Influencing Factors Promoting Technological Innovation in Renewable Energy

Abstract

The issue of climate change, oil price fluctuation and the increasing environmental awareness have triggered the importance of effective energy management systems in a bid to reduce greenhouse gases. Renewable energy which is one of the effective method of effectively managing energy system has seen rapid development in recent times. Technological innovation in renewable energy have not been generally successful due to some influencing factors in some countries. This study investigates these factors in order to identify the influencing factors promoting innovation in renewable energy. Using patent application data for 12 OECD countries for the period of 1997 to 2011, we analysis the influence of government R&D, Feed-In-Tariff, electricity from renewables, per capita income, CO2 emission per capita and population on patenting activity in wind and solar energy using a panel data approach. The result showed that electricity from renewables and CO2 emission per capita significantly improves patenting activity. Per capita income showed a positive impact on patenting activity for wind energy but not solar energy. Population size was observed to reduce patent activity, while R&D expenditure and Feed-In-Tariff did not significantly influence patent activity. We therefore recommend that investment into renewables for electricity generation should be encouraged as this will induce innovation in renewable energy technology and reduce CO2 emission.Keywords: Renewable energy patent; Patenting activity; CO2 emission; OECD countries; Feed-In-Tariff; R&D expenditureJEL Classifications: O31; O34; Q4