What matters for private investment in renewable energy?

This paper examines the drivers of private investment in renewable energy by source financing for 13 economies over period 2008–2018, with a focus on sub-panel Asian economies. Sources – asset finance, corporate research and development (R&D), public market, venture capital equity vary not only across years sources, but also countries. Using fixed effects panel model, this provides first quantitative estimate effect government policies different sources financing, four main findings. First, while expenditure R&D positively affects from finance R&D, it is most important driver terms magnitude elasticity. Second, feed-in tariffs have particularly strong stimulating financed through markets, findings sub-sample. Third, tax incentives mixed impact financing. Fourth, technology costs prices considerable driving notably more pronounced sub-sample.Key policy insights To maximize should aim to facilitate smoother environment sector areas R&D. could include targeted subsidies relief measures.Enhanced FIT mechanisms be developed, Asia, leverage greater via publicly quoted markets. favourable initial fiscal agreement.Tax used caution. While positive overall, they may negatively affect equity, i.e. that are crucial manufacturing scale-up.Countries lower regulatory quality need offer higher rates effective attracting investment.