Tax incentive and solar energy adoption

• Grant number: 22/05810-0
• Support Opportunities: Scholarships in Brazil - Doctorate
• Start date: October 01, 2022
• End date: February 29, 2024
• Field of knowledge: Applied Social Sciences - Economics - Agrarian and Natural Resource Economics
• Principal Investigator: Paula Carvalho Pereda
• Grantee: Thiago Antonio Pastorelli Rodrigues
• Host Institution: Faculdade de Economia, Administração, Contabilidade e Atuária (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

In recent years, the idea that renewable energy is relevant for sustainable development has become a global consensus. This research aims to study the impacts of a policy to encourage small-scale solar photovoltaic (PV) systems in Brazil. From 2015 to 2018, state governments began to reduce the ICMS (Imposto Sobre a Circulação de Mercadorias e Seviços) electricity rate on solar PV owners. Thus, we will explore the policy design to identify the causal effects on the number of residential PV system installations. We will combine information from different data sources with a novel administrative data set from the National Electric Energy Agency (ANEEL). Based on the estimated effects, we will investigate the economic and environmental costs and benefits the program conferred. This study will be the first to assess the causal effects between taxes and the adoption of solar photovoltaic systems in Brazil. Understanding this causal relationship can help national and regional governments define strategies to achieve their economic and environmental policy goals.