Wind power subsidies: Fueling long-term renewable share but slowing short-term progress? An empirical study of OECD countries

This study examines the relationship between feed-in tariffs and the share of renewable energy in the electricity mix of 36 OECD member states, quantifying its strength using a range of panel data estimation techniques. The results reveal a statistically significant positive long-term association between feed-in tariffs for wind energy and the share of renewables in the electricity mix, contrasted by a negative association in the short term. Specifically, a one-cent increase in FiTs is associated with a 0.43–0.79 % rise in the share of renewables in the long term perspective. Additionally, a 1 % increase in per capita income corresponds to a 0.07–0.14 % increase in the share of renewables in the energy mix. However, in the short run, a one-cent increase in feed-in tariffs associates with a 0.23 % decrease in the share of renewables in the energy mix. Insights from seven expert interviews suggest that the counterintuitive short-term association is likely data-driven and may be explained by time lags required renewable electricity output to adjust to higher feed-in tariffs during expansion or boom phases of the business cycle.