The effect of incentive policies for renewable energy on electricity production: An applied analysis

The increase in the energy need, resulting from industrialization and rapid urbanization, is primarily met with fossil resources. This increase in the use of fossil resources causes environmental pollution, which has reached serious dimensions today. and therefore, climate change. On the other hand, the probable depletion of fossil resources in the near future threatens energy supply security. Many states have gradually turned to using renewable energy sources both to combat climate change that threatens the future of the planet and to ensure energy supply security. These states implement regulatory and fiscal incentive policies to increase renewable energy production. The aim of this study is to investigate the effect of incentive policies for renewable energy sources on renewable energy. In this study, the implementation process of incentive policies from the past to the present has been analyzed over the countries selected according to the high renewable energy potential and their willingness to implement incentive policies. In the empirical part of the study, the relationship between renewable energy and incentive policies for renewable energy sources was analyzed using panel data. The empirical analysis was conducted by creating a fixed effects model from the annual data of the selected 16 countries for the 1995-2020 period. In the study, electricity produced from renewable energy is used as the dependent variable, while, feed-in tariff, quota obligation, tendering and tax incentives are used as independent variables. According to the empirical analysis, a positive and significant relationship was found between each of the incentive policies listed and renewable energy. In other words, an increase in any of the incentive policies mentioned, will increase renewable energy production.