable energy investments, economic growth and employment models were created using the annual data of the European Union and Turkey covering the period 2010-2021. In the study, solar energy installed capacity was used as the dependent variable; while growth rate, carbon emission, total labor force, renewable energy production, fixed capital investments and fossil energy production were used as independent variables. According to the results of the empirical analysis; a positive and significant relationship was found between renewable energy investments and economic growth in line with the main objective of the study. As a result, it has been determined that renewable energy investments increase economic growth.