An Economic Analysis of Solar Power Development: Regional Disparities, Market Impacts, and Environmental Policy Stringency

This thesis examines the socioeconomic dynamics and policy implications of solar photovoltaic (PV) development through three empirical essays. The first chapter investigates the evolving relationship between household income and solar PV adoption under the Feed-in Tariff (FIT)scheme from 2010 to 2018 in the UK. While higher-income areas initially led adoption, falling technology costs enabled broader participation, particularly among lower-income regions, over time. The second chapter explores the impact of solar energy on wholesale electricity prices in the UK. By isolating solar generation during daylight hours and analysing its merit order effect, the study finds that solar PV exerts a stronger price-reducing impact than wind, particularly during peak demand periods and energy crises. The third chapter evaluates how environmental policy stringency influences the development of solar capacity across OECD countries. Unlike prior studies that focus on cumulative renewable output, this research highlights the importance of annual added capacity to capture real-time policy impacts. It further distinguishes between direct and indirect policy instruments, revealing that only direct measures, such as taxes and subsidies, consistently drive solar development. Together, the findings of this thesis offer novel insights into the distributional effects of solar policies, the market consequences of renewable integration, and the effectiveness of regulatory instruments. They underscore the importance of reducing upfront investment barriers, designing market-friendly incentives, and strengthening direct environmental measures to support a more equitable and efficient energy transition.