Abstract
Federal and state tax incentives are the principal techniques used to accelerate residential renewable energy use in the U.S. Despite the common assumption that such incentives stimulate consumer demand, no consistent, statistically significant relationships appear to exist between the value of state tax incentives and state solar domestic hot water system adoption rates. The results imply that tax incentives do not influence consumer behavior; however, the adoption process is too complex and incompletely understood to dismiss the incentives. The findings indicate that government and industry should not rely on tax incentives alone in their efforts to accelerate commercialization of renewable energy resources.
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