Mitigating poverty through solar panels adoption in developing economies

Abstract

Motivated by a widely practiced strategy to combine the growth of the solar energy sector with poverty mitigation, we propose stylized models of households selling extra solar energy back to the grid, which generates a steady stream of income to overcome adoption barriers for solar panels, that is, high adoption cost and generation variability. By considering households' strategic consumption shifting behavior in response to varying intertemporal market electricity prices, we have presented the equilibrium adoption number and households' equilibrium profit. We have also demonstrated the government's optimal subsidy to reach a socially optimal adoption level. Furthermore, we investigate the popular Public Private Partnership (PPP) model in developing countries to promote the investment of solar panels. Under the PPP program, the private firms share both upfront cost and electricity revenue with households, while the government may provide subsidy to further encourage adoption. Despite the popularity of the PPP scheme, our model documents an unexpected negative implication by inducing a lower overall adoption level than the traditional scheme: As the PPP scheme relieves budgetary burden of households in adopting solar panels (infrastructure cost), anticipating the long-term revenue loss, they are less likely to participate in the first place. However, combined with the government intervention via adoption subsidy, the PPP scheme can lead to a win-win solution for all.

Unveiling the shades of partnerships for the energy transition and sustainable development: Connecting public–private partnerships and emerging hybrid schemes

“…From 2015 onward, the volume of scientific production in PPPs in energy has intensified in energy efficiency and agro‐energy applications in Europe and waste‐to‐energy and electric vehicle charging infrastructure in China (Manos et al, 2014; Xu et al, 2015; Yang et al, 2016). A key aspect in the literature is the persistence of sustainability (Arbulú et al, 2017; Bougrain, 2012; Sheng et al, 2020), clean energy (Atmo & Duffield, 2014; Feng et al, 2021; Raza et al, 2021), and the energy transition (De Carvalho, 2018; Koengkan, 2020) as the motivation for research.…”

Converting a drug from off‐label to on‐label use: Government subsidies and patient welfare

“…(2016) and Feng et al. (2021) in renewable energies, and Cohen et al. (2016) in green technology adoption.…”

“…Government support mechanisms are studied in several other contexts. For example, Alizamir et al ( 2019) and Akkaya et al (2021) study subsidies in the agricultural industry, Alizamir et al (2016) and Feng et al (2021) in renewable energies, and Cohen et al (2016) in green technology adoption.…”

Converting a Drug From Off-Label to On-Label Use: Government Subsidies and Patient Welfare

“…Government support mechanisms are studied in several other contexts. For example, Alizamir et al ( 2019) and Akkaya et al (2021) study subsidies in the agricultural industry, Alizamir et al (2016) and Feng et al (2021) in renewable energies, and Cohen et al (2016) in green technology adoption.…”