Analyzing solar energy policies using a three-tier model: A case study of photovoltaics adoption in Arizona, United States

Abstract

This study reveals the interrelationships among a variety of policies supporting solar energy adoption in the U.S. and then calculates the amount of financial subsidies required to support mandatory policies such as Renewable Portfolio Standard (RPS). To illuminate interrelationships among these policies, this study proposes three tiers of descriptive model: the top tier includes mandatory policies such as the Renewable Portfolio Standard (RPS); the middle tier is composed of financial support mechanisms, such as tax credit and rebates; and the bottom tier comprises policies that provide funding sources, such as Public Benefit funds. Based on our proposed model, this study further builds a model which calculates the amount of financial subsidies required to support RPS targets of distributed photovoltaics (PV) adoption. The model is applied to the case study of residential PV adoption in the state of Arizona by 2025. The financial requirements are calculated considering of the uncertainty of federal tax credits (extension or termination after 2016) and compared with planned funds that support PV adoption. This study points out that if states would pursue a sustainable PV adoption targets, they should make more efforts on financial support programs.