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Market Structure and the Penetration of Alternative Energy Technologies AgEcon
Tsur, Yacov; Zemel, Amos.
Energy market prices ignore external effects, hence miss-allocate energy generation between (polluting) fossil fuels and (clean) solar technologies. Correcting the failure requires understanding the market allocation forces at hand. An important feature of solar energy is that its cost of supply is predominantly due to upfront investments in capital infrastructure (rather than to the actual supply rate) and this feature has far reaching implications for the market allocation outcome. Studying the market allocation process, we specify the conditions under which solar technologies penetrate the energy sector. The framework is then used to analyze policy regulation in the form of taxing fossil energy and subsidizing investments in solar energy. The first...
Tipo: Working or Discussion Paper Palavras-chave: Energy; Solar technologies; Fossil fuels; Price thresholds; Regulation; Environmental damage; Learning by doing; Resource /Energy Economics and Policy; Marketing; C61; Q42; Q58.
Ano: 2009 URL: http://purl.umn.edu/47174
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