Considering the Welfare Implications of Residential Solar PV Subsidies in the State of Connecticut

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Ken Gillingham
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As residential solar PV installations become more affordable and more integrated into individual states’ renewable portfolio standards, subsidies have become the primary tool used to foster accelerated adoption of the technology. In the state of Connecticut, the renewable energy funding agency known as the Green Bank has developed successful loan and lease programs that have done exactly that. However, the current policies do nothing to address lower income residents in the state. In addition, current papers do nothing to investigate the real impact of such exclusive policy and quantify the extent to which certain subpopulations in Connecticut have been marginalized. Using installation and subsidy data from the Green Bank, this paper will address the distributional consequences of solar PV generation in the state of Connecticut. This will be achieved by analyzing the socioeconomic makeup of families among solar adopters and how their projects are being financed. The financial inputs of state’s clean energy fund will be discussed, along with the potential reclassification of electricity as a public good because of distributed solar. The paper will find that there is strong evidence of marginalization across socioeconomic and geographic boundaries. However, there is hope to adopt to the changing nature of the US electric industry by looking to pockets of success in the state of Connecticut.